How IDF bases could become affordable housing

May 15th, 2013 | By | Category: housing

A bill proposed by one of the leaders of the 2011 social-justice protests, now a Knesset lawmaker, poses a serious alternative to the Netanyahu government’s ineffectual housing policies. 

Nearly two years after the social-justice protests of 2011, Israel’s government has failed to make any serious attempt to bring down the cost of housing in the country. Despite a series of laws, policies and reforms put forward in the wake of that summer’s demonstrations, the cost of housing in Israel continues to rise, especially in the center of the country.

During Benjamin Netanyhu’s terms in office, the government has consistently refused to consider legal and regulatory tools, such as rent control and mixed-income housing, which are commonly used in Western countries to moderate housing costs in big cities – let alone more experimental ideas such as micro-lofts. Instead, it has chosen to remain inside the box of free-market orthodoxy, which has proven ineffective.

However, a bill put together by one of the leaders of the 2011 protests, now a member of Knesset, could offer a serious alternative to the government’s impractical and ineffectual policies. MK Stav Shaffir (Labor) has proposed a piece of legislation that would create thousands of affordable housing units in the center of the country, on land currently occupied by IDF bases.

The bases, which are already slated to be transferred to southern Israel over the coming decade or so, sit on huge pieces of land inside urban areas (they include the well-known bases at Tel Hashomer, Tzrifin, Glilot and parts of the Kirya in Tel Aviv). Estimates are that some 30,000 apartments could be built on the land that becomes available.

Under Shaffir’s bill, half of these apartments would be sold by the developers at market prices, while 45% would become rent-controlled units, leased to middle-class tenants on multi-year contracts. Tenants would have to meet certain criteria (they would have to be working people, with incomes that fall within a certain range, who do not already own an apartment), and would be chosen by lottery.

Shaffir’s bill is revolutionary in that it defines, for the first time in Israeli law, the term “affordable housing” as rent-controlled apartments whose cost does not exceed a certain percentage of a household’s income (in this case 30%). This would bring Israel in line with most Western countries, which define affordable housing this way. Until now, Israel’s government has taken the unique position that small, market-rate rental units are “affordable housing.”

The bill envisions these new neighborhoods as mixed-income districts, in which public housing tenants, middle-income groups (such as students and young families) and better-off people live together in the same neighborhoods and on the same streets. While mixed-income districts are also a staple of affordable housing programs in Western cities, in Israel most new neighborhoods (and sometimes entire cities – think: Modi’in) are designed for a homogeneous population.

Although the bill does not specify, all of the rent-controlled units would presumably be built and managed by private companies, under government oversight. The bill would also require the government to explore a number of financial and regulatory moves meant to lower the price of construction in these projects, including tax breaks and relaxing parking minimums (inflexible regulations requiring developers to build costly underground parking garages are yet another factor pushing up the cost of apartments).

In another precedent-setting move, the bill would require that 5% of the apartments built in the new neighborhoods, some 1,500 units, be managed by state agencies as public housing for low-income families. While that number may sound insignificant considering the growing number of Israelis living in poverty, it would be the first new public housing built by the state in a generation, and thus a major turning point in Israeli housing policy.

Could such a bill actually pass?

The genius of the bill is that it harnesses the momentum of a process that is already well underway. Both the government and the army are firmly behind the plan to move IDF bases to the Negev. The land is owned by the state, not private citizens, and there is already a well-defined timetable. According to financial newspaper Calcalist, the government has already committed in principle to allocating 25% of the new projects to affordable housing – although, as mentioned above, that “affordable housing” was defined as small, market-rate rental units.

Shaffir’s bill would essentialy tweak the existing policy to expand the amount of affordable housing, while forcing the government to address the actual cost of those units, giving the move teeth.

The Israel Lands Authority, which manages the land on behalf of the state, and the Finance Ministry remain deeply committed to a neoliberal approach that rejects such government intervention, and will probably be opposed. The local governments in whose jurisdiction the bases fall will probably lobby for less housing (especially if it’s not large, luxury apartments) and more office parks and shopping centers, which pay higher municipal tax rates.

Netanyahu will probably oppose the idea as well, as he has every other idea for a housing policy that is not based on pure free-market orthodoxy, although Yair Lapid, who campaigned on promises to help the middle class and is now set to head a cabinet-level panel on housing, will have a harder time opposing it.

But the bill’s biggest opponent will probably be the defense establishment. Under its agreements with the government, the defense establishment is planning on using the billions of shekels it expects to rake in by turning its old bases into real estate to finance construction of a string of new bases in the Negev. Adding an element of real affordable housing to the projects would reduce the profits from the deals, and the defense establishment knows how to resist attempts by the government to take resources away from it.

If nothing else, Shaffir’s ideas could help introduce new ideas into the official discourse on housing policy in Israel. Until now the decision-makers shaping the debate on housing policy have almost uniformly fit the description of the older, well-off, conservative white male politician. Unlike them, Shaffir is a young, middle-class, progressive woman who lives in a rented apartment in Jaffa, with roommates.

As such, she represents a more open and participatory form of politics, and a post-neoliberal socioeconomic perspective in which government intervention in the housing market (and in the economy in general) is desirable, not anathema – all of which is much more in line with the demands of the social-justice movement than anything the Netanyahu governments have managed to come up with to date.

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