Jerusalem Mayor Barkat Remains Determined to Lower Housing Costs for Young Couples

Jerusalem Mayor Nir Barkat remains committed to creating affordable housing for the young, young couples in particular, stating “this is the beginning of a revolution. Jerusalem is a pioneering city in Israel in developing a model to address affordable housing that is formulated on similar models throughout the world. The plan offers affordable housing solutions for young families – a segment of the population with great potential to contribute to the city. We have an interest in making sure that the young population stays in Jerusalem as they are the oxygen for Jerusalem’s future. I have no doubt that this revolution; together with cultural, educational, and economic reforms that we have initiated will have a prominent role in halting the negative migration from Jerusalem.”

Principles of the Plan:
As part of the new plan, the municipality will demand that contractors apply the affordable housing policy to each construction project brought to the Municipality for approval, starting from date of the City Council’s approval. In a construction (or addition) project proposing more than 20 residential units and more than 2000 sq. meters, the municipality will demand that the price of 20% of the residential units in a size of up to 100 sq. meters (maximal area), will be 20% lower than the market value of corresponding apartments (according to an assessment, the apartments will be allocated to eligible individuals based on criteria approved by the municipality, such as at least one of the spouses will be under the age of 41, they do not own an apartment, etc). In addition, a defense mechanism will ensure that the apartments remain affordable over the years.

Plan’s Implications:
The plan embodies economic implications, both for private land and public land, and will be expressed by offering buyers a benefit in an average amount of NIS 200-300 thousand in purchasing an apartment. The new plan will be implemented throughout the city and will include physical and economic criteria, as well as eligibility procedures and management and supervision regulations for the supply of affordable housing. The affordable housing demand will be homogenous – applying to all areas of the city and mandatory in each construction project that includes adding building rights that has yet to be deposited. The affordable housing demand will be defined in a transparent manner throughout the city.

Mr. Shmulik Levi, Chairman of the Jerusalem Contractors Association, said that the city’s contractors association praises the plan: “We work in collaboration with the Municipality and understand the importance of a plan that will allow us to increase the number of residential units and offer young couples the chance to continue to live in the capital”.

Aiming to promote the plan, Mayor Barkat initiated the establishment of a Unit for Promoting Urban Renewal and Affordable Housing in the Jerusalem Development Authority, which is working together with the Municipality’s Division for Strategic Policy and Planning. The unit is working with a budget of one million shekels and is developing practical tools for planning and marketing affordable apartments for young populations in the city, as well as developing models of prices for affordable rental apartments, starting from NIS 2,200. The unit has performed economic analyses, formulated a model for affordable housing including eligibility, determined the physical size of the housing, price, apartment allocation, management and supervision of the process, conducts deliberations with the Contractors Association and more.

It is noted that the plan is one measure from a selection of programs that the city plans to adopt in order to generate affordable apartments. This week, the plan will be filed for the approval of the Local Planning Committee and thereafter, for the City Council’s approval. In addition, it is important to mention that the plan is intended to supplement additional housing plans for the city’s entire population and is not meant to be a replacement.