Prime Minister Binyamin Netanyahu and former Finance Minister Yair Lapid each blamed the other Sunday for the high cost of housing in Israel. The sniping came as the State Comptroller was expected to decide this week on when to release a report that will assign responsibility to both men – as well as to ex-prime minister Ehud Olmert and members of his government – for the rise of as much as 70% in real estate values in the past decade.
In the new report, Comptroller Yosef Shapira will describe what he believes are the reasons homes in Israel are so expensive. According to business daily Globes, Shapira will point his finger directly in the direction of Netanyahu, claiming that it was the policies of his government that jumped real estate prices by tens of percentage points since 2009, when Netanyahu beat out Kadima and Labor to form a government. Also coming in for criticism will be Olmert, who the report says concentrated too much on reducing prices and bringing young couples to the periphery, while failing to encourage developers to build affordable housing in the center of the country.
Netanyahu is likely to use that charge against the Olmert government to defend himself from the report’s findings, the paper said. However, the report will directly state that it is Netanyahu who was responsible for failing to market enough parcels for construction, creating a housing shortage that has caused prices to rise almost incessantly since 2008. The report will say that the government did not observe its own schedule for releasing land and auctioning off parcels, which would have helped reduce prices.
In Sunday’s exchange, Lapid said to a crowd in Rosh Ha’ayin that Netanyahu, who was Prime Minister in six of the past nine years, bore the main responsibility for what happened to the real estate market; he, on the other hand, was Finance Minister for barely a year and a half. Lapid said that had his zero-VAT housing plan gone into effect, prices on homes would have been cut by 18% – but the Prime Minister stymied that, too.
In a statement, Netanyahu responded by saying that Lapid was head of the Housing Cabinet and was placed in charge of it specifically to develop ways to lower costs. Lapid was opposed to numerous ideas, such as the “Target Price” plan, which sought to keep construction costs low, preferring his own Zero-VAT plan – which nearly all economists slammed. Netanyahu added that Lapid prevented a deal to move IDF bases to the Negev, which will open up large plots of land in the center of the country for construction, with supply meeting demand and market forces lowering the cost of new homes.
The report had been originally scheduled to be released in November, but was postponed several times as Shapira worked to complete it. Currently, the report’s release date is March 3, but it is unclear if that schedule will be observed as well.
