Housing crisis trumps security in looming Israeli vote

JERUSALEM – Agence France-Presse

AFP Photo

Despite Benjamin Netanyahu’s best efforts to flag security as the biggest issue keeping Israelis awake at night, the reality is far more mundane. For most voters, it is the price of housing that matters.

Voters head to the polls on March 17 for Israel’s second election in just over two years, with Netanyahu -- a security hawk and economic rightwinger -- seeking a third consecutive term.

Netanyahu has based his reelection campaign solidly on security issues, namely his bid to derail an international effort to reach a deal with Iran that he says would pose a threat to Israel’s existence.

But centrist and left-leaning parties, who recent polls show have jumped ahead of Netanyahu’s Likud party, have focused instead on bread-and-butter issues like housing and the rising cost of living.
For many voters, their message is hitting home.

“The housing problem is the most significant issue (in the election),” said Eitan Ben Eliezer, who lives with his wife Tal and their two small children in a rented flat on the outskirts of Jerusalem.

“Even if you work and manage to save, say, $750 to $1,000 a month, even that wouldn’t be enough for a down payment on a house,” he said.

If Netanyahu is vulnerable on any social issue, analysts say, it is housing.

Since taking office in 2009, the Israeli leader has failed to curb soaring house prices, which jumped by 55 percent between 2008 and 2013, according to figures in a damning report released last month by the state comptroller’s office.

Last year prices rose another five percent, official figures show.

The average Israeli now needs the equivalent of 148 months’ salary to buy a home, compared with 76 in France, 66 in the United States and 64 in Britain.

The cost of a four-room apartment in Tel Aviv currently stands at around $700,000 (660,000 euros), $470,000 in Jerusalem and $350,000 in the northern port city of Haifa.

The average salary in Israel is around $2,270 a month.

The growing inability of young Israelis to get a foot on the property ladder triggered a wave of demonstrations in the summer of 2011 when hundreds of thousands took to the streets in the biggest social protest in Israel’s history.

Nearly four years on, things have only got worse.

Tal Ben Eliezer said that despite both she and her husband working -- he holds down four jobs -- there is no way they can afford to buy a property in their community.

“It’s just not possible. I would like to live here, where we rent, but the prices are sky high,” said Tal, 31, who works as a research assistant at the Hebrew University of Jerusalem.

“There’s no chance, even if I saved until I was 70,” she said.        

“If your parents don’t help, it’s not even possible to think of buying a house,” her husband Eitan said.

Eran Feitelson, a housing expert at the Hebrew University of Jerusalem, said the crisis is the result of low interest rates that pushed investors towards the housing market.

Last month, the Bank of Israel lowered its benchmark interest rate to 0.1 percent, the lowest in Israel’s history.

“In 2008, a lot of money went into the housing market as a result of the fall in interest rates because of the global crisis,” Feitelson said.

“With mortgages also cheaper, more households were able to enter the market and the combination caused the prices to jump.”

Even before the housing crisis took hold, Israel had already been flagged as one of the countries with the highest income inequality in the Organization for Economic Cooperation and Development (OECD).

Rents have also been steadily rising.

According to the state comptroller’s report, which slammed Netanyahu’s government for doing nothing to solve the housing crisis, rents increased by 30 percent between 2008 and 2013, hitting 470,000 of Israel’s poorest households.

The center-left Zionist Union -- which recent polls show likely to win more seats than Netanyahu’s Likud -- has made the crisis a central issue of its campaign, vowing “affordable housing for all Israel’s citizens.”

The centrist Yesh Atid party and the newly formed Kulanu faction of former Likud minister Moshe Kahlon have also focused on housing as a key issue.

But Netanyahu has made little of the crisis in his campaign, pledging only that if re-elected he would “act” to resolve some of the problems listed in the critical state comptroller’s report.