ABSTRACT
During the period 1990–1995 the state of Israel had to provide housing solutions for some 680,000 of immigrants who had arrived without any capital. For a state with a population of 4.5 million (in 1989) this has comprised a substantial effort which, in retrospective, has been successfully met. The process required the solution of a series of problems which related to the nature of the immigration and also to the economic situation, availability of land and infrastructure etc. at that time in Israel.
The measures applied varied in respond to changing conditions. During the first years 1990–1992 the emphasis was on creating a large stock of housing, with massive government involvement and rent subsidy being the main tool on the demand side. In 1993 the supply of housing became the private sector’s task and the government supported the demand with soft mortgage loans. The provision of planned land by the government became its main tool on the supply side.
The housing policy and its implementation has proven successful in providing housing solutions for most of the immigrants without almost creating slums, and in expediting integration into the existing population at reasonable cost. Furthermore, the continuous demand for housing has triggered a substantial growth in the Israeli economy. The Gross Domestic Product doubled from US$43 billion in 1989 to US$87 billion in 1995 and the per capita GDP grew from US$10,400 to US$15,500.
During the process various measures have been applied and there are some conclusions to be drawn and some mistakes to be avoided:
Government must take most of the risks at the initial stages of a huge national effort to provide mass housing.
It calls for mobilisation of efforts and granting extended authority to a single body.
In some case tax breaks can provide fast solutions at low cost.
153Private contractors respond quickly and effectively to financial incentives. This rule does not necessarily apply to public sector suppliers of infrastructure and services.
Infrastructure must be given priority and a larger share in its execution given to the private sector.
A large stock of planned land should be prepared in advance in order to deal effectively with a sudden rise in housing demand.
Temporary housing solutions (like mobile homes) should be avoided. It is economically unviable and socially unworthy.
Subsidising directly the eligible ones — ‘soft loans’ — is in most cases the most cost effective and socially worthy measure.
