Today’s election in Israel could, amazingly, spell the downfall of Prime Minister Benjamin Netanyahu, a man who not so long ago commanded 80 percent approval rating thanks to his military adventures. And if this is the end for Bibi, as Slate’s Joshua Keating wrote Monday, the result will likely have more to do with home prices, of all things, than the way he has approached the national security issues we in the foreign press tend to focus on.
Israel, it seems, has been suffering from a housing crisis, with real-estate prices skyrocketing well past affordability for most families. This graph, posted by BloombergBusiness’ Peter Coy, sums up the issue. From their nadir in 2007 through July 2013, the cost of a home jumped 83 percent, according to the Taub Center for Social Policy Studies in Israel.
Now, in the United States, that might sound like a pleasant problem to have. After all, Americans were happy enough during our housing boom, which, if anything, was probably more severe. But the U.S. bubble was fueled by easy credit and resulted in a construction surge that created lots of jobs. In Israel, the situation is different. Thanks to tight lending standards, it’s exceedingly difficult for young couples to make a down payment. Meanwhile, due to an ungodly amount of government red tape, the Taub Center says it takes 13 years on average for developers to complete a building project. This has led to a housing shortage that, while putting home ownership out of reach for families, also drove up rents 30 percent in five years while incomes stayed basically flat. If that weren’t bad enough, a recent report by the State Comptroller’s Office suggested that, while Israeli officials understood there were problems in the housing market, they dragged their feet on addressing them.
So, in short, Netanyahu’s problem today is that not every Israeli wants to live in a settlement. Who knew?