The state gave them land for free - but the fighters stayed away
A tender in Kfar Tavor intended to provide reservists with land at affordable prices has seen low turnout. Despite the state offering land for free, high development costs pushed the total price to over 1.8 million shekels, leading to the disqualification of several bids.
The dream of most Israelis lacking housing is to receive a house in a quiet moshav, with low equity and a mortgage that allows for a stable family life rather than a constant chase for money. Recently, the state has been marketing many such plots, but most are intended for reservists. Soon, even the 'Apartment at a Discount' tender will be 75% focused on reservists. Those who did not serve in the reserves will likely continue to dream of an apartment, as there is currently no real solution for housing at a sane price in Israel.
Kfar Tavor in the Lower Galilee recently offered an option for housing at a low price. The town has about 4,000 residents and many high-quality detached houses; recently, it was decided to classify land for reservists only.
Reviewing the details of the tender leads to the conclusion that it is not necessarily profitable, even though the state is distributing land almost for free. The reason lies in development expenses. As we have mentioned frequently, land prices in Israel Land Authority (ILA) tenders often differ significantly from market value due to development levies.
Many Israelis are migrating to the Golan area due to land costs. The state is distributing many plots at prices of 300,000–500,000 shekels, and in some settlements, there are claims of a lack of transparency and land being reserved for associates—a matter the ILA is fighting tooth and nail.
An ILA lottery, with results published last month, designated 78 housing units on 39 plots, but 10 of those plots were disqualified because the bids did not meet tender conditions. Consequently, out of 39 winners for land to build semi-detached cottages, about a quarter were not marketed to the public at all.
It is unclear why the bids were disqualified, but one thing is certain: when the public does not storm free land, there is usually a good reason. An average plot in the Kfar Tavor tender ranges between 690–800 square meters. Each semi-detached house would be built on an area of 350–400 square meters—a very nice size. But what is the price? A 695-square-meter plot for a semi-detached house costs 2.32 million shekels, excluding development expenses. Each side pays 1.16 million shekels, with discounts for fighters reaching about 210,000 shekels. Reservists receive a lower benefit, and those lacking housing buy the land at a price of just over a million shekels.
Development expenses are high, around 700,000 shekels. Our calculations show that land, including development, will cost 1.82 million shekels. Add construction costs of over two million shekels (based on 11,000 shekels per square meter, plus architect fees, upgrades, etc.), and a villa on the periphery will cost almost 4 million shekels. We found detached houses at lower prices in Kfar Tavor, so it is not certain the deal was profitable, which may explain the low response.
Another point worth mentioning: you pay for development and land now, and this money could have been invested for three years. If construction is delayed, the money sits without a return. The state may want to give land for free to fighters to encourage living on the periphery, but it is not certain it is truly committed to this.
At the end of this month, another, larger tender will be published for 262 detached houses in Yeruham. This is a major test for the state: do fighters and reservists really want land on the periphery at a discounted price, or is the discount too low?
