Inbal David, CEO of "Dira LaHashkir," is offering Israeli renters 10 years of peace of mind

In the latest episode of the “Building Far” podcast, hosts Aviv Cohen and Merav Miller welcomed Inbal David, CEO of “Dira LeHashkir.” During the conversation, David explained the activities of "Dira LaHashkir," a government-owned company operating under the Ministry of Construction and Housing, whose goal is to provide long-term rental housing solutions. Who is eligible to rent in the project’s developments? And how does it benefit the housing market in Israel?

What exactly is "Dira Lashaker"?

The core concept of “Dira Lashaker” is to create projects specifically designed for institutional rental, offering significant benefits to tenants. David emphasized that “while the state’s agreement with the developers on the project can last up to 20 years, the lease each household receives is for a full 10 years.” A critical point that distinguishes the initiative from the private market is the flexibility granted to the tenant. According to her, “We’ve turned the tables, as the tenant can leave the apartment any year, while the developer (landlord) is obligated to honor the contract for that tenant for the full 10 years.” In this way, the power lies with the tenant, not the landlord. “This is a reality completely different from the volatile private market,” says David.

Who is this program intended for?

"The largest group consists of young families just starting out, but the program also serves older couples downsizing," says David. The projects divide the apartments into two main groups: the first consists of those eligible for the "Price for the Resident" program who hold a certificate of eligibility and enter a lottery. "If they win, they are eligible for a 20% discount off market prices, which are set by 'Dira LaHashkir' itself," David explains. The second group is the general public, "with between half and a third of the apartments in each project designated for the general public," David explains.

According to David, there are no eligibility requirements or need to enter a lottery. “The rent is negotiated directly with the developer at market rates. However, once the contract is signed, these tenants also benefit from a 10-year protected lease with a cap on rent increases, offering a level of stability rarely found in the Israeli rental market.” David noted that this is a product “far superior to what the free market offers tenants,” and that it also has a positive impact on the surrounding private rental market, as it “forces the rental market to adopt some standardization and encourages them to offer longer-term contracts or more stable terms in order to compete.”

Scope and National Coverage

“Dira LeHashkir” projects are implemented through the state’s sale of land to developers, in accordance with the company’s specific guidelines. The developer who submits the highest bid for the land commits to building and operating the project under the “Dira LeHashkir” model.
To date, the initiative boasts impressive figures: approximately 5,300 occupied housing units, about 17,500 units under construction, and an additional 6,000 units currently in tenders or set to be marketed soon.

The projects are located throughout the country, from Nahariya and Carmiel in the north to Eilat in the south.

David specifically referred to Tel Aviv, where there are two occupied projects and another project set to be occupied in about a year on Derech HaShalom, and noted that “there are additional projects in the planning and future marketing stages in neighborhoods such as HaMishteula, Sde Dov, and Jaffa. “Projects in high-demand areas like Tel Aviv are critical to enabling essential workers such as teachers, nurses, and municipal employees to live near their workplaces.” The Tel Aviv Municipality, David noted, “is very much leading this approach to long-term rental housing.”

Challenges and Coping

One of the main challenges in promoting the “Apartment for Rent” initiative, David explains, “stems from the economic reality of land use in Israel.” According to her, “The best use of land in Israel is for residential properties for sale.” Construction for sale is generally more profitable for developers than construction for long-term rental. To overcome this, the government actively supports and encourages rental development, while acknowledging that it may receive a lower return on land designated for this purpose.

Institutional Leasing in Israel Compared to the Rest of the World

David also discussed the state of Israel’s institutional rental market in an international context. She noted that one in three households in Israel lives in rental housing (a figure that has risen over the past two decades), a rate similar to that in the Western world. However, the institutional rental market managed by professional entities remains very small in Israel. "We account for less than five percent, compared to the OECD average of 10%–20%. This figure indicates significant growth potential in the sector."

How can I get more information and apply?

For those interested in learning more about the initiative or applying for housing units, David recommended visiting the "Dira Lashkir" website, rent10.co.il.

"You can sign up for the mailing list on the website to receive updates on lotteries and new projects," she explains. "When projects are launched, they are advertised, and applications are submitted through the developer’s website, with a link appearing on the ‘Dira Lashkir’ website. Even if you don’t win an apartment in the lottery (which grants a discount), you can still rent an apartment at market price in the project and enjoy the benefits of a 10-year protected lease.”