Some essential background: the Israel Land Administration is the professional body subject to the minister of housing and construction, and its sole function is to sell land and safeguard it. The Israel Land Administration Council is the body that sets policy for the Israel Land Administration and oversees its work. The council has nine members - representatives of government ministries and the Jewish National Fund - and its chairman, the minister of housing, sets its agenda and has a double vote. The Israel Land Administration Council takes basic decisions, for example about agricultural land, guidelines for land tenders, and criteria for eligibility for affordable housing. The Israel Land Administration is responsible for the council's implement the policies and decisions.
The nominee for the Israel Land Administration Council Chairman, Moshe Kahlon, is building his house in Haifa (while living in a rental home in Atlit in the meantime), and has personally experienced the slow and convoluted planning and building process. In the mobile market, it was possible to carry out reform at digital speed, but housing prices are not lowered in one year or in two. Kahlon is putting his image at great risk.
Minister of Housing and Construction Ariel Atias was also praised for his actions when he was communications minister, but was burned in the real estate market. Prime Minister Benjamin Netanyahu has a simple message: you failed - both as chairman of the Israel Land Administration Council and as the man responsible for carrying out land sales by the Israel Land Administration, where reform has not yet taken root. Atias takes pride in the high land sales figures, but when the number of tenders that were completed and went into the construction stage are counted, the numbers are far lower. It is doubtful whether there were 20,000 housing starts in 2012.
We can ridicule the last rabbit that the magician has pulled from his hat before the curtain comes down on a term during which housing prices rose by more than 40%. We can talk about the move in terms of panic. In truth, Netanyahu could have done this a long time ago. The coalition agreement explicitly states that, in 2010, "a public figure will be appointed by the government" to head the Israel Land Administration Council. Netanyahu did not implement the agreement, Atias naturally objected to losing the post of Israel Land Administration Council chairman, and the result was a special interest-based minister of housing, with the urge to turn Harish into a haredi (ultra-orthodox) town with affordable housing criteria that benefit the haredim.
Netanyahu has finally shackled coalition negotiations with Shas and complicated the picture. After Netanyahu solemnly swore to take the housing and interior portfolios away from Shas, Kahlon's appointment essentially ousts the housing minister from his position as Israel Land Administration Council chairman. Kahlon will set the Israel Land Administration Council's agenda, and will report to the government as a whole, and not to the minister of housing. The necessary legislation can be passed after the new government is formed.
Separating the authority and control of the Israel Land Administration and the Israel Land Administration Council is asking for trouble. It also reopens the debate about which minister should be responsible for the Israel Land Administration. The Israel Land Administration has a long history of nomadism between various ministries, especially when the portfolio was held closely by former Prime Minister Ariel Sharon. There is nothing new here. There is a real risk that upheaval in the important real estate bodies is liable to create uncertainty and make contractors hesitant about building.
For a long time, Netanyahu has felt a sense of failure in real estate. His baby, the Israel Land Administration reform, is floundering. The reform in the planning and building procedures, which Netanyahu feels is his second most important reform, is completely stuck in the Knesset.
Netanyahu's move simultaneously puts the insane housing prices at the center of the public's attention, where it should be, but at an astonishing moment: the day before elections. Will the voter believe him, or boo the magician's last rabbit?
Published by Globes [online], Israel business news - www.globes-online.com - on January 21, 2013
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