Thursday, May 18, 2017

Under Construction

Yair Assaf-Shapira
Jerusalem Institute for Policy Research

During 2015-2016 (January 2015 through June 2016, a total of 18 months) construction was started on 70,600 housing units in Israel (provisional data, new buildings only).

The scope of construction in a particular region or locality reflects a number of factors: policy considerations, such as an interest in directing home-buyers or renters to a certain area; means of development, such as approved building plans; and a demand for housing in that region or locality. It is difficult to separate these factors, but the bottom line is that extensive residential construction will likely contribute to demographic change: more residents will be able to remain in or move to the locality.

The cities that saw the most construction were Jerusalem (3,700 construction starts), Tel Aviv (3,300), Netanya (2,300), and Petah Tikva (2,200). These four cities, however, have large populations, and it is not certain that the additional construction will have a strong impact on the population size. So where is construction likely to have a significant impact in relation to population size?

During 2015 (January 2015 through June 2016), for every 1,000 residents of Israel, construction was started on 8.4 housing units. The major cities, which need large numbers of housing units in order to accommodate population growth, were unable to reach this figure. In Jerusalem 4.3 units were started for every 1,000 residents, and in cities with a population between 200,000 and 500,000 (Tel Aviv-Yafo, Haifa, Rishon LeZion, and Petah Tikva) 6.6 units were started. The figures were higher for cities with a population between 100,000 and 200,000 (such as Netanya, Be’er Sheva, and Holon), at 9.2, and for cities with a population between 50,000 and 100,000 (such as Kfar Saba, Herzliya, Hadera, and Modi’in), where construction was started on 8.7 units for every 1,000 residents.

Smaller localities saw even more new construction of housing units in relation to their population size. For example, in localities with a population between 10,000 and 20,000 (such as Tirat Karmel, Ariel, Hura, Tel Sheva, and Kafar Manda), 12.1 units were started, and in rural localities (moshavim, kibbutzim, and the like), 11.4 units were started for every 1,000 persons.

The population growth correlated with construction trends: in cities with a population above 200,000 it was below average, and in the smaller localities it was higher. The sharpest increase in population during 2015 was recorded in rural localities, at 2.9%. Jerusalem, by comparison, had a population growth of 1.9%. It should be noted that population growth depends on a number of factors, not only on construction.

Translation: Merav Datan

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