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Thursday Aug. 4, 2011 9:40 AM (EST+7)
Israeli protesters scoff at new housing law

Read more: law, Knesset, housing, protests, demonstrations, July 14, Arab revolts, economy, Benjamin Netanyahu

JERUSALEM, Aug 3 (Maayan Lubell/Reuters) - Israel's parliament passed a law on Wednesday aimed at cutting housing prices, but protesters seeking wider economic reforms pledged to step up their campaign against rising living costs.

Prime Minister Benjamin Netanyahu has been under pressure in the past few weeks to lower living costs in what local media have dubbed an uprising of the middle class.

Protests broke out nationwide in Israel last month with student-led activists demanding lower rent and land ownership prices. Demonstrations escalated, and on Saturday 100,000 people marched through Israel demanding lower living costs.

The new law would allow swift approval of plans for 50,000 housing units by special committees in order to increase supply and push down home prices which have rocketed up 40 percent in the past three years.

This law has opened the taps for the population thirsty for housing at a reasonable price, Netanyahu said in a statement after the bill passed in a 57-42 vote.

But dozens of protesters who said the measure was not good enough demonstrated in Jerusalem, Tel Aviv, Beersheba and Haifa, blocking roads and demanding the government do more to reduce living costs. A police spokesman said four people were arrested.

There is no mechanism in this law which will promise affordable housing, Yonatan Levi, a protest leader, told Army Radio.

Activists have presented the government with sweeping demands including tax reforms and changes to the education and health care systems. They say the new law will do little to force contractors to lower prices for homes.

But the government has said that rushed measures would lead to anarchy, and Israel has to be careful about its budget to avoid debt problems like those in other Mediterranean countries.

We don't want to find ourselves in Greece's or Spain's situation. All decisions must be taken responsibly, Netanyahu's spokesman Gidi Shmerling told Army Radio.

Commentators see no threat to Netanyahu's ruling coalition but the protests have put the Israeli leader under domestic pressure unprecedented in his term so far, dominating headlines and eclipsing the conflict with the Palestinians.

Though Israel enjoys low unemployment and 5.7 growth that is among the fastest in the world, its middle class bears a heavy tax burden and sustains the conscript military.

Rising prices of basic goods and commodities sparked a Facebook-mobilized boycott in June of cottage cheese, an Israeli food staple, and in July students pitched tents in Tel Aviv to air grievances over rapidly rising apartment rents.

The government has announced a number of steps to lower prices and quell unrest. But housing reforms declared last week, a cancellation of a planned fuel price hike and reduction of barriers on dairy imports have so far not appeased protesters.

We are disappointed and intend to escalate our struggle, protest leader Stav Shafir told Army Radio after the housing bill passed. (Writing by Maayan Lubell; Editing by Peter Graff)






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