Finance Minister Kahlon Wins Backing for Israeli Housing Reform, Despite Protests

Moshe Kahlon comes under fire for accumulating too much planning power in his hands.

Send in e-mailSend in e-mail
Send in e-mailSend in e-mail
Demonstrators protest against the finance minister's proposed reforms, June 8, 2015. The main banner reads, "No to Kahlon's planning monopoly!"
Demonstrators protest against the finance minister's proposed reforms, June 8, 2015. The main banner reads, "No to Kahlon's planning monopoly!" Credit: Dov Greenblatt

Finance Minister Moshe Kahlon won the backing of the housing cabinet on Monday for the first two components of his plan to increase housing stock and reduce prices, but only after being subjected to fierce criticism by ministers and protesters outside.

Moshe Kahlon at Tel Aviv University, September 18, 2014.Credit: Ofer Vaknin

Ministers approved Kahlon’s proposal to move the Interior Ministry’s Planning Administration into the Finance Ministry, as well as approval to designate nine areas for fast-track building of thousands of new housing units.

But amid a storm of criticism from fellow minsters, Kahlon agreed to some concessions to his plan, which consolidates power for residential construction in the hands of the treasury. Interior Minister Silvan Shalom won the right for his ministry to retain representation in planning institutions and to name the representatives from local authorities that sit on planning committees.

Kahlon wants to streamline the planning process, which he has identified as a major obstacle to accelerating the number of housing starts and increasing the supply of homes. But Shalom said Kahlon was overreaching.

“These proposals are insolent, foolishness and folly,” he warned. “If an appliance doesn’t work, you don’t move it from one room to another – you fix it.” Shalom was backed by Arye Dery (Shas), who had aspired to run the interior ministry before eventually taking the economy portfolio.

Kahlon denied accusations that he was consolidating too much power in his own hands. “We didn’t take anything we didn’t feel we needed. We want to succeed, and if you think there’s anything that’s not right, we can sit and talk about it,” he told the ministers.

Another concession was forced on the finance minister Sunday night, when legal advisers at the Justice Ministry said Kahlon could not require planners from regional planning committees to report to the Planning Administration, but only to the committee chairmen themselves.

The legal advisers insisted on the measure to preserve some independence for regional committees. But since Kahlon will be naming the chairmen, sources said the finance minister would still retain considerable control.

The nine areas designated as accelerated building sites also encountered resistance, this time from Culture and Sports Minster Miri Regev. She said the proposal violated the law stipulating that 30% of new housing in the area must be allocated to long-term rentals. Ultimately, the ministers agreed to allocate 20% for rentals to the Be’er Sheva site and 10% for Nahariya.

“It can’t be possible that in towns in the periphery like Nahariya and more central cities like Haifa and Be’er Sheva ... which take in thousands of students every year, the country can’t allocate long-term rental apartments and at controlled prices,” Regev said.

The plans call for ramped-up construction of 4,600 units in Be’er Sheva, 400 in northeast Sharon and 1,000 each in Nahariya and Haifa, among other places.

Outside, meanwhile, demonstrators representing environmental organizations protested plans to develop some 1,400 homes in the Mitzpeh Niftoah area outside Jerusalem, as well as the focus of the fast-track building program being on open land rather than inside cities.

“It’s a case of chronic planning negligence to be building suburban neighborhoods that require private cars, kill city centers and cause economic, social and environmental damage over the long-term,” said Dror Gershon, who heads Merhav, a nonprofit dedicated to promoting urban development.