Prof. Sam Lehman-Wilzig – High Teching Israel’s Housing Problem
Israel’s #1 domestic problem is the price of housing – skyrocketing for the last decade. Surprisingly for the “StartUp Nation” that specializes in advanced, creative, high-tech solutions, the country has not even started looking at the one solution that could significantly (albeit not completely) resolve the housing crisis: 3D printing!
First, some background. About ninety percent (that’s 90%!) of Israel’s land is owned by either the State of Israel, or the Development Authority, or the Jewish National Fund/Keren Kayemet Le’Yisrael (JNF-KKL) – and not privately. These three authorities release land for building houses and other functions at their own pace (long-term leases, not outright sales). The Israeli zoning and building regulatory process is also long and arduous, with various zoning commissions at the municipal and regional level having to approve the plans. Many mayors are reluctant because the residential (as opposed to commercial) municipal/property tax does not cover the costs of city infrastructure that needs to be built for residential housing – so that holds up the process as well. And then the biggest bottle-neck of all: the contractors – huge conglomerates as well as smaller builders – that seem to be stuck in mid-20th century building approaches i.e., brick (or cement block) by brick.
The result: compared to most other western countries, Israeli housing prices are far higher. For instance (according to Globes: https://www.globes.co.il/news/article.aspx?did=1001358898), the average number of years of net salary in 2017 to buy a house in the U.S. was 4.18; in Canada 7.59; in Switzerland 12.6; and in England 13.13. In Israel it was 18.92! In other words, for an average Israeli wishing to buy an average apartment/house (without mortgage), they would have to work nineteen (!) years. And Israeli housing prices have risen sharply since that index was published.
The government has tried several different policy approaches, none with much success. It’s time to start looking elsewhere for a solution – and the revolution is already under way: “additive manufacturing,” or what is colloquially called 3D Printing. In a sense, this latter term is somewhat misleading (or confusing) because until recently it has been a niche market for “creating” little things at home: toys, utensils, even certain types of edible food. Then a few years ago (under the news radar, so to speak), it moved into more industrial areas, including airplane wings and artificial organs! Finally, recently it has taken another leap in size into home building.
This is not the place to describe the actual technological process that goes into such 3D prefabricated housing (for anyone interested, just Google Search: “Palari Homes and Mighty Buildings” for one example). However, this is not a pipe (or brick and mortar) dream – it has already been successfully implemented in California, Mexico, the Netherlands, Malawi, among other countries. The price? A two-bedroom home costs a mere $10,000 to manufacture – in only 24 hours! And we’re only at the initial stage of this technology. Over time, the “printers” will get bigger and faster, the homes even cheaper. This is especially true as the homes start moving vertically i.e., not one floor but several apartments one on top of the other. This has already been approved in Germany (not known for lax building codes): a three-floor apartment complex of five apartments. Based on this technology, by 2030 Dubai plans on building 25% of all homes through 3D printing.
To be sure, Israel needs to build mostly multi-floor residential buildings, given its shortage of land. Moreover, Israel has special housing requirements such as the emergency “bomb room” in each apartment. But these challenges are precisely where Israeli ingenuity and technological prowess should come in handy – and be very profitable, not only locally but internationally as well.
When we think of Israeli “high-tech,” the computer software industry comes to mind – relatively “easy” to innovate given that it deals with non-material products. However, Israel has already turned a very low-tech industry into high-tech with great success: agritech. The country has produced brand new types of vegetables and fruits; innovated the drip irrigation system that has spread around the world; and in general, moved up the value-added chain throughout the agricultural sector (e.g. the world’s highest dairy cow milk production per bovine). There is no reason that it can’t do the same in another of the world’s oldest industries: housing construction. All it takes is the same vision (and some government incentives) as already displayed in software and agriculture. Israel should “build” on those successes.
