The most important and crucial reforms in the Israeli housing market in decades could come about only after a massive “reform” of the sector, an Israeli Housing Minister said Tuesday.
Speaking to The Jerusalem Times, Minister Aryeh Deri said the housing sector needs to be “reformed” in order to be more efficient and affordable.
According to Deri, the “reforms” he is referring to include reducing the number of buildings and the number and types of units, allowing people to live in multiple dwellings and giving more choice to buyers.
Deri also stressed that there needs to, “be a rethinking of the market.
This is a very serious reform that is needed,” he said.
The minister’s remarks came after a survey by the Israeli Housing Authority (IAA) found that the number one cause of Israeli households being priced out of the housing market is a lack of affordable housing.
According the IAA’s survey, one in five households is currently priced out because of unaffordable housing, while another one in three homes are priced out due to insufficient rental units.
While Deri is not advocating the creation of more affordable housing, he is calling for the creation, maintenance and improvement of affordable affordable housing to make the sector more sustainable and attractive to investors.
The Israeli Housing Ministry estimates that there are roughly 200,000 people in the country with incomes below 150 shekels ($1,200).
The average Israeli household spends about 1,200 shekeles per month on housing, according to the IIA.
The ministry, however, is facing an increasing amount of complaints about housing quality, including a shortage of affordable rental units, a lack at least of three to four months’ rent for each of the previous years and the failure of developers to maintain their properties in good repair.
According a report published in the Wall Street Journal last week, more than half of Israeli apartments are “out of service,” meaning that they are either “poorly maintained,” have a broken door lock or are not equipped with proper heating, ventilation or air conditioning systems.
According that report, Israeli cities are in a “dangerous situation” where more than 30 percent of new construction projects in the past two years were delayed by at least five months.
The report also found that of the 50 new housing projects approved in 2014, just 12 of them were fully operational.
The IAA said it was considering setting up a housing watchdog group to oversee the housing and other aspects of the development process, including the sale of the land for new housing units and the completion of the rehabilitation of existing properties.
The housing watchdog should be made up of local officials from all the municipalities in the state, Deri told The Times.
“The watchdog should also be able to give advice on how to develop the housing system in Israel, which is what we are working on,” he added.
The comments come a day after Israel’s Housing Minister Yair Lapid told the Wall’s JTA daily that he would like to see the country’s housing market “renegotiated” as soon as possible.
“We need to start this process and make sure we get a good system in place before we have to renegotiate,” Lapid said.
“We need a lot of work on this.
We need to get the house in order.”
According to the government, the average Israeli family spends about 3,500 shekele ($45) a month on rent.
The average monthly income in Israel is about 60 shekeled ($1.25).