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Housing Solutions Part 2: Young Couples and Families

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legal warning: The information here should not be understood legally as financial advice. If you believe anything on this site is in error, please contact me. I am always open to corrections, new ideas, and new opinions...

A few weeks before I got married, my wife found a small place for us to live in Petah Tikvah.  Upon seeing it, I remarked that this small apartment, all of 35 meters, would be okay for the first year of our marriage, but then we’d surely move.  Four years later I not only still live in the same apartment, now with a child as well, but also pay ₪ 500 more per month than when I started.

The housing crisis is real.  Almost everyone I know who does not own his or her home is paying between 40% – 60% of his or her household’s take home pay for either rent or a mortgage.  This is before paying utilities, transportation, clothes and small unexpected expenses.  Oh, and did I mention that these people need to eat? 

I am not talking about people who are wasting money on unnecessary luxuries; I am talking about people who live fiscally responsible lives, who put in a full day’s work at a job that pays (relatively) well and want the ability to simply live in an apartment large enough to house the people inside of it.  We can’t just wait for the invisible hand to correct itself, and certainly not while the government ties the invisible hand behind its back.  We can’t wait for the long run because, in the immortal words of my least favorite economist, “in the long run, we are all dead.”  So what can we do now?

(1) Go North – housing is cheaper in the North and dirt cheap in the Golan.  And while the businesses in these areas generally pay less, the quality of life is much higher.  Also, remember that a penny saved is more than a penny earned (you don’t pay taxes on a penny saved).

(2) Rent over the Green Line (especially in the seam zone).  There is a lot of affordable housing in places life Efrat, Beitar Illit, and Karnei Shomron.  I single out places like the seam zone because they are close enough to allow a relatively easy commute to nearby industrial areas, but the truth is that most yishuvim over the Green Line are cheaper.  If you are looking for a yishuv over the Green Line, I would recommend using Peace Now’s interactive map that discusses all the yishuvim, their populations and where they are in relation to the barrier (I also appreciate using the map for the exact opposite of what its creators intended).

(3) Follow the transportation.  In my post to students, I suggested that TA students look for housing near the Petah Tikvah central bus station because it is just one bus ride to school.  The same goes for a myriad of other neighborhoods in and out of major cities.  If you live without a car, follow the bus lines from your work (in time, not distance) and see which lines or combinations of lines can take you to neighborhoods with cheaper housing.  For those of you with cars, follow the open highways and see if there is a place outside of the city that is only a small commute away.

(4) Don’t buy now.  Even if you have the money, now is the worst time to buy.  We are at the peak of the market and even if prices will go higher, they will fall soon. Yes, I also hate when economists try to act like prophets, but with higher interest rates and government action stirred against the high prices, I don’t see how housing prices can stick for even another year.   (Note to self: If in one year housing prices do not fall, go back and revise this post).

(5) Stick it out (just a bit longer.)  In keeping in line with the last point, prices seem to be slowly beginning to go down.  If you rent, you should probably plan to move in about a year.  Strangely, while the odds are that your landlord will not lower your rent, you will probably be able to find a similar place to live that is much less expensive (I will try to address this phenomenon in another post).  So if all of the options above don’t suit you, just stick it out a bit longer until the prices begin to fall.

Please note that when considering any of the solutions I suggested above, one must calculate how much one can earn (after taxes), how much one can pay in time and money for transportation and what is socially reasonable.

How have you been dealing with the rise in housing costs?  What solutions or recommendation can you offer?

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