Lapid, Livni Propose Rent Control Law

Raz Smolsky
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Livni and Lapid during a press conference, November 21, 2014.Credit: Ofer Vaknin
Raz Smolsky

Landlords will be limited to raising rents by no more than 2% annually over the next three years, even if an apartment changes tenants, under a proposed law to ensure fair rents.

The rent ceiling is a temporary order in force until 2020 according to a draft legislation unveiled on Thursday at a press conference by Finance Minister Yair Lapid and Justice Minister Tzipi Livni. Emphasizing that the law would benefit students and the young, the event was held at the Tel Aviv-Jaffa Youth House with Gilad Arditi, chairman of the National Students Union.

“The draft law will create stability and logic to the rental market,” Lapid said. “With the law, we will be able to give tenants assurance about how much rent they will be paying for periods longer than one year, ensuring that apartments are appropriate for habitation.”

The planned law is the latest effort by Lapid to contain the rising cost of housing. While rising home prices have attracted the most attention, the Central Bureau of Statistics says rents rose 6.6% in the second quarter from a year earlier. Since 2007, rents have risen by 64.2% nationwide, while in Tel Aviv they have jumped 85%.

His bill to exempt many buyers from the 18% value-added tax when they buy their first home is stuck in the Knesset but another undertaking, to sell builders land at a discount so long as they pass the savings on to home buyers, is moving forward and the first tenders could occur as early as next month.

Under the proposed rent-control legislation, landlords will be required to show tenants the contract they signed with previous tenants to ensure they are keeping to the 2% ceiling and append to the new contract. Landlords who violate the rule will be subject to a 2,000-shekel ($521) fine.

As Lapid indicated, the legislation would also define what constitutes a habitable apartment: It must have at least 26 square meters of living space, including a kitchen, a laundry/service area with running water and ventilation.

The law will also set the maximum security deposit a landlord can require at no more than six months of rent or a third the total rent for the year. It also places limits on charges a landlord can require beyond the rent itself, including taxes, utilities and house committee charges. The landlord will be barred from charging for any improvements to the property.

The terms of the law had their genesis in a Facebook group called the Apartment Renters Committee formed by Lilach Rubin, a Tel Aviv tenant, which amassed 13,000 members. On Thursday she lauded the proposed law but said it didn’t go far enough.

Rubin said the law should include a price list for rents. “Supervision shouldn’t be just on increases but should act as a brake on rents,” she said.