Approximately 100 Israeli academics, students, social activists and public representatives attended the event "Housing Prices, Where Next?" organized by the Department of Public Administration and Policy and the Department of Management at the Guilford Glazer Faculty of Business and Management (GGFBM), Ben-Gurion University of the Negev.
The event opened with a presentation of research data by Prof. Miki Malul, Chair of the GGBM Department of Public Administration and Policy, Dr. Mosi Rosenboim, Chair of the GGBM Department of Management, and Prof. Amir Shoham, Temple University, USA. The study found that the rate of increase in housing prices in the last ten years is about 120%, compared with the rate of increase of up to 35% in the various costs that make up the cost of construction.
The main argument in the study is that the market is in a short-run equilibrium that does not match the long-term stable equilibrium in which there should be equality between the average change in housing prices and the change in production costs.
Therefore, in order to reach long-run equilibrium, housing prices must fall by at least 23% -39%.
Later, a panel discussion was held on possible reasons for the rise in housing prices:
MK Roy Folkman of the Kulanu faction suggested that one of the possible solutions to lowering the current price level is to develop a market for long-term and protected rental.
Ohad Mizrachi, one of the organizers of the tenants' committee in Israel, claimed that tenants are weakened in the face of the landlords' powers, and suggested that a platform be established that would educate and empower tenants, thus increasing their bargaining power vis-a-vis the landlords.
Teddy Neuwirth, one of the leaders of the Israel housing protest to lower prices, provided a number of explanations which affect housing prices: the massive involvement of investors in the housing market stemming from, among other things, the absence of investment alternatives in a low-interest environment, the change in contractors' construction-marketing mix in recent years. Neubert blames and the media's biased coverage failing to present the slowing process in demand as well as a trending pricing decreases, exaggerating their increases.
Eli Zippori, a senior analyst at the Globes newspaper, agreed to a certain extent to the claims made against the biased coverage. He also emphasized that there is structural tax discrimination in favor of investment in real estate, compared to other alternatives, which increases the industry's relative attractiveness.
Dr. Danny Ben-Shahar, head of the Alrov Institute for Real Estate Research at Tel Aviv University, spoke of the distancing of the periphery from Tel Aviv as a result of price changes in recent years. A solution to reduce these gaps is the development of transportation infrastructures that will increase the accessibility of the labor market in a nearby residential cell.
The main discussion revolved around the question of how government policy can change and affect housing prices.
One of the ideas that arose was the nationalization of the housing market. Most of the speakers thought that this was a mistake and was not appropriate for a democratic state with a capitalist market. At the same time, everyone agreed that the housing market was a market failure and that the government must intervene in a variety of ways.
In the questions and answers panel that took place in the second part, additional possible solutions were proposed to lower housing prices, such as imposing a tax on so-called investment-apartments (for rent), enforcing the urban building plan for residential purposes, as a result of preventing residential uses of apartments, such as renting residential buildings for offices or short rents such as AIR B & B, for municipalities to absorb new residents as a means of increasing the supply of housing in their regions.
