State introduces new regulations for eligibility for long-term rental housing

Good morning: The Ministry of Construction and Housing announced today that it has published new regulations for public comment, aimed at allocating long-term rental projects to those in need.

The regulations were developed following extensive research conducted by the Ministry, and they aim to update and streamline the eligibility process for long-term institutional rentals at reduced prices.

The first set of regulations, which focused on lottery guidelines, was published a few weeks ago, and the second set, addressing the income test, was recently released. Currently, developers who receive permits to establish projects for long-term rentals are required to rent approximately 20% of the units at a reduced price, which is around 20% lower than the market rate in the area. These rental units are allocated through lotteries. The new regulations will apply to housing units intended for long-term rental at reduced prices once they are approved.

Here are the primary highlights of the regulations:

• Income test for eligibility: The selection process for those eligible to receive a rental unit at a reduced price will now include an income test. This test will set a threshold above which individuals will not be considered eligible. Due to the high demand for long-term rental housing, especially at reduced prices, which are around 20% lower than the market rate, the addition of the income test ensures that those who truly need affordable housing will benefit from this opportunity.

• Standardized lottery rules for local authorities: The regulations also establish rules for local authorities to conduct fair and equal lotteries among eligible individuals. These rules include the presence of an inspector, specific registration times, and the publication of notices. The aim is to ensure that lotteries conducted by local authorities for long-term rental projects operate under uniform rules and are subject to supervision and control mechanisms.

Minister of Construction and Housing, Yitzhak Goldknopf, commented, "The new regulations we have published and will soon release ensure that affordable rental housing is provided to those who genuinely require it. It is not enough to create diverse housing solutions; we must ensure they meet the needs of the population they were designed for. We will continue to develop and respond to the needs of the public, while ensuring that these solutions serve their intended purpose.

There is no one-size-fits-all housing solution, but rather a range of options that can cater to different individuals, and this is another tool that the Ministry offers to the citizens of our country."

Yehuda Morgenstern, Director General of the Ministry of Construction and Housing, added, "Promoting the institutional rental market and increasing its accessibility to a wider population has the potential to impact the entire rental market, which has seen significant fluctuations in recent times. We are closely monitoring the housing market, particularly during the current emergency situation, to ensure that all aspects of the rental market continue to function optimally."