Housing needs, choice and responsibility as three concepts to understand the role of housing markets and government intervention in Israel

The primary aim of this study is to analyse and evaluate the transformation of the concepts: housing needs, choice, and responsibility, resulting from the privatization policies introduced in Israel in the early 1990s. Israel is a country that absorbs “Olim” (Jewish Immigration). With the establishment of the State, the Jewish population was estimated at 600,000. Over the last 70 years, the Jewish population has grown to 6.5 million. Together with minority populations of Arabs, Druze, and Circassians, the total population is now estimated at 8.7 million citizens. Most housing properties in Israel, a total of 93%, are publicly owned and managed by the government, with 7% being privately owned. In general, the evolution of the housing market in Israel can be divided into two main periods: the first period between 1948-1990, and the second period from the early 1990s up to the present. The first period begins with the establishment of the State of Israel and is characterized by the struggle to absorb large immigration waves of Jews from all over the world, and integrate them into the Israeli society. In this respect, housing provided a particular challenge. To cope with the increased demand for housing, the State of Israel began building public housing. In the first decade, more than 200,000 permanent housing units and 60,000 temporary housing units consisting of small and relatively light construction huts were built. The main concern of the state was to provide immediate and reasonable shelter, without fulfilling all the needs and wishes of the new immigrants. Thus, the apartments built were small and not suitable for numerous family members. Moreover, the planned dispersal of immigrants throughout Israel, as part of the government policy to settle the land, did not take into consideration the immigrants’ opinions. Finally, the public housing policy in Israel was motivated by political considerations, such as creating Jewish territorial contiguity, populating uninhibited areas in the periphery and Research Papers in Economics and Finance 2 (3) 2017