The Ministry of Housing and Construction will release another nationwide wave of marketing of land. It will publish tenders for land in 38 towns zoned for 6,900 housing units, including 1,000 rental apartments, of which 900 will be rent-controlled apartments. The marketing of land was announced amid the growing protest for the government to provide housing solutions.
Minister of Housing and Construction Ariel Atias claims that increasing the supply of land for residential construction was the fastest and most effective solution to the housing shortage for young couples and families. "As part of this concept, the Ministry of Housing and the Israel Land Administration continue their focused effort to increase the supply and launch another wave of marketing of land for residential construction."
The tenders for land for rental apartments include lots for 690 apartments in Rosh Ha'Ayin, and lots for 322 apartments in Beersheva's Ramot neighborhood, out of the lots for 558 housing units in the neighborhood.
The Ministry of Housing said that, for the first time, the winner will be chosen after meeting the terms of the rental tender by committing to rent control for up to ten years for eligible tenants based on ministry criteria. The winner will be chosen by weighting its bid for the price of the land and the discount it will offer tenants. Developers will be eligible for large breaks, incentives, and preferences for building rental housing.
The ministry said, "After publishing rental housing tenders for the first time in 2010 without a minimum price for the land, in which the developers received discounts of 10-40% on the price, the Ministry of Housing and the Israel Land Administration decided to improve the method. A 50% weight will be given in subsequent tenders to bidders who offer the lowest monthly rent for ten years.
"Rent for these apartments will be raised only by the increase in the Consumer Price Index (CPI), up to 2% a year. The winner will receive benefits pursuant to the Law for the Encouragement of Construction of Rental Property (5767-2007), and the Ministry of Housing will control the lease terms throughout the rental period."
Atias said, "Increasing the supply will beat demand. We're on the right road. The rental tenders in demand areas are one of the most effective solutions to the housing shortage for young people, and the creation of a sophisticated rental market. Providing housing solutions for couples and young families is a strategic economic and social goal for Israel."
Published by Globes [online], Israel business news - www.globes-online.com - on July 18, 2011
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