Cabinet okays plan to boost housing construction with Chinese labor

Cabinet okays plan to boost housing construction with Chinese labor

Decision cites shortage of skilled Israeli workers and higher efficiency of Chinese companies compared to Palestinian crews

Construction in the center of Tel Aviv. August 10, 2015. (Miriam Alster/Flash90)
Construction in the center of Tel Aviv. August 10, 2015. (Miriam Alster/Flash90)

The cabinet voted on Sunday to increase the number of Chinese laborers in the Israeli housing construction industry, which the Treasury claims will bring down spiraling house prices.

In a statement, the Finance Ministry said the measure would “shorten the average building time for tall buildings and lower the cost of an apartment for the contractor.”

“We have a solemn responsibility to ensure [the construction of] apartments for young couples,” said Finance Minister Moshe Kahlon, who proposed the measure together with Prime Minister Benjamin Netanyahu, after the measure passed in the government. “Therefore we decided to add tens of thousands of skilled Chinese workers who will help stimulate an increase in the supply of apartments in Israel.”

“In my view, this is a necessary and important step to lower housing prices,” Netanyahu said.

Israel’s construction sector employs 216,000 workers, including 37,000 Palestinians and 6,000 foreigners, with some 3,700 Chinese. The new plan calls for another 20,000 construction workers to be brought over from China.

The statement characterized the move as a turn away from Palestinian construction crews, whose availability is contingent on security concerns, and noted the parallel difficulty in getting Israelis to perform some of the grittier jobs in construction.

The lack of skilled manpower was a key bottleneck in expediting housing construction, the statement noted, a problem that stemmed from “a decline in demand [among Israelis] for ‘wet’ jobs, such as flooring, plaster, molding and metal-casting. The absence of Israeli and foreign skilled laborers, and the limited work hours and employment uncertainties (for security reasons) of Palestinian laborers, have led to a lack of skilled workers in ‘wet’ professions.”

These problems have prevented new construction starts for tall buildings. In 2011, 6,500 apartments in buildings taller than 16 stories were started. By 2012, just 3,500 were started.

The decision claims that Chinese construction companies build up to 50 percent faster, and with fewer unexpected costs due to quality concerns, than Palestinian companies.

The net result of this shift to Chinese labor, the statement claims, will see the shortening of construction time for tall buildings by some 20-30% and lowering the contractor’s cost for each apartment by some NIS 50,000, a saving that could presumably be passed on to home buyers.

The cabinet also voted to reexamine the decision in two years.

To prevent fraud and the extraction of illegal fees from the laborers by contractors and construction companies, the decision also establishes an oversight body that will manage the fees and conduct the hiring overseas.

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