An unexpectedly large increase in the cost-of-living index for April has left Israeli ministers scrambling this week to find ways to clamp down on spiraling costs in a sector largely responsible for the increase — housing.
The 2 percent rise in April’s cost-of-living index, announced last week by the Central Bureau of Statistics, was described by Jacob Frenkel, governor of the Bank of Israel, as “extremely worrisome.”
The announcement spurred Prime Minister Yitzhak Rabin to summon his housing and finance ministers and their senior aides to an emergency meeting on May 17 to examine the situation, particularly the effect of housing costs on annual inflation.
Soaring increases in home-purchase costs and in monthly rentals, which accounted for a full 40 percent of the April rise, have set red lights flashing in economists’ offices here.
The emergency meeting lasted four hours, with participants presenting their views of the situation and proposing suggestions for speeding up home construction and holding down building costs.
In view of the wide range of suggestions put forward, Rabin instructed Housing Minister Binyamin Ben-Eliezer to put together an interministerial team to prepare an agenda on the steps which must be taken to reduce housing costs.
The agenda was scheduled to form the basis for discussions that are expected to take up nearly an entire Cabinet meeting planned for this week.
The issues to be discussed include the release of land reserves for construction, speeding up planning and construction procedures, giving incentives to contractors to build quickly, fining contractors who fail to finish building projects on schedule and reducing construction costs.
The Archive of the Jewish Telegraphic Agency includes articles published from 1923 to 2008. Archive stories reflect the journalistic standards and practices of the time they were published.
