The government made what it called its final housing cuts this week, announcing the cancelation of another 4,000 units, this time outside the administered territories.
According to the Finance Ministry, the new freeze brings up to 11,981 the number of housing units that will not be built, 5,364 of them in the territories.
According to these latest figures, 1,400 fewer units in the territories are being canceled than the government had announced in its initial decision last week.
The construction freeze is being presented as part of the government’s declared policy to divert funds from the building industry to infrastructure projects within the Green Line, Israel’s pre-1967 border that does not include the territories.
According to the Treasury, the building freeze will save the state some $650 million for next year’s budget. The Treasury intends to spend the funds to develop infrastructure, roads and industrial zones.
“This will be the real alternative to the building industry and the real alternative to create new jobs,” said Finance Minister Avraham Shohat.
As a general rule, the government has not touched housing units already under construction. But Housing Minister Binyamin Ben-Eliezer, belying the “finality” of this week’s announcement, said Monday that an additional 2,000 units in the territories, still at the initial stages of construction, may be canceled if there is no further demand for housing there.
A sharp drop in demand for housing in the territories has been reported by real estate agents since the new Labor government took office. They said apartment prices have dropped by at least 10 percent.
Construction continues on some 8,200 housing units in the territories. Many of them have no prospective buyers.
According to the Treasury, the state will honor the previous government’s commitments to building contractors.
This will involve buying some 24,000 housing units if they remain unsold by the end of this year. This will cost some $40 million.
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