Land for affordable housing - urban renewal complexes and markets of the Israel Land Authority
The basic premise at the heart of the proposal for the establishment of the Authority for Urban Renewal and Affordable Housing is that in order to address the issue of housing and property poverty in Israel, national property and planning arrangements must be ensured through legislation to grant property and construction rights for urban renewal and housing in up to 187 neighborhoods (spanning an area of approximately 150,000 dunams (1/4 acre)) that will be declared as urban renewal and affordable housing complexes. In addition, under the proposed legislation, state-owned land designated for residential construction will not be marketed, and urban renewal plans will not be approved unless it is guaranteed that10%-20% of the apartments in the proposed plan, as needed at the time, will be allocated for Affordable housing. This way, a broad inventory of housing will be created in Israel, greatly benefiting the Israeli economy.
The Economic Model
Funding for an apartment will be derived from its total price, determined by construction costs and land prices. Construction costs include the price of construction(which is fixed and not location-dependent) per square meter multiplied by the apartment's area (between 66 to 75 square meters) plus associated costs (such as taxes, infrastructure, planning, and management). The cost of land will be calculated based on the average price of land for a housing unit as determined in approved tenders for the sale of land for full construction by the Israel Land Authority in the ten years preceding the proposed plan. In cities in the northern and southern districts for which there is insufficient data, the calculation will be based on the average price of land for a housing unit in the district (excluding Haifa in the north and Be'er Sheva in the south). In cities in the central district, the price will be determined based on data from private transactions in that city from the State Revenue Administration and the Tax Authority.