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Wednesday, March 20, 2013 

Haredis exploited state housing assistance for sake of their lifestyle

This article tells how former housing minister Ariel Attias from Shas exploited the real estate industry so that the Haredi community could keep up their insular lifestyle at the expense of the the rest of the population:
Under the Mechir Lamishtaken program, the state offers relatively cheap housing via a sophisticated system involving a tender. The winning contractor commits to selling the apartments at the lowest price. [...]

For reasons that are now known and far more transparent, Atias forcibly prevented the approval of the criterion of using earning capacity to its fullest extent as a condition of eligibility, or even of preference, both for Mechir Lamishtaken and the rental-housing program. By doing so, he left the way open for Haredi families, where the household members do not work, to continue receiving housing assistance from the state.

The results of Atias’s decision were almost immediate. One of the first tenders of the Mechir Lamishtaken program was issued in the West Bank Haredi city of Betar Ilit, where 211 apartments were sold at estimated discounts of NIS 500,000 to NIS 700,000 from the market price. By comparison, the discounts available in the secular city of Nesher were about NIS 150,000 less than market price. There is no doubt that the Haredi public benefited from the fact that their minister was taking care of them, ensuring that they continue to receive inexpensive housing from the state.

Mechir Lamishtaken is one blatant illustration of the way Israeli politics has helped the Haredim maintain themselves without working. The cheaper mortgage offered by the Housing Ministry, which became particularly attractive just this year when its interest rates were lowered, is given only to those who have been married a certain number of years, have a certain number of children and a certain number of aunts and uncles on both parents’ sides. In other words, only people whose families have been large for at least two generations meet the criteria. One can easily guess for which population the benefit is intended.

Haredim also receive sizable apartment-maintenance benefits. They can get a discount of up to 90 percent from municipal tax (arnona), amounting to as much as NIS 4,000 per year. This is a benefit for which families with particularly low incomes are eligible – but the income level has to be so low that even if one member works at minimum wage, the family loses eligibility unless it has seven people or more. [...]

In practice, this is a well-oiled mechanism of exploiting the assistance provided by the state – which is funded, of course, by Israeli taxpayers – so that the Haredim can continue not working and not paying taxes. This mechanism allows the Haredim to maintain their unique lifestyle: While they have almost no income and are indeed very poor, at the same time they have very few expenses because their poverty enables them to receive state assistance.

The Haredim can go on like this for years. Their poverty does not disturb them as long as they and their families can survive. The one that cannot go on like this for years is the State of Israel, whose taxpayers are going to collapse under the burden of the allowances and benefits provided to all those who do not work. The taxpayers’ solidarity with the state will also erode as they see how their work is being exploited to fund the non-working lifestyle of others.
I wonder if these kind of policy mechanisms have enabled them to buy luxury and sport cars too? I ask that because I've seen fancy cars a couple of times in Haredi neighborhoods, including a Chevy Corvette. In any case, no, these kind of housing policies cannot be allowed to continue at the expense of taxpayers in Israel so the whole Mechir Lamishtaken program is probably better off being scrapped.

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  • I'm Avi Green
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