Israel State Comptroller Releases his Report on the Housing Crisis


shapiraState Comptroller Yosef Shapira did not spare the criticism in his comprehensive 294-page report released on Wednesday 6 Adar pertaining to the nation’s housing crisis. Shapira warns that if drastic actions are not implement, the current situation may lead to the elimination of Israel’s middle class and deliver a major blow to the economy. Despite statements from Prime Minister Binyamin Netanyahu and his coalition partners to the contrary, the report states the prime minister and his coalition did little to address the growing problem, which is blamed on poor planning, poor government and simply ignoring the needs of Israel’s middle class.

Perhaps a bit of relief for PM Netanyahu comes in the fact that the housing crisis began in 2008, during the tenure of Prime Minister Ehud Olmert, whose administration was no less incompetent. The report speaks of Olmert’s decision to curtail the Israel Lands Administration, a decision that was approved by the cabinet in 2007. It spoke of the Olmert administration’s lack of vision with its five-year streamlining plan.

However, the current prime minister is blamed for not stopping it and taking the actions required to reverse the trend. Shapira explains that the only actions taken by the Netanyahu administration remains by and large on paper and does not reach the implementation stage.

How Much Do Israelis Spend on Rent?

So one may ask just how much of one’s salary does one have to spend for rent? According to the report, 21% of an average salary went to paying rent back in 2008. That figure increased to 26% in 2012 and it now rapidly moving in on 30%. During the same time period, 2008-2013, housing prices increased by 55%. Rent however only increased by 30%. However it is significant to point out that monthly wages during the same time period did not increase in line with housing prices.

What is clear is that the cost of renting has increased around the country. In the Krayot, rentals have increased by 42% from 2008-2013. In the north, that figure stands at 30%, the Sharon region 49%, the south 43%, the center 47%, Gush Dan 47%, Haifa 41%, Tel Aviv 54%, Yerushalayim 40%, and on the average, 46%.

How Many Salaries Does it Cost to Buy an Apartment?

· Back in 2008, during the Olmert administration, one needed 103 monthly salaries to buy an apartment.

· That number increased to 137 by 2013.

· Today, that figure stands at 148 monthly salaries.

· For comparison sake, the average in the US and UK is 65 monthly salaries.

What Causes the Shortage?

If one takes the years between 2002 and 2012, there were shortage of 53,000 housing units between housing starts and the number of households. Shapira also stated there is a significant lack in a range of apartment sizes.

The apartments are getting larger for in 1980, 42% of apartment starts were three rooms of less (2 bedrooms and 1 living room) while in 2008, that number drops to 6%. This is a contributory factor to the increase in the cost of apartments- they are simply larger and therefore more expensive. He views the sharp reduction in the number of smaller apartments unfavorably.

After completing the portion of the report that slams Olmert, the report shifts to the summer of 2010, a year after the Netanyahu-led government was formed. He blames the prime minister of failing to realize and act to stop the rapidly increasing cost in housing.

The report cites the government red tape, foot-dragging, a lack of coordination between authorities and ministries, poor planning, a lack of implementation of government decision as some of the major causes for today’s worrisome reality.

Yahadut Hatorah was ready with its video response, stating the housing crisis is a key issue for the party amid a realization many chareidi couples are living in storage rooms, in storage rooms in underground garages and in garbage sheds.

(YWN – Israel Desk, Jerusalem)