Home » Issues » Articles » The Solution for Israel’s Housing Shortage: By Moshe Feiglin

The Solution for Israel’s Housing Shortage: By Moshe Feiglin

It is becoming more and more difficult to attain housing in Israel. Here are some interesting statistics: In 1984 – thirty years ago – Israel’s GNP was 30 billion dollars. Today, it is 300 billion dollars. Back in 1984, the average income per person was $7,000, while today it is $38,000.

Sounds wonderful.

But take a look at the next statistic: In 1988, approximately 60 average salaries were needed to buy an average 4 room apartment in Israel. For the same apartment today, one would need 144 average salaries.

In other words, we are producing 10 times more than in the 80’s. We earn 5 times more and nevertheless, we must work more than twice as much in order to buy an apartment.


First of all: Lack of Space

The first reason for the housing crisis is because in the early nineties, Israel stopped building in Judea and Samaria. Land reserves in Israel’s pre-1967 borders are practically depleted. Those who think that there are land reserves in the Negev are mistaken. Although the Negev looks large and empty, it is mostly occupied by the army, illegal Bedouin settlement, infrastructure and green areas. With the current (blessed!) population growth trend, Israel needs 70,000 new housing units annually. That is more or less like a new Ramat Gan every year. Add to that the million and a half new olim (immigrants) expected to arrive in Israel over the next decade, with G-d’s help, and we have a serious shortage on our hands. There is nowhere to put all of this new housing, and there is already talk of building into the sea…

At the present pace and the existing construction plans, our children will have nowhere to live. We can close the country in two decades, or choose the Hong Kong option and live in one-room apartments in skyscrapers, which would only put the problem off for a short while.

When there is no land, the price of available land rises. That is very simple. As soon as we admit to ourselves that this is our Land and once again build in Judea and Samaria, the housing market – particularly in Israel’s central region – will regain its sanity. A large city like Modi’in that would be built in the foothills of the Talmonim region, 10 minutes from the Ben Gurion Airport, would relieve the pressure from greater Tel Aviv and lower housing prices. Israel must immediately plan and build these types of cities all along the western foothills of Judea and Samaria.
The second problem is that within Israel’s pre-1967 borders, the situation is fundamentally flawed. The State of Israel owns approximately 90% of the land reserves within those borders, an effective monopoly. It makes no difference that it is the State that holds these lands and not a private company. The monopoly dramatically raises the price of land for construction. The solution is to privatize, or more precisely – to return – the land to the nation. (To the nation – not to controlling interests!) Israel must introduce a process of registration of parcels of land to its citizens, (by lottery according to criteria to be established) and to allow the market forces to determine the price.

The third problem, of course, is the bureaucratic monster that stands in the way of anybody who requires a building permit. The wait for the permit can take as long as 15 years!

Until now, Israel had focused its attention on the third problem or on magic solutions like 0% VAT. As important as these solutions may be, nothing will fundamentally reduce the price of housing without solving the land reserves and state monopoly issues.

The solution for the housing problem is to restore the national lands to the nation on both the personal and national level.


3 Responses so far.

  1. defiantjewess says:

    Agreed, Mr Feiglin. if we build out the Judea Samaria and the north and south both of which have been run down due to the war of attrition) , by establishing true peace, we will have affordable housing. How we acquire it is a different story. I believe we should take aggressive steps now to annex the lands, and also to remove the immediate threat to Israel so that there will be no pall of war constantly hanging over her heads. That means going in and removing Hamas and their weapons, without regards to human shields— that is a losing strategy that Hamas has imposed on the Jewish government. Once we take the first positive proactive steps, the world will regard us with respect however grudging.

  2. defiantjewess says:

    HOW ABOUT TURNING OVER A NEW LEAF FOR THE NEW YEAR, starting with our relationship with our enemies???
    Israel can legally demand that Hamas pays the 9 billion cost of war inflicted on the Israeli people. It is called war reparations.
    Because Hamas and PA are linked and the PA has run interference diplomatically for Hamas, Israel is perfectly justified in extracting reparations from the PA and Gaza in the following matter:
    1. Seizing a large percentage of the one billion dollars in customs revenue which Israel collects on behalf of the PA.
    2. Charging a tariff or reparations tax on all good entering or leaving Gaza. Charging a similar tax on goods entering or leaving PA territory.
    3. Collecting immediately the electric bill and if the PA -Hamas won’t pay it, shut off the juice until their backers rush to pay the bill for them.
    4. Charging a large surtax or penalty tax on very kilowatt of electricity delivered to the PA- Hamas-Gaza.
    Israel now faces tax hikes and budget cuts to pay for this war which did serious damage to its economy costing the military billions of shekels. Israel should not suffer tax increases and budget cuts. Those problems should be laid at the feet of Palestinians.
    Israel is perpetually on the defensive. It is time to go on the defensive.
    This demand for reparations and our power to collect them allows us to seize the initiative, punish those who support war against us, including the enemy population, and provides us with justice and dignity.
    This policy has another advantage, it will be wildly popular in Israel. In fact it is the ultimate unifying issue. If you are a leftist and believe in “social justice” this policy of reparations advances your goals. If you are a rightist, likewise. This could be the rallying cry “lets take the cost of this war out of the Arabs hide.”

  3. Donny says:

    An excellent article. one of several reasons why we need to hold on to Judea & Samaria. But Moshe Feiglin’s suggestion only solves part of the problem. Commuters will still be crowding into the Tel-Aviv area every day. The infrastructiure will still become overwhelmed. Demand for homes in the center of the country will still rise. What is needed is the creation of businesses and jobs in other parts of the country, the Negev and the Galil, which in turn will encourage more people to want to live there, and reduce the pressure on the center of the country.

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