Main points of the policy's proposal about regulating the rental market – Tel Aviv Municipality

 

1. The Israeli rental market is in crisis: The increase in apartment prices along with lifestyle changes have led to a surge in the number of young people living in rented housing. The great demand for residential rental housing has led to an increase of 50% in rental costs since 2008 and has undermined the balance in the relations between tenants and landlords.

2. Israeli law is not tailored to the current needs of the rental market. The law about rental and borrowing acts is a Connie Law which does not fully address current needs since it has not changed since 1971. The OECD report in 2011 criticized the law and ranked the State of Israel second to last among the OECD countries in the index of supervision of the relation between tenants and landlords.

3. Tenants deal with a market outbreak, which is characterized by steep price increases, short-term contracts, conflicts with landlords and poor living conditions. These properties are particularly burdensome for young families of the middle class, who have difficulty in finding certainty and stability in their residence.

4. Worldwide, there are arrangements to stabilize the rents and to create a balance in the relations between the tenant and the landlord: Our research found that in free-market countries such as the USA, UK and Canada, there exists comprehensive arrangements that intervene in the rental market and grant municipalities the authority to stabilize rising rents and supervise the living conditions in rented apartments.

5. The policy proposal was formulated by the Tel Aviv – Yafo Municipality as an initiative of the Young Municipal Unit. Its goal is to promote legislation that will respond to the tenants' challenges and promote fair rental conditions in Israel.

6. The proposal can create a tangible and instant change for millions of middle-class Israelis who live in rented apartments. It can be implemented within a few months and most of the recommendations do not involve a significant budgetary burden. The recommendations focus on the current rental market and thus constitute a complementary process with the government's efforts to establish a moral rental market.

7. The main points of the proposal:

• Stabilization to rent's increases: rents and contract duration will be determined in the free market. For three years, rent will be updated once a year to a maximum amount set according to the CPI. Even in case the tenants' replacement, rents stabilization mechanism will remain in effect. At the end of this period, the landlord will be free to re-determine the rent. Local authorities will be empowered to activate this mechanism in their jurisdiction.

• Regulation in the relations between the tenant and the landlord: Establish tenant's and landlord's rights and obligations in the rental and borrowing law, on matters such as the repair of deficiencies in the apartment, debt advisory, rent related payments, guarantees, and behavior at  the end of the contract. Moreover, the regulation would it allow a quick evacuation procedure of the tenant if he committed a fundamental breach of the contract.

• Basic standards for an adequate apartment: Adequate conditions will be determined for a rented apartment, such as the presence of vents and water, and the municipality will have the authority to supervise apartments which do not meet the conditions.