Government to Invite Up to Six Foreign Builders to Operate in Israel

Plans aims to speed construction and help ease a housing shortage and soaring prices.

A construction site in Tel Aviv.
Nir Keidar

The cabinet housing committee is due to approve a plan Monday allowing up to six foreign construction companies to operate in Israel over the next five years, as the government seeks to increase housing construction and ease pressure on prices.

Each of the six companies will be allowed to bring in up to 1,000 construction workers, though only to do heavy work in residential building projects. They will be allowed to work jointly with Israeli builders.

Finance Minister Moshe Kahlon, who has been promoting the initiative as part of his broad plan to contain skyrocketing home prices, is expected to publish a notice inviting foreign companies as early as Thursday via the news media and Israeli embassies.

The plan comes as efforts to bring in more foreign building workers by contracting them through manpower firms has failed. Although there is a quota for up to 20,000 foreign construction workers, only about 7,000 are actually working in Israel today.

Another goal of luring foreign builders is the upgrade of the Israeli industry’s low level of productivity and technology. Officials hope more advanced building techniques will help reduce Israel’s notoriously long construction periods, which average two years from the time construction begins to when people can move into their new homes.

The plan represents a partial retreat from a more ambitious idea of the finance and housing ministries that had called for inviting 10 foreign construction companies to operate in Israel. That idea was strongly opposed by Israeli builders, but even the more modest version hasn’t won their backing.

“My guess is that if it happens, many small Israeli contractors and local [building product] manufacturers will go bankrupt and many of the more than 100,000 Israelis working in the construction sector and the industry that supports it” will lose their livelihoods, said Israel Builders Association president Roni Brik.

“Letting foreign construction companies build homes instead of leaving the responsibility in Israeli hands is like an autoimmune disease – a disease in which the body attacks itself,” he said, asserting that the government could be doing more to let Israeli companies import guest workers.

Under the proposal going to the housing cabinet, the six foreign companies will be evaluated based on their financial strength and experience in industrialized residential building. The model is the Turkish building company Ylmazlar Holdings, which employs 1,200 Turkish workers in Israel.