Netanyahu Announces Housing Initiative, Protest Leaders in Central Camps Reject Plan

Proposal to provide 'affordable housing for young couples, university students, newly discharged soldiers and people without housing'; initiative a response to housing protests spreading across Israel.

Prime Minister Benjamin Netanyahu, Housing Minister Ariel Atias and Finance Minister Yuval Steinitz presented yesterday, at a much heralded press conference in Jerusalem, their plan to provide "affordable housing for young couples, university students, newly discharged soldiers and people without housing."

The government's proposal was a response to the public protest that began nearly two weeks ago with a handful of young people camping out in tents in the center of Tel Aviv's Rothschild Boulevard. The protest has spread to towns and cities around the country. A rally in Tel Aviv Saturday night drew tens of thousands of Israelis to denounced the high cost of housing.

Israel housing protest - Tali Mayer - July 26 2011.
Tali Mayer

Netanyahu was sufficiently worried by the new movement, and his plunging popularity ratings, to postpone a scheduled trip to Poland this week.

The head of the umbrella organization for Israeli trade unions, Ofer Eini, entered the picture just yesterday, offering support for the protesters and promising that the Histadrut labor federation would put forth its own solution to the housing crisis.

The government's new proposal includes the construction of low-rent housing for 20,000 students; discounts to builders on state-owned land for the purpose of thousands more low-rent apartments and the construction of thousands of apartments earmarked to be sold to first-time home buyers.

Students will get dormitories at all Israeli universities and a number of colleges. They will be built on land zoned for public construction, for which the builders will not be charged. The hope is that students will leave their urban rentals for the dorms, increasing the supply of rental apartments on the free market and consequently driving rents down.

The new dorms should be move-in ready within 18 months.

Students are also being promised 50 percent discounts on bus and train travel using electronic passes, in hopes of luring some of them out of their big-city rental apartments and into cheaper quarters in more distant communities. According to Netanyahu, the train to Tel Aviv University takes just 23 minutes from Lod and 25 minutes from Kfar Sava, while the ride from Kiryat Gat to Ben-Gurion University of the Negev in Be'er Sheva is also just 25 minutes.

Netanyahu did not say how many new low-cost rental apartments they envisioned, with developers getting a discount of between 25 percent and 100 percent on the cost of the land which, a discount that the ministers expect will be passed on to tenants.

Nor did they give an exact figure yesterday for the number of apartments that will be built by the contractors who submit the lowest per-unit retail price. The developers are to receive a 50 percent discount on the cost of state land. The housing and finance ministries estimate that this will reduce the cost of land for each home by up to NIS 150,000 and the final price of each apartment by hundreds of thousands of shekels.

Netanyahu, Steinitz and Atias are hoping that these measures, combined with the property reforms promised by Netanyahu, will, if passed, lead to a construction boom that will eventually bring prices down.

"The housing crisis in Israel is a real problem," Netanyahu said at yesterday's press conference. He blamed "government bureaucracy" for the housing shortage. "The Israel Lands Administration, a government monopoly, controls over 90 percent of Israel's lands," Netanyahu said. He further promised that the government's goal is to implement "fundamental changes in this structure, and to develop the market for those people hoping for affordable housing."

Steinitz said at the press briefing that there are 140,000 apartments, or apartments that were converted into offices, standing empty. The government wants to put residential tenants into at least some of these, possibly by limiting the waiver on the payment of city property tax (arnona ) on uninhabited properties.

Yesterday the Histadrut leadership convened to discuss the housing shortage. Chairman Ofer Eini told the meeting: "Many Israelis feel that the state is slipping through their hands." Eini has scheduled a press conference today to explain how the Histadrut proposes to end the housing crisis and deal with the wider issue of excessively high retail prices.

Eini said the Histadrut supports the housing protest, calling on the cabinet "to adopt a conceptual change." He said the state must increase its involvement in the issues behind the civil struggle such as housing and product prices, while demonstrating economic responsibility.

The union called on Netanyahu to revive the "round table" of discussions among union, government and business leaders.

At yesterday's meeting Eini said the Histadrut will call for freeing up more state land for residential construction and may propose the creation of an agency to supervise state construction. He stressed, however, that housing was not the only item on the emerging social agenda.

Union leaders said there is a general sense of frustration with the government's performance on economic issues; according to one, "housing was merely the straw that broke the camel's back."

Histadrut leaders yesterday rejected criticism of Eini for not publicly addressing the expanding civil protest until now. "We wanted to let the street talk. We expected that at first it would be the young people who would carry the big protest movement on their backs. Now that the protest has gathered momentum, it's time for us to lend a hand, seeing as it's composed of many salaried employers who are represented by the Histadrut," one official said.

Student leaders of the protest were harsh in their criticism of the government's proposal, which they said will help building contractors and wealthy businessmen.

"Who will get the land for free; will it be the people of Israel" asked Daphni Leef, the woman who initiated the tent protest. "It is the contractors, the wealthy, who will be able to build for free, and that's what Netanyahu is presenting as affordable housing," she said.

Leef views Netanyahu's focus on student housing as an attempt to divide the protest movement further. "Why is he proposing benefits for students? What about the elderly? We say no to his proposal," Leef said.

Foreign Minister Avigdor Lieberman, meanwhile, said he had no intention of entering the fray. "I don't plan to join the political discussion and to hand out grades to the prime minister and my cabinet colleagues," Lieberman said yesterday. "I think the public attack on the cabinet, the prime minister and the finance minister are inappropriate. The crisis wasn't born yesterday, it's years of neglect, the picture on the ground is not correct. Look at the crises in the European Union, now there's a second rescue plan for Greece, look at what economic troubles there are in the United States, we have growth here. On the macroeconomic level we're still okay. The Europeans tell us we have rich men's troubles, let's get some perspective here," Lieberman said.

"We are continuing the struggle - the students are a part of the wide social struggle for affordable housing," the National Students' Union said in response to Netanyahu's plan. "The prime minister is offering students an unprecedented benefits package and this is appreciated. However, the students are fighting for all Israeli society and not only for themselves," said the organization.