to each according to his needs


Ninety-three percent of the land in Israel is owned by the government. In order to build new projects and developments here it is necessary for the government to release land into the private market by selling it at auction. The needless and duplicative administrative procedures accompanying this process are overseen by layers of unaccountable bureaucrats far more interested in justifying their own existence than in providing value to the public. Inexplicable and infuriating bureaucratic delays are simply taken for granted as an expected part of the process.

We are fortunate that our economy is strong and unemployment is low. The crisis in housing prices is an unintended consequence of our success. Unfortunately our leaders are politically incapable of dismantling the Tammany Hall patronage system upon which the bureaucratic monstrosity if founded. Their solution to the housing crisis is more regulation and bureaucracy. Because Soviet central planning was such a great success.

The "buyer fixed-price" program and "target price" program are the results of this thought process. The government exploits its near-monopoly position as national landlord to coerce developers into selling housing units at below market prices. Individuals and couples who meet government criteria may then enter a lottery for the right to purchase a discounted unit. By definition, the supply of below-market price units will not meet demand. The housing units built pursuant to these programs must meet specified criteria. The buyer and seller are prohibited by law from contracting for a variation in price or specifications. The flat must be delivered complete consistent with government specs without regard for the preference of the consumer.

The following article in Globes describes the increased costs associated with making modifications to your government-subsidized and designed flat:

http://www.globes.co.il/news/article.aspx?did=1001111205

Since the consumer is not free to purchase an upgrade, if she wants a bigger, nicer kitchen she can't simply build to taste as one would in a free-market transaction. Rather she must take delivery of the completed flat and pay extra costs to demolish the old kitchen and build anew. The government mandates a 4.5 meter kitchen whereas most Israeli consumers prefer an 8-meter kitchen. (I'm not sure exactly what that means. We don't describe our kitchens like this in the U.S.) Big brother's specs don't provide space for a built-in oven. You've got to rearrange the design provided by our socialist overlords to make that happen. And heaven forbid you want to add or move electrical outlets or water fixtures.

Apparently the doors, window blinds, toilets and showers are built to a lower standard not widely seen in this country since the 1980s. Are you shomer kashrut? Would you like two sinks? Tough cookies. Feel free to rip out the standard product and pay for that yourself. And how about handicapped accommodations? Not on the menu. Apparently these specs were drawn up by able-bodied secular folks.

Remember, these flats were built under coercion. If a developer wants to build a new high-end residential project on raw land he will be awarded the tender only upon agreeing to also build a certain portion of discounted units built to minimum standards which must be sold at below-market rates to qualified purchasers, primarily young couples purchasing their first home. Because he is forced to sell at a discount he has incentive to provide materials and workmanship sufficient only barely to meet the government's minimum standard. The first units built pursuant to these programs have yet to be delivered and occupied. Stay tuned for reports of substandard construction and code violations which will likely be discovered once the lucky winners of the discounted-price lottery start moving in.

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