It is anticipated that as many as 100,000 Soviet Jews will arrive in Israel in 1990, with upwards of a half million or more during the 1990s. These immigrants require housing and employment. The provision of an adequate supply of housing and commercial premises is no easy task given that a government agency, the Israel Lands Authority (ILA), controls over 90 percent of the country's land. If the ILA fails to supply sufficient land at reasonable prices to shelter and employ these Soviet Jews, grave social and economic problems will emerge. The present system of government control over land in Israel threatens to frustrate the successful absorption of Soviet Jews.

This paper sets forth the problems of the present system of land ownership in Israel, which includes the present leaseholding system, the damaging role of the agricultural lobby in preventing more efficient use of government-controlled land, the poor performance of the public housing authority, and the relationship between high land prices and the ILA's policy of releasing small quantities of new land for development, thereby exacerbating the housing shortage. The paper presents creative proposals for privatizing public land, which would increase private property rights, reduce bureaucracy, increase rents earned from land, increase economic growth, improve the marketability of housing and the mobility of labor, make it easier for businesses to acquire land, increase shareholding in the economy, and help reduce the public debt.

The author of Policy Studies No. 4 is Dr. Paul Rivlin, an economic consultant who has worked in industry and banking in the United Kingdom and Israel and is the author of a forthcoming book on the Israeli economy.