Israel will market 30,000 affordable homes in 2022
The Ministry of Construction and Housing and the Israel Lands Authority (ILA) said on Wednesday that some 30,000 affordable homes will go on sale this year, starting with 10,000 units that are expected to come on the market before the holiday. Easter in April.
The initiative encompasses more than 80 cities and towns across Israel, including Ashdod (1,100 units), Haifa (1,300 units), Beersheba (900 units) and Yavneh (1,100 units), according to the announcement.
The apartments are aimed at first-time home buyers, young families, single-parent households, and low-income people deemed eligible for affordable housing through one of the many programs of the Ministry of Housing, including the “Award buyers” (Mehir Lamishtaken), launched in 2015 and being phased out, and the “target price” (Mehir Matara) introduced last year by the new Housing Minister Ze’ev Elkin.
The ‘Buyers’ Price’ program was launched by former finance minister Moshe Kahlon as a lottery scheme under which apartments would be built mostly outside central Israel and sold at discounted prices to applicants who meet certain criteria.
The project aimed to reduce soaring housing prices in Israel and make home ownership more accessible. But the scheme has been criticized for failing to deliver the right quality, size and location of apartments to intended buyers.
“Target Price” also functions as a lottery system and offers a discount of 20% or up to a maximum of NIS 300,000 ($93,460) on the purchase price of the apartment in addition to subsidies of up to to NIS 40,000 ($12,460) in some areas. The latest affordable housing program focuses on areas on the so-called “periphery” of Israel, often with lower socio-economic rankings according to the Central Bureau of Statistics. In many cases, these cities are far from the center of the country and have underdeveloped transport systems and employment opportunities.
Under the “Buyers’ Price” scheme, grants of NIS 40,000 to 60,000 ($12,550 to $18,820) have been approved for eligible buyers in specific locations, often in remote areas or where demand is high. was weaker. It was limited to buyers of projects where the underlying land value of the apartment was estimated to be less than NIS 100,000 ($31,150).
“We have worked to bring [affordable housing program] target price that gives a discount of hundreds of thousands of shekels,” Elkin said in a statement Wednesday.
“This year we will be rolling out tens of thousands of discount apartments, both from past programs and the Target Price program for young couples so they can buy apartments at a reasonable price. I’m proud of the work of the ministry and the ILA who have been working night and day to bring results on the ground. I rely on and hope that over the next year the real estate market in Israel will change,” he said. he adds.
According to the ILA website, from December 2020 to December 2021, land tenders for the development of over 20,000 affordable housing units were listed as closed. Although many tenders closed over a year ago, in many cases the winning developer remained undetermined. The website said the bids were “under evaluation by the ILA Tenders Committee”.
The ILA did not respond to a request for comment.
Last October, the government announced an ambitious housing plan for 2022-2025, aimed at rapidly increasing the supply of apartments in the hope of reducing prices and combating the spiraling housing crisis in Israel.
The plan set a target to begin construction of 280,000 homes over the next four years – significantly more than in recent years – advancing plans for 500,000 more homes, issuing tenders for 300,000 homes on state-owned land and having 180,000 successful tenders.
Reforms to achieve these goals include reducing bureaucracy in general, especially for one-off housing projects – such as those that aim to demolish old buildings to rebuild new ones in their place – and projects that convert offices in residences.