Israel's affordable housing uprising

Sunday, July 24, 2011 |  Ryan Jones

What began as a symbolic struggle over the price of cottage cheese is now focused on the most severe economic hurdle facing most young Israelis: buying their first home.

An estimated 20,000 Israelis demonstrated in central Tel Aviv on Saturday, demanding that the government do something to curb skyrocketing property and rental rates.

Rental and property rates in Jerusalem and Greater Tel Aviv are on par with the most expensive cities in Europe and the US, while Israelis typically earn less than half what their American and Europen counterparts do.

Unfortunately, Saturday's rally, which saw the coming together of "tent city" protestors from around the country, turned highly political.

Certain groups had already dropped out of the movement after learning that its leaders were refusing to negotiate with the government because their chief aim appears to bring down Prime Minister Benjamin Netanyahu.

There was also violence at the tail end of Saturday's event when a rowdy group of demonstrators began pelting police with stones and glass bottles.

Nevertheless, the Netanyahu government has all but sided with the demonstrators, readily admitting that there is a serious problem in Israel when it comes to housing costs.

"Apartments are too expensive because there are not enough of them. There are not enough apartments because a government monopoly holds more than 90% of the land in Israel and it is not releasing it," said Netanyahu at Sunday's cabinet meeting.

In Israel, it takes roughly five years for a contractor to apply for and receive approval to start a new housing project. In addition to the long wait, contractors must also pay exhorbitant legal and government fees. The cost of all this is naturally passed on to the buyer.

Netanyahu has long been an advocate of serious land reform in Israel by reducing the power of the Israel Land Administration (ILA). But Netanyahu has been constantly halted in his efforts by his more socialist-minded left-wing opponents.

"I]n order to change this, it is necessary to bring about a fundamental change, to break the government monopoly, to simplify the planning and building committees and to simplify the ILA and change it into a body that markets the land of the state of Israel for the Israeli people," explained Netanyau.

Ironically, it is the leftist-led demonstrations that may finally provide Netanyahu with the needed backing to implement the reforms he has so long called for.

Finance Minister Yuval Steinitz said buyers and those renting should see a reduction in housing costs as early as the end of this year as a result of new measures being implemented.

Steinitz also sought to remind those who have turned this into a demonstration against Netanyahu that the current situation was created by decades of socialist-style beauracracy, in addition to personal greed on the part of the contractors.

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