National land ownership and housing prices in Israel

Cite As:
Alterman Rachelle, Kenett Ron, Salinger Eyal. National land ownership and housing prices in Israel Haifa Israel: Samuel Neaman Institute, 2020.

Despite the central place that Israel’s housing policy has taken since the 2011 mass protests, and the various policy alternatives that have been considered, one issue has never been placed for public awareness and debate: The fact that Israel – alone among all the members of the OECD – has a land tenure system with overwhelming dominance of  national ownership. Furthermore, national land is managed and released to the development market through a single, central national authority.  A question never addressed in public discourse is whether, or how, national land ownership affects Israel’s very high housing prices. Is it possible that the very fact of national ownership is causing housing prices to rise, rather than lowering them? At the time this research report is published, the ministries responsible for planning, housing, and national land have been reshuffled. There may thus be a modest window crack for rethinking. We submit this research report to the decision-makers and the general public.

The direct research question of this  probe is: How does the Israel Land Authority’s policies for land release by means of competitive tenders affect the cost of land for housing? At the core  of this report are the findings of an empirical analysis, the first of its kind, which tries to crack this elusive question. To this end, thousands of residential tenders have been analyzed. By means of statistical tools, we attempt to identify the likely impact of the tender system on housing prices, while controlling for a set of selected variables. However, this research is just a pilot for analyzing many related questions through application of more empirical methods of analysis.  In our search for funding sources to extend this research as initially planned, we have been disappointed time and again. Is the “elephant in the room” of Israel’s housing policy and prices destined to remain invisible, despite our efforts?

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