The housing cabinet, headed by Minister of Finance Moshe Kahlon, will convene tomorrow for its second discussion, at which a number of proposals for the first actions Kahlon intends to take are expected. Among other things, these include a decision to market all the state's land tenders through the buyer fixed price method (mehir lamishtaken), the option of splitting apartments, allowing construction on open land in cities, housing solutions for minority communities, proposals for streamlining industrialization of construction, and urban renewal. The most significant proposal to be raised tomorrow for approval by the 15 housing cabinet ministers is the rejuvenation of the buyer fixed price method, which was suspended in late 2013 by then-Minister of Construction and Housing Uri Ariel.
Under the proposal, the Minister of Finance plans to market all the state land tenders until 2017 in the framework of this plan. The contractors and developers participating in the tenders will compete with each other for the lowest price bid per square meter per apartment. According to the proposal, the discount granted by the state on the value of the land will vary between 10% and 60%; the Israel Land Authority Council will establish the rules. One restriction on the land discount was set: a NIS 250,000 ceiling for land per housing unit. The lower the value of the land, the greater the discount granted.
The most significant change in comparison with the previous buyer fixed price tenders is in the eligibility criteria. Only two criteria will determine who is eligible to buy a cheap apartment in these projects. The first is the buyer being without housing according to the Ministry of Construction and Housing's definitions (single, age 21+, or a family that have had no rights whatsoever, separately or jointly, in an apartment or part of an apartment since June 1, 1971). The second is that the party is a couple or a single person age 35+. The Ministry of Finance believes that the program will cost NIS 1.2 billion in 2015, due to "reduced revenue from land sales."
Published by Globes [online], Israel business news - www.globes-online.com - on June 21, 2015
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