Israel's Real Estate Crisis Needs More Than New Leadership

As Israel approaches elections, the future of the real estate market hinges not on who leads the next government, but on concrete policy changes. Three main scenarios are possible: a government change, the current government remaining in power, or new elections due to an inability to form a coalition. Regardless of the outcome, the next government must establish a dedicated housing cabinet to address the market's stagnation. This cabinet should move away from discount housing projects and focus on a balanced approach, offering a 10% discount to 90% of the public rather than a 90% discount to 10%.

The proposed solutions focus on increasing the supply of housing. This includes a significant expansion of long-term rental projects, utilizing existing vacant apartments and issuing tenders for land suitable for long-term rentals. The government should empower the state-owned "Dira Le'Haskir" company and streamline its cooperation with the Israel Land Authority. Additionally, the government needs to actively manage land tenders for construction, rather than solely relying on demand-side measures like purchase taxes or interest rate hikes. The article criticizes the current "discount housing" programs, arguing they inflate prices in certain areas and benefit a select few, suggesting a shift towards broader discounts for the general public and a separate, national housing plan for military personnel and those in need.

Furthermore, the article calls for stricter oversight and penalties for contractors who fail to meet construction standards, citing issues like structural defects and poor workmanship. Implementing significant fines and potentially suspending licenses for non-compliant contractors could improve building quality. Finally, it is argued that the Ministry of Construction and Housing should be led by a real estate professional, emphasizing the critical need for dedicated expertise to tackle the pressing housing issues facing Israel.