Israel is an expensive place in which to live, and its traffic jams contribute to that. According to a new study by Sani Ziv and Oren Shapir that was presented at the annual conference of the Aharon Institute for Economic Policy at Reichman University, road congestion adds 6% to the gap in the cost of living between Israel and Europe, over and above a gap of 34% in the cost of a basket of products.
The researchers found that, in relation to the reference countries, that is, countries similar to Israel in population size that it should aspire to emulate (Austria, Belgium, Denmark, the Netherlands, Finland, and Sweden), Israel is more expensive by 34% for the same basket of consumer products and services.
Housing accounts for most of the gap, but road congestion adds 6% to it, and the two factors are related. According to the study, the high cost of housing pushes the population to the outer rings of the main metropolis around Tel Aviv, which depresses productivity and raises the cost of living. The situation is such that about 10% of the residents of the metropolis live in its center, but about 25% of them work there. More and more people are moving to the outer rings, but employment continues to grow at the center, leading to rising numbers of road journeys.The study states that a transport system that cuts the journey time to the center is of high importance, as is increasing the supply of housing.
The researchers' conclusions are similar to those of dozens of studies and articles published over the years, but Israel still struggles to implement them. Integrated planning of transport and housing could lead to urban planning based on high-quality transport.
An approach that sees transport and housing as complementary
"TOD (transit-oriented development) is a planning approach that sees the transport system and housing as complementary, inseparable systems in urban development. This approach stresses the need for coordination and integration between the planning of land use, particularly housing areas, and the planning of urban transport systems.
"TOD is applied in many places around the world. In Singapore, for example, the Urban Redevelopment Authority combines long-term planning of the underground railway system with the development of new residential neighborhoods. Copenhagen has a "Finger Plan", originally formulated in 1945-1947, for urban development along transport routes. The Greater Copenhagen Authority coordinates between transport and housing planning. In Tokyo, the private railway companies develop real estate alongside their railway lines, with transport centers integrated with residential, commercial and industrial areas," the study says.
The researchers recommend increasing housing density near public transport routes through high-rise construction, mixed land use, and the fostering of private-public cooperation mechanisms. Metropolitan transport authorities could advance such long-term planning. The researchers also recommend using the rise in the value of land as a result of planning to finance investment in transport projects through betterment levies and public-private partnerships. These things will be applied in the construction of the Gush Dan Metro project and are anchored in the Metro Law and in the principles of Urban Outline Plan 70.
The Metro, which is estimated to have a budgetary cost of NIS 200 billion, will not, however, be enough. Closing the transport gap will require an investment program of some NIS 1 trillion in the period to 2040, an amount that is far above all of the Ministry of Transport's approved plans put together. In housing too, long-term planning is required involving massive investment in urban renewal in areas where the cost of land is low.
The Aharon Institute for Economic Policy researchers calls for the preparation of a long-term strategy for housing and transport that will be expressed in the 2025 state budget. They say that adopting their recommendations will lead to a decline in the real cost of housing to the trend line within fifteen years, to a 5% increase in product per worker by 2040, and to a narrowing of the price gap between the periphery and the center.
Sani Ziv sums up the study by saying, "When journey times are longer, the center has a greater advantage, and so if I am saved travelling time, the land is worth more, and that's the connection between transport and housing prices.
"According to our calculations, our journey times are double those of other places, and that adds another 6% to the cost of living. So, in effect, the traffic jams and the price of housing explain 50% of the cost of living in Israel. The problem is that there is no planning of housing units coordinated with transport, and renewal projects don't always match the location of light rail, Metro, or Israel Railways stations, and it creates inefficiency when two floors are added instead of building upwards.
"The government, therefore, needs to plan twenty years ahead, and it has to start now because this is precisely the economic 'day after.' We have seen how, when there is long-term planning, the private sector pitches in and things move."