The Marker, Gili Melnitsky, 21.01.2021
The Ministry of Construction and Housing and the Ministry of Finance have reached an agreement on financing the program of the Minister of Construction and Housing, Yaakov Litzman - housing at a reduced price.
The government decision, which is expected to be signed in the coming days, stipulates that by July, tenders will be published for about 6,000 apartments in the periphery. About NIS 600 million will be allocated to subsidize development work on projects in the periphery and to grants to apartment buyers.
Buyers of apartments in the periphery will be given a grant worth NIS 40,000 - if the land component of the apartment is less than NIS 100,000 (the grant is similar to that given in the previous program of the previous finance minister, Moshe Kahlon, price per occupant). The parties who develop the land will be given a sum of NIS 60,000 per housing unit - if the land component of the apartment, without development expenses, is less than NIS 50,000.
Arad, grants to apartment buyers. Those photographed have nothing to do with the article Photo: Eliyahu Hershkovitz
The benefits system is intended to enable developers and contractors to promote housing projects in the periphery with low economic investment, thus trying to increase the existing supply in cities such as Afula, Arad, Dimona, Ofakim and Yeruham - and attract new residents. The main question that arises is whether the auctions will create suitable demand from homeless people in exchange for tempting prices. The Israel Land Authority learned as part of a price-per-tenant program that some of the tenders in the periphery were published again and again and remained uninterested for long periods.
"Increasing marketing while emphasizing apartments at a reduced price is critical, and will help prevent a housing crisis in the coming years."
The explanatory memorandum to the decision reads: "In light of the experience gained in the price per occupant, it can be learned that without subsidizing the various markets, even in a housing program at a reduced price, more marketing will fail ... Increasing marketing while emphasizing reduced price apartments is critical, and will help prevent crisis Housing in the coming years. "
It was further claimed that "in recent years there has been a shortage of 35,000 apartments for the housing market, and the Corona crisis has deepened the gap between construction starts and new households - by another 20,000 housing units." The decision will be valid for one year from the date of its approval, and for the purpose of continuing its implementation beyond the said period, re-approval will be required by the government.
The additional subsidy will decrease over time. For a tender to be published after July 1, 2021 - NIS 30,000 - NIS 50,000 per apartment; As of January 1, 2022 - NIS 20,000 - NIS 40,000 per apartment; From January 1, 2023 - NIS 10,000 - NIS 30,000 per apartment.
A dedicated committee will be able to determine when the economic viability of the project is very low - even after some of the apartments are allocated for free market marketing, and these apartments will also be given a development subsidy for the housing units included in the tender that the developer may sell in the free market. The subsidy will not be given for a number of apartments exceeding 50% of all the apartments in the marketed complex.