Thousands May Skip Discount Housing Lottery Amid Shifting Eligibility

Israel's "Diara beHachna" (Discount Housing) lottery program, which offers subsidized apartments, is undergoing significant changes that may deter thousands of eligible participants. In the most recent round, approximately 8,000 individuals won apartments valued at hundreds of thousands of shekels below market price. However, starting with the next lottery in early 2027, 75% of the winners will be reservists, an increase from the current 50%.

This shift disproportionately benefits reservists, as many ultra-Orthodox participants, who do not serve in the military, are excluded. In the last lottery, reservists already accounted for nearly 60% of winners. With the new policy, the expectation is that reservists will make up 80% of winners in the upcoming round, effectively transforming the program into one primarily for military reservists.

Consequently, thousands of non-reservist participants, including many from the ultra-Orthodox community who may not have registered due to service requirements or unsuitable locations, are likely to be pushed into the open housing market. This creates a dual problem: the state subsidizes housing at a high cost while simultaneously directing a significant portion of the housing-seeking public to a potentially strained free market.

Furthermore, the program has attracted individuals who do not intend to live in the subsidized apartments but rather to sell them for profit after a few years, as evidenced by 43% of winners in certain areas selling their apartments. This practice, coupled with over 100,000 non-winners from the last lottery entering the open market, could further inflate demand and prices, especially as only a limited number of ready-to-occupy apartments are currently available.