Calcalist, Amitay Gazit, 24.12.2020
It has been seven years since the state-owned company rented an apartment. This was done in the name of the vision of the then Minister of Finance, Yair Lapid, to establish in Israel a stock of tens of thousands of apartments for institutional and long-term rent. A Calcalist investigation found that the Israeli government, in its many incarnations since then, has left the apartment rental project alive, but has also done everything to make it difficult to fulfill its vision.
From 2014 until today, the state, through the Israel Land Authority, allocated the company plots for the construction of only 2,200 apartments for rent only as part of the plans approved by VOTAML - the government supreme committee set up to expedite building permits for large plans. And the State Commerce undertook to allocate plots for the construction of about 70,000 apartments for rent, meaning that so far an apartment for rent has received only 3% of the area promised to it.
Not all of the WTMAL plans are mature and ready for marketing, but even when looking at the few plans from which Rami has allocated plots of land for rent, the data is very far from the legislature's intention. Out of about 100 plans that went through the WTO, only seven plans for an apartment to rent received plots that allowed construction for rent. According to law and government decisions, in these seven plans together, more than 4,500 apartments for rent are to be built, Of a little more than 2,200 apartments for rent, ie only about 49% of what is required.
At the same time, over the years, another 20 plots of land with plans approved by other planning institutions have been allocated to rent an apartment, for the construction of only about 4,000 additional apartments. So in total, in the seven years of operation of an apartment for rent, the state has allocated land to the company to build less than 7,000 apartments for rent, very far from the promise of "150,000 apartments for rent within ten years."
Last month, Calcalist unveiled the plan to merge an apartment company to rent in another government company - Cities, which serves as the government's executive arm for building infrastructure for new neighborhoods, which of course casts doubt on the continuation of its original path.
In addition, the company's CEO Yair Tal will leave the company in March 2021 and the vision to flood the country with apartments for rent is currently at a crossroads.
The repression of the company in particular and rental housing projects in general is mainly a result of a change of ministers in the Ministry of Finance, the appointment of Moshe Kahlon in place of Yair Lapid and the decision to divert resources to the price per occupant project. As a result, even in localities where the state has large land reserves, no rental projects have been built at all, or very few have been built.
This is especially noticeable in Modiin, where 3,500 apartments were marketed at a price per occupant and not a single apartment for rent. Or in Rishon Lezion, where about 4,600 apartments were marketed at a price per occupant, along with two projects for only 260 apartments for rent.
Rami is not interested
An apartment for rent company was founded in 2013 with the aim of developing the housing market for long-term rent in general and rental housing at a regulated price. Unofficially, the Ministry of Finance hoped that the new and lean company would be able to compete withmonopoly The lands of the Israel Land Authority (RMI) in the world of real estate marketing and the signing of development agreements with local authorities.
In order to secure the vision, the OTMAL was founded in 2014, and the temporary order that regulated its activities gave it extraordinary powers that allowed it to skip planning kits. The apartments for rent, and the third increase in the supply of apartments for rent at a reduced price.
To achieve the goals, the Temporary Provision has set a default according to which in any plan approved by VOTAL 30% of the apartments will be allocated for long-term rental housing. And the north, where the demand for apartments is relatively low, and it is also possible to reduce the rate of apartments for rent in cases where a 30% rental project is not economically feasible.
An examination by Calcalist shows that already at the initial stage, the government kicked off a vision that it itself had promoted. Thus, eight plans were found in the Haifa district, in the center and in Tel Aviv in which the rate of apartments for rent was reduced, and it is not clear what the justification is for this. In a plan in Haifa in the Bat Galim neighborhood for the construction of 1,000 apartments, it was decided that no apartments for rent would be allocated at all; The same is true in Bat Hefer, where a plan to build 1,200 apartments was approved; In two plans to build 10,000 apartments in total on the ruins of the Tzrifin camp, only 10% of the apartments for rent were allocated, and in the plan in Tel Hashomer for the construction of 3,000 apartments, only 20% are designated for rent.
Construction in Lod. The rate of apartments for rent has been reduced non-stopPhoto: Gerald Benisho
After the government announces a complex whose planning is being transferred to VOTAML, the plan is finally approved within about two years, and from a planning point of view it is possible to start building. She is the one who negotiates with the invading or legal landowners, she is the one who manages the tenders and lease agreements with the construction companies. So only the Israel Land Authority knows what the condition of the land is, whether it is available and can be marketed for construction.
In 2015, about a year after the establishment of the WTMAL, Moshe Kahlon was appointed Minister of Finance and changed his priorities. Kahlon expanded the price per occupant program, which encourages the purchase of affordable apartments. For rent, pushed.
The mayor withdrew
The fear that the new company would interfere with Rami's hegemony led to it not being able to allocate land to the company on a large scale. The number of apartments at the price per occupant, so allocating land for the apartment to rent hurt these efforts.
In addition, RMI is also measured by cumulative income, and the price it receives for land earmarked for the construction of a rental project is much lower than the price paid for residential building land.
In order for an apartment to be rented out, it can develop and market a plot of land, and Rami has to allocate it to it. But many times its efforts failed, after Rami piled up difficulties. For example, the company tried to copy to one of the cities in the center of the country a successful model implemented in the nursery complex in Tel Aviv, where the municipality and the Israel Land Authority had joint ownership of the plot. Withdraw after it was clarified to him that if he cooperates with an apartment to rent Rami will not allocate land that was needed for a construction eviction project.
In any regular real estate auction, or one of rental housing, there is a tenders committee that sets its rules and approves changes. Because three of the five members of the committee are representatives of RMI, any change in the tender rules requires the approval of the authority, but it often took weeks for changes required due to problems raised by developers to be approved.
In fact, the plans to merge an apartment for rent with an urban company gave a renewed boost to the vision of an apartment for rent. It was estimated that the merger would strengthen the capabilities of the two companies and provide an incentive and resources for the rental housing project. The man who is leading the idea is the director general of the Ministry of Construction, Yair Pines, who will close a symbolic circle, because in 2013, when he was coordinator in the budget department at the Ministry of Finance, he led the procedures for establishing the company. Judging by his past actions and statements in recent months, he certainly intends to harness the power of an apartment to rent to increase the supply of apartments whether it merges with cities or stays separate.
The election decision made this week, paralyzes the political system for at least six months and has shuffled the cards again. The merger did not materialize and it is hard to believe that someone will suddenly decide to support rental housing, which, God forbid, will credit Yair Lapid.
In response to the allegations raised in the article, Marami stated: “The focus of the government's activity in recent years has been marketing using the price per occupant method, and accordingly priority has been given to this. Also rental programs often suffer from a lack of economic feasibility, mayoral resistance and low demand. It is not right or fair to link this to the PA's activities. "