Millions Budgeted for Public Housing Spent Elsewhere

In 1999,the cabinet decided that net revenues received from selling public housing would be used to help people who are eligible for housing assistance.

Hundreds of millions of shekels budgeted for public housing never met their goal, and thousands of public housing apartments that were earmarked to be sold to eligible citizens were instead sold on the free market to the highest bidder, the Knesset Research and Information Center found.

The report was prepared by researcher Etti Fidelman at the request of MK Orly Levi-Abekasis (Yisrael Beiteinu ).

MK Orly Levi-Abekasis - Tomer Appelbaum - 30102011
Tomer Appelbaum

Levi-Abekasis had complained that 1999 government decisions related to housing were not being implemented. That year, the cabinet decided that net revenues received from selling public housing would be used to help people who are eligible for housing assistance.

According to Housing Ministry data, between 1999 and 2010 revenues from public housing sales totaled NIS 2.75 billion. Of this, NIS 1.54 billion was transferred to the Housing and Construction Ministry and NIS 1.08 billion was given to the Jewish Agency, in keeping with an agreement the latter struck with the Finance Ministry.

But only NIS 680 million of all those revenues were budgeted for housing projects, including NIS 205 million used for purchasing apartments - 7.5% of the total revenue from public housing sales. NIS 187 million was transferred to two government housing companies, Halamish and Prazot. NIS 438 million was passed on to the Finance Ministry. The remaining NIS 237 million entered the Housing Ministry's kitty.

Furthermore, part of the budget for housing solutions was used to pave a road to Ma'aleh Adumim and to help build public buildings.

The report also found that the country lacks more than 2,000 apartments for public housing. As of July, 2,340 households were on the public housing waiting list, while only 313 apartments were unoccupied.

The Housing Ministry has no data on the average time eligible citizens wait until they receive public housing.

There were discrepancies between the Housing Ministry's data on home sales and that of the government housing operators. According to ministry data, between 1999 and August 2011, 37,500 public housing residences were sold. Of them, 33,400 were sold to people eligible for public housing. The remaining 4,100 were not, and of them, 2,160 were sold on the free market to the highest bidder.

However, based on the data from five government housing operators, 34,610 homes were sold between 1999 and 2011, including 32,228 to people eligible for public housing and 2,382 to the highest bidder.

While the second figure does not include all of 2011 and it also does not include all the public housing companies, this is unlikely to explain the 3,000-home discrepancy.

"This is a social crime, and I demand we set up a parliamentary committee to investigate the failures and find out who is responsible," said Levi-Abekasis. "We're in the middle of a catastrophe that is only gaining strength. The state has stopped building, and it also isn't seeing through its decisions and using the money intended for public housing.

"It's untenable that the Finance Ministry would ignore government decisions and act like an independent body," she continued, "and make other uses of money intended for public housing, who knows how. All of this is at the expense of the country's weakest population groups. How could money intended for public housing just disappear?"