Shas Coalition Pact Gives ultra-Orthodox Priority for Cheaper Homes

Netanyahu’s agreement with Shas restores old criterion that favors Haredim over others.

Pogrow lives in Beit Shemesh, near Jerusalem. Below, three ultra-orthodox men walk in Ramat Beit Shemesh.
Olivier Fitoussi

Finance Minister-designate Moshe Kahlon is promising to lower housing prices by selling state-owned land at discounted rates. But will rights to the lower-cost housing end up being reserved for ultra-Orthodox and religious Jews?

Kahlon’s office refused to issue an official statement on the matter, but sources close to him insisted yesterday that such a thing won’t happen. Yet the coalition agreement Prime Minister Benjamin Netanyahu’s Likud signed with the ultra-Orthodox Shas faction says otherwise.

A clause in the two parties’ agreement concerning affordable housing states that “the criteria that were in place in 2012 will be restored.” That refers to the policy of Ariel Atias, the Shas housing and construction minister at the time, to award points entitling Israelis to affordable housing based on “number of years of marriage,” while rescinding the category “fulfilled earning capacity” (i.e., holds a job).

The latter criterion, which was recommended by the Trajtenberg committee – the government panel formed in the wake of the 2011 social-justice protests to recommend ways of reducing the cost of living and improve government services – was adopted by Yair Lapid when he was finance minister in the previous government in 2013-14.

The aim was to encourage people, particularly the ultra-Orthodox, to join the labor force. However, the change signaled in the Shas coalition agreement would give a points advantage to Haredim and religious Jews – two groups that tend, on average, to marry earlier in life than the secular public. The labor force participation rate among Haredim, meanwhile, is very low, since men are encouraged to shun work in favor of religious study.

The agreement with Shas puts Kahlon in a bind, because his Kulanu party’s coalition agreement with Likud calls for all land sold under the government’s Mechir L’Mishtaken (The occupants’ price) program – about 80% of the total – will be marketed to contractors to build housing for first-time home buyers, according to the criteria set by the Housing and Construction Ministry.

If so, it means that Haredim and the religious will get higher priority for rights to buy the affordable housing built on land sold through the program.

Kahlon will have some power to resist Haredi moves, because the coalition agreement transfers control of the Israel Land Authority – the agency that manages government-owned land and conducts tenders. Nevertheless, with Netanyahu presiding over a razor-thin Knesset majority of 61 seats, Kahlon will have to ensure that he has the strong and steady support of the ultra-Orthodox parties for other elements of his ambitious reform agenda.

Itzik Shmuli (Zionist Union), who serves as chairman of the Knesset’s affordable housing caucus, voted to line up coalition and opposition lawmakers to advance legislation ensuring that the job-holding criterion will remain in place for at least some low-cost housing. He also plans to ask Knesset legal adviser Eyal Yinon about the legality of changing the criteria, as the Shas agreement calls for.

“We’ll lead an all-out war against any attempt to change the criteria for housing and discriminate against young working couples,” he said.

Lapid’s Yesh Atid party, which led the fight against the marriage criterion, also promised to fight to keep the job requirement intact.

“One of the first decisions we made when we took over the treasury was to reduce significantly the weighting of that scandalous criterion of years of marriage, and to add in its place army service of the couple and work capacity,” said Mickey Levy, a former deputy treasury minister and Yesh Atid MK.

Another clause in the Shas-Likud coalition pact, however, has won praise from social activists. That calls for increasing the stock of public housing by 700 units annually. Funding for the new homes will come from the budget or, alternatively, by requiring builders to allocate 5% of all new homes for public housing.

“The agreement to allocate 5% of new housing stock for public housing is important and raises the hope, if the law is approved, that a lot more than 700 apartments will be built every year,” said the Public Housing Forum yesterday.