Lapid to change rental tenders

Tenders will be based on lowest rent instead of the highest bid on the land.

Sources inform ''Globes'' that Minister of Finance Yair Lapid plans to change the method of rental housing tenders in his rental housing program: competition between bidders will not be over the price of the land, but over the lowest rent to be offered tenants.

"I am prepared to lose a lot of money on the land in order to lower home prices," Lapid told Friday newspaper "Sofhashavua" in an interview. "The rental housing program will be operated with a zero cost for the land."

Ministry of Finance officials did not know what to make of this remark, which does fit tenders that have already been published. The remark deeply embarrassed top ministry officials at the inter-ministerial committee, which recently published three rental housing tenders (in Herzliya, Ramat Hasharon, and Haifa), in which the bidders competed over the price of the land.

Lapid's statement has also confused developers, on top of the hundreds of requests for clarifications that the Accountant General must answer in view of the complexity and confusion in the current tenders.

An examination by "Globes" among Lapid's aides found that his remarks were part of his plan to change the tenders' model from competing over the price of the land to competing over the rent. The idea is that when the new government company, Rental Housing, begins operating, it will publish the subsequent tenders, instead of the Accountant General. The new company's director general is due to be chosen next week from among 30 candidates.

The sources added that the Israel Land Authority has halted the sale of land for rental projects and is leaving the field to Rental Housing's exclusive handling.

"Globes" reported in a series of articles that the rental housing tenders' main component will be rent. The model will be BOT (build, operate, transfer) for 30 years plus 30 years, with the government keeping ownership of the land and the developer cannot sell the apartments for 10 or 20 years, which they can do under current tender terms.

Published by Globes [online], Israel business news - - on March 17, 2014

© Copyright of Globes Publisher Itonut (1983) Ltd. 2014

Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018