Unfortunately for the Netanyahu government, it faced one of its most serious crises - a surge in home prices - immediately upon taking office, a crisis that is now accompanying the government as it enters its third year, and shows no signs of abating any time soon. Home prices have risen 40% since the start of Prime Minister Benjamin Netanyahu's term, and young couples stand stunned at realtors' and contractors' offices, before they go back to sleep on the couch at mommy and daddy. Young couples with no hope of owning a home are beginning to organize, the issue is a hot topic on social networks, and people are starting to hit the streets in protest.
It is the nature of the real estate industry for procedures to take a long time, but this crisis hit Netanyahu fast. It should be said to his credit that he is trying to find solutions, but will the way he has chosen bring about the hoped for solution? Below are some points, if he wants his plan to become operational instead of only generating brief headlines.
To simple, cheap, and immediate measures should be taken immediately to speed up procedures at the National Planning and Building Commission and at the local and regional commissions: hire at least ten more planning experts for each commission, for which no reform is needed at all; and enforce the law that requires the commissions to give priority to large residential projects and remove the ministers' representatives from the committees as they evade their responsibilities to give timely responses for transport, environmental, and other projects.
The way Netanyahu presented his reform does him no honor either. Just as Minister of Finance Yuval Steinitz, Minister of Housing and Construction Ariel Atias, and Minister of Transport Israel Katz were hinting at plans at the "Globes" Real Estate Conference last week, Netanyahu held a press conference, where he presented his "supertanker" for shortening planning procedures. It seems that Netanyahu was taking the ministers' credit for himself.
The political circumstances of Netanyahu's plan is also worthy of examination. He launched it just days after Shas ministers Minister of Interior Eli Yishai and Atias announced that the party would quit the coalition unless something was done about home prices. Reform should not be implemented out of panic, but with courage.
The person trying to carry out two large reforms in the complicated and slow-moving real estate industry is also seeking to excite passions and take credit, but credit is given for implementation, and Netanyahu has no record there.
The Israel Land Administration, which the Knesset passed in August 2009, and which would greatly improve the marketing of land, remains stuck because the ministerial team headed by Netanyahu cannot reach deal with the Histadrut (General Federation of Labor in Israel) and Israel Land Administration employees. The cabinet approved the 500-clause new planning and building commissions law in March 2010, and the Knesset Internal Affairs and Environment Committee has already discussed 100 of them. The committee will complete its work in two years at best, at which point the fight for votes and, probably, petitions to the High Court of Justice will just begin.
Moreover, the patent for Netanyahu's idea of a National Housing Committee is already owned by former Prime Minister Ariel Sharon, when he was minister of housing in the 1990s, with his Residential Building Committees. The only difference between the two is the name. The concept is the same, however: concentrating all the authority of the local and regional planning and building commissions in a single body that will operate without restraint from petitions or environmental organizations, whose operations will have no transparency or oversight, because they must operate quick-quick.
The National Housing Committee effectively means that Netanyahu has given up on the new planning and building law, whose core clause is the establishment of "special planning and building commissions", which is just another name for the National Housing Committee and Sharon's Residential Building Committees.
Since that is the case, why table a new law for long-term reform if its core clause is removed and pushed as a separate item?
Sharon's Residential Building Committees ended as a highly critical report by the State Comptroller for not meeting its targets and flawed and irresponsible planning. The neighborhoods built under the committees still suffer from problems with infrastructure and public buildings, and too little green and public space. And the excuse of building home for the more than one million new Russian immigrants, many luxury projects were built in central Israel and the rezoning of agricultural land was handled dismally.
At the time it was said in Sharon's favor that, with all due respect to the importance of meticulous planning, that sometimes time is of the essence and shortcuts are necessary.
There is a dilemma: if the insane real estate prices are really a national emergency, then maybe the establishment and operation of such a committee, with its lack of transparency and meticulousness, is necessary. The dilemma of quality versus time is real under one condition: if Netanyahu has the ability to pass his National Housing Committee plan in the blink of an eye.
The progress of Netanyahu's other reforms suggests that there is little chance of this happening. He has not passed his Israel Land Administration reform 18 months after the Knesset approved it. His new committees will face fierce public opposition against how the legislation was formulated, the committees' composition, and the new regulations. Environmental organization will rise up, and petitions with the High Court of Justice will be filed. The struggle won't be over in days or weeks, but will last over a year. There is no immediate solution.
Netanyahu's National Housing Committees face two big minefields: the committees take away mayors' very real power to sign building permits, and the political fight over affordable housing.
Regardless of a building plan's size, importance, or it is a private or government plan, the mayor has the final word on signing the building permit. That is his or her power, which Netanyahu proposes to take away. It does not take a genius to know that the mayors will resist. Without the power to sign building permits, what do they have left?
This mine will automatically set off the second, and bigger mine: affordable housing. The problem is at source, because no one will take the responsibility for establishing criteria for the eligibility of young couples to participate in affordable housing. Will Shas and the Israeli Arab parties agree on criteria to give priority to IDF discharged soldiers? Shas want to give priority to young couples with at least four siblings. The question as to which segments of the population will have the right to participate in affordable housing projects is a difficult one.
In order to promote affordable housing projects, a division of authority between the central government and local authorities must be established, whether government-set criteria will meet High Court of Justice tests, and what authority will remain at the discretion of mayors. Any conflict between the central government and local authorities will deal a lethal blow to any affordable housing initiative.
Published by Globes [online], Israel business news - www.globes-online.com - on March 13, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011