All of the contractors that showed any interest in a Housing
Ministry tender for the construction of 72 single-family
housing units in Elad decided not to submit bids, apparently
because of the high entry-level price the ministry set.
Several months ago the Israel Lands Authority and the Housing
Ministry announced a tender for the construction of a
prestigious neighborhood in Elad to consist of 72 single-
family homes with an area of 250 square meters (2,500 square
feet) each.
The minimum bid was NIS 28.7 million ($6.4 million) including
development, or $89,000 per unit for the land. The cost of
development is about $52,000 per lot, meaning that the
builder will have to invest $141,000 per unit before he
begins to build.
Contractors' Union Director-General Yehuda Segev said the
price of land would require the contractor to sell a single-
unit home for about $330,000. He claims the state subsidizes
most land and is taking advantage of the fact the project is
the only one in Elad that includes single-family homes and
one of the only projects of its kind in Israel intended for
the religious population. Segev says the price the state set
is probably beyond what religious families can afford to pay.
In comparison with other locations such as Modi'in, Kfar Yona
or Gedera, the proposed price in Elad is very high, Segev
maintains.
The fact remains that when the Housing Ministry tender closed
last week not a single contractor had submitted a bid for the
right to build the land.
The Housing Ministry was surprised by these results since at
least ten contractors bid in each of the previous tenders in
Elad. Real estate professionals believe the Housing Ministry
will announce a new tender with lower costs.
