The Marker, Gili Melnitsky, 28.11.2020
The grant program of the Minister of Construction and Housing, Yaakov Litzman , for the housing market has been distributed in recent days to the comments of the professional bodies in government ministries. At the heart of the plan is a key principle: providing a grant of NIS 100,000 to buyers of second-hand apartments in local authorities where a conditional grant is given in the years 2018-2020 as part of a price-per-tenant program. The cities in this category include Netivot, Sderot, Ofakim, Beit She'an, Hatzor HaGlilit, Safed, Kiryat Shmona, Shlomi and Nahariya.
According to the plan, the grant will be given to second-hand apartment buyers who are defined as homeless according to the rules of the Ministry of Construction and Housing, including single, divorced and homeless widows who are aged 35 and over; Wheelchairs aged 21 and over confined to a wheelchair; A married or publicly known couple in accordance with the definition of the Ministry of Construction and Housing, with or without children and without age restriction; Couples who are about to get married within three months from the date of submitting the application to the Ministry of Construction and Housing for the issuance of a certificate of eligibility; And a single parent with at least one child.
The potential of the program is limited
The grants will be given for a deal to purchase an apartment that costs between NIS 250,000 and NIS 700,000. In other words, these are apartments that are mainly in the periphery - in areas with sufficient supply. The area of the apartments included in the plan must be larger than 40 square meters. In addition, the apartment cannot be purchased from relatives and the buyer is obligated to own it for at least five years.
Eligible persons will be able to obtain a mortgage-adjusted mortgage in coordination with the banks, in accordance with the regulations of the Ministry of Construction and Housing. The fear is that the grants will lead to a rise in prices - and will eventually roll over to sellers. In addition, senior government officials fear fictitious deals.
A key question that arises from the draft of the plan at this stage concerns its budget framework, which stands at only NIS 17 million. Without significant budgetary support, the program's potential is to assist only 170 households. In addition, there is controversy over the list of cities included in the plan. This is because the list was determined on the basis of the land subsidy mechanism at the price per occupant. The basis for determining the list raises the question of why to limit the plan only to places where land values are low, given the fact that these are second-hand apartments.
Litzman demands an additional budget of NIS 1 million for a computer system that will help manage the program - an unclear requirement based on existing computer systems as part of the price per occupant - and NIS 2 million for operating a program to monitor and control the program for a period of four years. Litzman also demands that a standard be assigned to a domain manager in order to coordinate the handling of the program and its implementation.
Beit Shean. The Ministry of Finance and the Ministry of Justice are expected to raise questions regarding the photo program : Emil Salman
The government understands that this is not a step that can provide a solution to a large number of homeless people and the plan will not create a significant change in the market. This is evident against the background of data from the chief economist at the Ministry of Finance , which indicate an annual decline in the number of transactions carried out in the real estate market - but not to the considerable extent they expected with the outbreak of the corona crisis.
A puzzling choice by Litzman
Litzman's efforts to pass the plan by a government decision, while his government housing plan "Apartment at a reduced price" is stuck on Finance Minister Israel Katz's table - seems puzzling. Instead of pressuring Katz and finance officials to allow the acceleration of land marketing mechanisms in reduced price tenders , Which will increase the supply of housing throughout Israel, enable the construction of tens of thousands of housing units and help young couples enjoy affordable housing, Litzman chooses to quickly promote the housing program for the homeless to purchase second-hand apartments.
It is estimated that the Ministry of Finance and the Ministry of Justice are expected to raise a number of questions, both regarding the need for the program and its ability to influence the housing market and at the procedural level, especially regarding the local authority determining mechanism. Apparently the plan will not be put to a vote today and will require amendments.