Even though housing prices climbed some 36% in inflation-adjusted terms from 2008 to 2010 and the public was spending more and more for housing,“only in July 2010, over a year and a half after its establishment, did the 32nd government headed by Mr. Benjamin Netanyahu identify the need to halt the steep rise in housing prices, and decided there was a need to establish a housing policy to lower home prices while putting an emphasis on homes for young people (families and singles) who were buying their first home,” wrote State Comptroller Joseph Shapira in his special report on the housing crisis released Wednesday afternoon. “Nonetheless, housing prices continued to rise in the years 2011 and 2012, though in a more moderate manner,” he said.
Shapira details a long list of failures in the functioning of the last three Israeli governments: Starting with Ehud Olmert’s government, which Shapira says laid the foundations for the start of the crisis, to Netanyahu’s cabinet, which Shapira said acted slowly, did little and did not properly carry out most of the recommendations in the Trajtenberg report on lowering the cost of living — and all in all failed completely in the handling of the housing crisis.
The main step taken by Netanyahu’s cabinet, when Yuval Steinitz was finance minister and Ariel Atias was housing minister, in the wake of the social protests of the summer of 2011, was the establishment of national housing committees, which were meant to bring about a massive increase in the number of homes built. These committees turned out to be ineffective and few new housing units were built as a result.
The Comptroller’s criticism of Netanyahu’s second government, the 33rd, in which Yair Lapid served as finance minister and Uri Ariel as housing minister — and which fell in December 2014 — was only partial, which is a shame, since it makes the report less relevant and up to date. But the report emphasizes the lack of any policies, by this government as well, for creating affordable housing, and a focus on the initiative for creating a long-term rental housing market, which so far has produced very little — and at an astronomical cost.
One of the major reasons for this continued failure, according to the Comptroller’s report, is a total lack of any overall long-term government policy. “Only in July 2013 did the cabinet decide to appoint the housing minister ‘to lead the formulation of a long term housing policy’ — a task which was not yet implemented by the time the [State Comptroller’s] report was completed.”