The Rules of the Game Are Changing: A Quiet Revolution in Discounted Housing Lotteries
The Ministry of Construction has concluded a decade-long era of housing lotteries with new criteria. Draft evaders are now barred from participation, while the policy shifts focus toward the periphery, increasing quotas for IDF reservists.
The lottery of about 8,000 discounted apartments in 19 localities, conducted by the Ministry of Construction last week, marks the end of an era that lasted about a decade. Two changes with significant social implications have been implemented: first, a ban on participation for yeshiva students who evade military service, pursuant to a Supreme Court ruling; and second, a reduction in lotteries outside high-demand areas, following the policy of Finance Minister Bezalel Smotrich.
The new policy promoted by Smotrich has improved the chances for reservists. Previously, 20% of discounted apartments were allocated to soldiers; under the new policy, this will increase to 50% in national priority areas and up to 35% elsewhere. However, the Finance Minister has sharply reduced the number of localities and apartments included, meaning competition will be for a smaller stock.
New Criteria and Geography
Total data from the last decade shows dramatic changes. Since 2016, about 143,000 apartments have been raffled off, with 71,000 in high-demand areas in the center and Greater Jerusalem. The new threshold for lottery eligibility is a price of up to 20,000 NIS (including VAT) per square meter, or about 1.8 million NIS for an average 90-square-meter four-room apartment. The discount is now capped at 25%, with a ceiling of 550,000 NIS.
While expensive cities are excluded, some "islands" near high-demand areas, such as Ramle and Lod, remain eligible. This decision is valid until December 31, 2027. Naftali Bennett has already proposed a 1,000,000 NIS grant for reservists to purchase apartments, suggesting potential future shifts.
Political Context and the Ultra-Orthodox Sector
Following an April Supreme Court ruling, the state cannot grant benefits to yeshiva students who have not regulated their status with the IDF. Access to the most recent lottery was blocked for draft evaders at the last minute. It remains doubtful whether a government including ultra-Orthodox parties will risk holding lotteries in ultra-Orthodox cities if reservists might win the units.
To date, 19,338 discounted apartments (13.25% of the total) have been raffled off in ultra-Orthodox areas, with 43% of those in Beit Shemesh. Conversely, only 2,388 apartments (1.7%) have been raffled off in Arab localities, reflecting a lack of government policy to develop new neighborhoods on state lands for this population.
Governance and Economic Strategy
Lottery policy is dictated by the Israel Land Council, chaired by Construction Minister Israel Katz. The current changes represent a victory for Finance Minister Bezalel Smotrich and his ministry's professional echelon, who aimed to reduce benefits in the center and shift them to the periphery. This contrasts with the position of former Israel Land Authority director Yanki Quint and Construction Ministry director Yehuda Morgenstern, who favored maintaining lotteries in high-demand zones.
Former Finance Minister Moshe Kahlon oversaw the largest volume of discounted apartments (75,000) during his 2015–2020 tenure. Currently, the focus is on the Western Negev. In cities like Ashkelon, Sderot, Ofakim, and Netivot, about 18,000 discounted apartments have been raffled off over the last decade. Success in these regions relies on state subsidies for development costs. To ensure these areas do not become desolate "sleeping zones," the Tkuma Administration is currently investing heavily in attracting employment centers, particularly to Sderot.
