The Times of Israel on Wednesday published a deeply troubling investigation by Ricky Ben-David, our Startups and Business editor, into the country’s housing crisis.
The cost of buying a home has been skyrocketing here for years. An astonishing 400,000 Israelis packed Rabin Square in Tel Aviv one Saturday night in 2011 at the height of protests against the soaring cost of living, with housing prices a central blight. In the decade since then, the average cost of a home in Israel has almost doubled. Needless to say, average salaries have not remotely kept up.
As a result, an ever-greater proportion of the Israeli population is being forced to bid a painful farewell to the prospect of owning a home.
It’s not that construction has ground to a halt. It’s that inequalities in Israel, the economic divides, are widening. Ten percent of Israelis own more than two-thirds of the country’s assets, a study found — and that was seven years ago; the disparities have worsened since.
Those wealthier Israelis are increasingly buying second, third, fourth homes or more as an investment — pushing the prices up, and further out of ordinary reach.
A 2016 study found that 30% of annual home purchases were made for investment. Whereas in 2008 only 2% of Israelis owned two or more homes, now that figure is 10.5%, Ben-David’s piece shows, and among those in the top income decile, it’s some 35%.
Not only are more Israelis being priced out of home ownership — would-be buyers these days have to somehow gather an average of NIS 840,000 ($260,000) in personal equity to cover the Bank of Israel-required 25% minimum down payment and other costs — but rental prices have become astronomical too, especially in the Tel Aviv and Jerusalem areas.
Right now, with higher-education students returning for the new academic year, every barely habitable apartment posted online triggers an immediate avalanche of “when can I come and see it?” pleas, and becomes “lo aktuali” (i.e., rented) very soon after.
Utterly uninhabitable apartments are also reluctantly accepted by desperate renters. And if you want to get a sense of how unscrupulous and rapacious some landlords have become, you might take a look at some of the “apartments” being offered for rent, as collected on the “Israeli apartments that depress me” Facebook page.
Apartments subdivided into staggeringly small rooms; beds in the boidem crawlspace; “bedrooms” where the room literally has space only for the bed; “studios” that feature what are laughably described as “bathrooms” immediately adjacent to alleged kitchens next to minuscule living spaces, with beds suspended above, accessible by ladder; sinks supported on upturned buckets; dilapidation and filth. It’s all there, words do not do justice, and it’s all being offered at obscene prices.
Ben-David’s piece works through the various half-hearted and ill-considered initiatives pursued by our governments in recent years that have signally failed to effectively address the crisis. Plainly, while tax measures, requirements for more affordable housing, and a focus on more public and student housing could help, the root problem is one of supply.
The release of state land for housing is a longtime, notorious bottleneck, attributed by some to a quiet strategic policy designed to encourage Israelis to move to settlements over the Green Line; if so, it has been effective, except that homes are in short supply there too, and prices are no longer anybody’s idea of a bargain.
Perhaps the saddest passage of Ben-David’s article is where a young immigrant to Israel, married and gainfully employed, explains that with the prospect of buying a decent home remote, and a future of indefinite rental unappealing at best, he may have to weigh his future here.
That amounts to a plea to government for action.
Well, we have a new government now. A government whose prime minister says its driving ambition is to do “good.”
Getting the relevant experts together, and formulating and implementing action to help the citizens of Israel put a stable roof over their heads, would be a very welcome, and long overdue, place to start.
** This Editor’s Note was sent out Wednesday in ToI’s weekly update email to members of the Times of Israel Community. To receive these Editor’s Notes as they’re released, join the ToI Community here.
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