In Turnaround, Jewish National Fund Agrees to Transfer Funds to the State

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A JNF tree planting center.Credit: Eliyahu Hershkovitz

The Jewish National Fund has agreed to the government's demand to transfer large sums to the state from the sale of JNF land.

The organization had previously resisted government efforts to pass legislation requiring the transfer of the funds, but on Wednesday its director general, Meir Spiegler, said the JNF would invest 1 billion shekels ($254 million) to fund projects to encourage housing construction.

Housing prices have been rising steadily amid public protests that peaked in 2011. “We want to be an integral part of the system working to solve the housing crisis,” Spiegler said.

The JNF, he said, would fully cooperate with the Israel Land Authority's program in which the ownership of residential land would be transferred to the leaseholders.

Last year, the JNF agreed to provide 2.5 billion shekels for projects via the Housing and Construction Ministry, but the treasury objected to an arrangement it felt unfairly benefited the ministry. In any case, after the new government took office after the March 17 election, the JNF softened its position on transferring funds.

The JNF, also known by its Hebrew name Keren Kayemeth LeIsrael, was founded in 1901 to purchase, afforest and develop land on behalf of the Jewish people in prestate Israel.

In 1961, its agreed that the Israel Land Authority would manage large tracts of its land. In return, the ILA transferred proceeds back to the JNF from the sale of JNF land, recently running at about 1 billion shekels a year.

At one time the government threatened to have the proceeds forcibly paid to the state by legislation, but negotiations between the JNF and the government have led to the agreement that will see the JNF fund projects selected by a panel with officials from both sides.

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