Gov't still offering settlers incentives
Tovah Lazaroff , THE JERUSALEM POST Jul. 6, 2009
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First-time home buyers can receive a bigger mortgage if they move to
settlements such as Itamar and Eilon Moreh than to the city of Ashkelon,
according to the Construction and Housing Ministry Web site.

Banks use the ministry's formula to calculate how much money can be lent to
a family, based on the number of children, the time the parents spent in the
army, their immigration status and the region where the home is located.

This means, for example, that a family of five can receive a mortgage of NIS
244,020 in the Itamar settlement, located southeast of Nablus and some 28
km. over the 1949-1967 armistice line, but in Ashkelon the formula awards
the family a mortgage of NIS 223,620.

The additional NIS 20,400 is one of the last vestiges of a system of grants
and tax breaks eliminated under prime minister Ariel Sharon, through which
the state encouraged people to choose homes in the settlements over those in
the center of the country.

But while grants and tax breaks for settlements are no longer available,
some settlements remain on the preferential status lists within different
ministries. As a result their residents, along with those of any community
on the preferential status list, are eligible for a special loan conditions.

Peace Now, in its June report on the 2009-2010 draft state budget, took
issue with the practice. Hagit Ofran said a better loan deal for purchasing
a home in the settlements was a type of incentive.

She noted that money was set aside in the Construction and Housing
Ministry's budget to guarantee the loans.

"It helps people move to settlements," and in this way the government was
hindering a two-state solution, Ofran said.

The ministry could not be reached for comment.

It was unclear if the practice of offering larger loans to residents of some
settlements would be eliminated after a Knesset Finance Committee vote
Sunday to approve the Areas of National Priority Bill, which would
drastically broaden the criteria that determine which communities are
entitled to the wide away of perks granted under "national priority" status,
which until now had been based primarily on their location. Legislation
setting forth this criteria will be included in the 2009-2010 economic
arrangements bill.

The change has nothing to do with the fact that settlements are still on a
number of lists, some of which, such as the one for the Industry, Trade and
Labor Ministry, expire this year, but rather with the desire of legislators
to change the definition of special-status communities.

It was unclear even to members of the committee and the committee spokesman
whether settlements would be included in the list of preferred-status
communities under the new criteria.

MK Uri Ariel (National Union) noted that the word "state" was removed from
the bill, under the assumption that the list could in fact include
settlements in Judea and Samaria.

But Pinchas Wallerstein, who heads the Council of Jewish Communities of
Judea, Samaria and the Gaza Strip, said he believed most of the settlements
would be written out of the preferential-status lists once they were
completed.

Ultimately, the cabinet, not the Finance Committee, will generate the final
list, based on the criteria approved as part of the 2009-2010 economic
arrangements bill.

Sunday's Finance Committee vote expanded what had been the solely geographic
criteria to include other parameters such as the security situation, the
socioeconomic status of the community, the preferred distribution of
Israel's population and the relative strength of the community in relation
to neighboring communities.

In addition, clause six of the law allows for "additional considerations
that relate to the population's needs in the area" - a clause that MK Shai
Hermesh (Kadima) accuses of "leaving the law wide open to accommodate any
community in Israel."

Rather than dividing the more than NIS 700 million budget for enhanced
mortgages among the 240 communities on the list, Hermesh said, the new law
would allow the government to compose a list including any communities that
it wants.

With the Finance Ministry unwilling to raise the budget for the law, Hermesh
said that many periphery communities that previously enjoyed national
priority benefits would now have to make do with less.

"The government wants freedom of action to reward communities on an
individual level," Hermesh said. "This is a law against national priority
areas, not one that supports them."

Hermesh said that despite his reservations, he voted in favor of the bill,
which is now expected to pass its plenum readings as part of the economic
arrangements bill, because if he didn't, the High Court of Justice had
threatened to do away with the entire status - a situation, he said, that
would lead to the collapse of social services in many periphery towns.

Rebecca Anna Stoil contributed to this report.