Far beyond the target: in 2023, the construction of 41,000 new apartments was approved/Reuven Castro
The Governmental Authority for Urban Renewal summarizes the year 2023 with data indicating the stability of the urban renewal market, and the maintenance of large-scale activity in this market, while withstanding the upheavals experienced by the Israeli economy this year.
According to the data, during this year, for the first time, many construction evacuation complexes were promoted in peripheral cities, an activity that can now be used as a lever for the rehabilitation and renewal of the cities of the south and north, in accordance with the goal outlined by the Minister of Construction and Housing, Yitzhak Goldknopf, immediately after the outbreak of the war.
Also, during the year, local authorities throughout the country issued building permits for approximately 9,000 housing units in eviction complexes, with approximately 80% of them located in cities with which the government authority signed framework agreements for urban renewal.
These agreements entitle the local authority to a grant against any building permit, which is used to assist in the establishment of infrastructures required for the renewal projects in that local authority.
The total incentives that will be paid for these permits reach a budget of approximately NIS 124 million.
In the estimation of the government authority, in view of the difficulty entrepreneurs experienced this year in promoting projects due to the increase in interest rates in the market and the reduction of demand, and the elections in the local government - factors that led to a certain decrease in the number of building permits compared to the previous year - these grants became especially important this year, as a government tool that prevented an even more significant retreat in the scope of building permits.
In light of this, the government authority intends to act in the coming year to sign similar agreements with other local authorities, with the aim of stimulating the issuance of building permits in as wide a circle as possible.
121 renewal plans with 41 thousand apartments were approved
In the field of planning, this year 121 urban renewal programs were approved throughout the country, which include approximately 41,000 housing units, far exceeding the government target set in the strategic plan for housing for this year, which is 31,250 housing units.
In order to continue and expand the planning reserves for the coming years, the government authority, in cooperation with local authorities, located dozens of new construction evacuation complexes, and this year launched new government construction evacuation plans in these complexes, which include a total of about 23,000 units, with an investment A budget of about NIS 80 million.
A breakthrough in urban renewal in the periphery
A groundbreaking planning initiative that was implemented this year focused on the peripheral cities, with an emphasis on the cities characterized by high seismic risk, some of which are also near the border.
In a broad mapping operation, the government authority located all the complexes suitable for construction evacuation in the cities along the Syrian-African fault line - Kiryat Shmona, Hazor HaGalilit, Safed, Tiberias, Beit Shean, Afula, Migdal Hamek and Eilat - a total of 110 potential complexes. These complexes include above of 1,000 buildings, and in their area about 37,000 new apartments can be built. Immediately after the mapping was completed, planning began for 25 of them, with the government authority's intention to advance the planning of all the complexes in an accelerated process, and to bring them to fruition through a government grant program to complete the economic viability of these complexes, which is present The low land values in them - do not allow the realization of the projects by market forces alone, in the absence of a government grant.
Another move by the government authority carried out this year with the aim of enabling urban renewal in neighborhoods that are not economically feasible, also in the center of the country, is the publication of tenders for grants to complete the economic viability of complexes in Ashkelon, In Lod and Kiryat Moshe in Rehovot, with a total amount of NIS 250 million. In Lod and Rehovot, winners were determined and 4 complexes were budgeted, and in Ashkelon the tender procedures have not yet been completed.
Along with the national goal of rebuilding the cities damaged in the war and strengthening the border areas, the focus of 2024 will be the task of increasing the scope of planning and realization of complexes Evacuation of construction, as a response to a future wave of demand that may arise in the scenario of the continued decline of interest rates in the economy, and the end of the fighting.
This expansion will be carried out in all cities, but with an emphasis on the promotion and implementation of programs in cities that were until now outside the demand areas.
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"The urban renewal market has had a very complex year"
Yitzhak Goldknopf, Minister of Construction and Housing: "Maintaining the continuity of work in the real estate market, starting with urban renewal and new construction and ending with rental housing, this is my main goal in this difficult period, the complexity of which is doubled due to our entering it with rising interest rates and local elections, which naturally leads to a slowdown in spending Various permits.
In light of this, the data from the field of urban renewal that reach me in the frequent assessments of the situation, as well as with the closing of the year 2023, testify to the strength of the market and its ability to meet the routine tasks and those that lie before us at the end of the war.
I strengthen the hands of all the citizens of Israel these days, and I thank all our partners in the real estate sector who are aware of the magnitude of the hour and join the task."
Elazar Bamberger, CEO of the Governmental Authority for Urban Renewal: "The urban renewal market succeeded in a very complex year, while maintaining high volumes of activity despite the challenges of the hour.
We see this as evidence of the existing advantages in this market compared to new construction, as well as the maturity that characterizes the market today, both in terms of advanced regulation, and in terms of the experience gained by the companies active in this market.
This year we focused on expanding the activity outside the areas of demand, and we are currently witnessing a new reality in which the planning institutions are preempting dozens of wide construction evacuation complexes, in distinct peripheral cities.
This activity will serve us in the coming year as a lever for the restoration and renewal of the cities of the south and the north, a task that will be the most important national task the day after the war."
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