Calcalist, Amitay Gazit, 11.11.2020
The Ministry of Housing and the Government Companies Authority are working to merge an apartment company with a landlord and a city company, according to a draft resolution that will soon be submitted to the government and reached Calcalist. The move is expected to create competition in the field of planning and development of cities and neighborhoods, which is controlled by the Israel Land Authority (RMI).monopoly The largest land holding 92% of state land.
According to the plan, an apartment for rent - the government company established in 2013 in the days of former Finance Minister Yair Lapid with a promise to build 150,000 apartments for rent "within a decade" - will be liquidated and all its assets and liabilities transferred to a city company. According to initial estimates, the savings in headquarters costs will reach NIS 5 million a year, but more importantly: the government estimates that the capabilities and powers of an apartment to rent will allow the new city company to locate state-owned or private land, promote planning, develop and market it while creating An important competition for Rami.
A city company, established in the 1970s and subordinate to the Ministry of Housing, has so far served solely as an executive arm of the government to build infrastructure for new neighborhoods. The company operated specifically in national priority areas and the periphery and did not rely on a state budget because at the end of the development work it handed over the land in exchange for payment to the occupants or contractors. One week ago, Yair Tal, CEO of Dira Lehashikir, announced that he would soon end his position at the company, less than two years since his appointment.
Leading the decision on the merger are the director general of the Ministry of Housing, Yair Pines, and the director general of the Companies Authority, Yanki Quint, who is currently the candidate for the position of director of the Israel Land Authority.
To date, the development of neighborhoods on land marketed and planned by RMI has almost always been carried out by local authorities, and these have often faced difficulties and refused to develop new neighborhoods for budget or other reasons, and have actually paralyzed RMI. The government now hopes that it will be possible to bypass the local authorities, and operate the new city company wherever the municipalities will delay the development of the neighborhoods. "The merged company will be able to plan a complete development plan for a new neighborhood, and build all the public buildings itself after their construction by the local authority, which often delays the development of public infrastructure for a long time beyond populating the new neighborhood," the decision-makers said.
Right: The Director General of the Ministry of Housing, Yair Pines, and the head of the Government Companies Authority, Yankee Quint Photo: Basmat Ivy, Amit Shaal
To the company of cities working capital Positive, and as of the end of 2019 was in her possession EquityIn the amount of NIS 139 million. This is despite the fact that it distributes a dividend to the state at a rate of 50% of the net profit. In 2019, the annual scope of its activity was estimated at NIS 500 million, and last year it received permits from the Ministry of Housing for the development of the locality of Hiran, a neighborhood in the ridges, in Elad and more. Cities have no authority to prepare city building plans (Master PlanF) in the area not provided to it by the Ministry of Housing or RMI.
On the other hand, an apartment for rent is authorized to initiate on state land and even on privately owned land. She has experience in locating land suitable for residential construction, promoting city building plans and marketing the complexes for the construction of rental housing complexes. To date, the company has promoted about 20 long-term rental projects, each of which includes hundreds of apartments. Although a rental apartment will be liquidated, the purpose for which it was built will continue to exist. Under the decision-makers' proposal, the merger would make the new company "the government's home for development and rental."
Cities have independent sources of funding, which should allow it to expand its investments in rental housing in a short time or leverage its assets and obtain foreign financing through them.