Netanyahu case against Netanyahu (Photo: Reuven Castro)
The current settlement law - a declaration of war on the housing estates:
it turns out that decisions promoted by Netanyahu in the past conflict with those appearing in the new settlement law, and may harm the pockets of hundreds of thousands, up to a total of about NIS 500 billion.
The big drama will take place this Thursday (3/16) at the High Court - in which Judges Amit, Willner and Mintz will discuss one of the most important issues in Israeli society - the serious violation of the constitutional right to property of the property owners in the slums, affecting hundreds of thousands of citizens. Damage that will reach 500 One billion shekels for the residents of the housing estates, it was claimed in the High Court.
The petition to the High Court was submitted by the Institute for Structural Reforms, against the serious violation of their freedom of contract and freedom of negotiation, regarding such a significant deal for them and the future of their family (High Court of Justice 8958/21).
Get to know the Netanyahu case against Netanyahu
In 2009, as part of the reform of the Israel Land Authority carried out by the 32nd government led by Benjamin Netanyahu, the Israeli government granted 750,000 tenants the property rights in the land on which their apartments are located.
This was a step designed to empower the weak and make the housing market liberal and competitive.
The State of Israel even established by law the "Governmental Authority for Urban Renewal" whose belief was to protect the rights of the residents of the neighborhoods and especially their property rights in land.
"Today it would be unthinkable that a government led by Mr. Netanyahu would help destroy the social reforms he enacted in his government in 2009 as part of the Israel Land Authority Law," explains attorney Shraga Biran, chairman of the Institute for Legal Reforms.
"However, contrary to these good deeds," claims Biran, "within the High Court of Justice, a bunch of bureaucrats got together and published without authority the amendment to "Standard 21", the appraiser's standard according to which the economic viability of evacuation-construction transactions is tested.
This "standard" established that all over the country, the residents of the neighborhoods will receive an additional apartment of between 12 and 25 square meters in size. That is, a uniform compensation in all eviction and construction projects throughout the country, without any consideration of the nature of the specific project, its location, the percentage of construction , and the fact that all the residents of the neighborhoods are the owners of the land."
Netanyahu against his base?
The High Court of Justice will decide on a question concerning hundreds of thousands (Photo: Shay Machlouf)
In practice, according to the Institute for Structural Reforms, the residents of the housing estates are entitled to all construction rights arising from the land, regardless of necessarily the area of the building currently built on the land.
Therefore, similar to any other combination transaction, they are entitled to receive a percentage of the total construction rights on the land, which will be given in the form of apartments or in monetary value.
"The mechanism of an addition to the area of the existing apartment is a reminder of the days of the notoriously neglected slums and housing estates. In those days, the residents of the slums did not own their apartment, and the disadvantageous mechanism of an exchange apartment could be used against them. However, unlike the notorious days of the slums, today the residents They have full ownership of the land, and still, in terms of the consideration, they continue to be treated as residents of Mabara," claims Attorney Biran.
"And let's not forget," Biran continues, "that all the government's activities on the subject, as well as the Urban Renewal Authority's - have failed. As evidence, during the 10 years until 2020, only 17,777 construction permits were issued as part of construction evacuation projects. An annual average of 1700 permits for construction evacuation throughout the country. A tiny amount that is far from helping to deal with the housing crisis."
Big drama at the High Court
As part of the petition to the High Court, the opinions of the greatest legal experts in Israel were submitted. Attorney Dror Strom, who was in charge of antitrust in the past, stated that Standard 21.1 is "a binding arrangement and a type of prohibited antitrust, at the contractual and administrative business level, the result of which is apparently the worst of all binding arrangement that has ever been discussed."
In addition, he noted that "the Board of Real Estate Appraisers has never been authorized to set uniform prices to be paid to apartment owners. It is certain that it was not authorized to damage the market in such a way that discourages all developers and real estate corporations from offering a uniform price and setting a "roof price" that developers and real estate corporations will pay to apartment owners in old buildings, within the framework of Pinoy Binoy deals".
In the new Arrangements Law, an arrangement has been added that has no counterpart and precedent, and is a promise of a minimum profit to the contractors which is a violation of the actual competition law.
Prof. Haim Zandberg, one of the greatest experts in property law, showed how in a cunning process of years, which included, among other things, amendments to legislation, administrative directives, appraiser standards, policy documents and more, an offensive approach was imposed, the 'return apartment' approach.
"According to this approach, owners of apartments in evacuation and construction complexes are forced to settle for one new apartment, equivalent in area to their previous apartment, equivalent in area to their previous apartment, plus a fixed, uniform and small area, regardless of the extent of the existing construction rights. On the other hand, those who benefit mainly from the economic value of the rights of the owners in the land are entrepreneurs who are not the owners of the land."
Finally, Prof. Yoav Dotan, an expert in constitutional and administrative law, showed that the amendment to the law in question is 'an exception on a historical scale': "This is the first time that a law has been enacted within the framework of the Settlements Law that touches the heart of private law, which is not at all related to public law. All rational They say that this is an illegal and offensive abduction."
Do the math: one million shekels per apartment - for five hundred thousand apartments
In the last year, during the tenure of the "Government of Change", the previous Law of Arrangements stood and included a large number of amendments whose only rationale, according to the Institute for Structural Reforms, was the weakening of the legal and property power of the residents of the neighborhoods.
Thus, the majority required for a construction eviction transaction according to the construction eviction law was reduced from 80% to two-thirds, which harms the bargaining power of the residents of the neighborhoods vis-a-vis the developers.
All this without anchoring any alternative protection for the apartment owners.
During the formulation of the legislation, the Knesset's legal adviser, attorney Sagit Afik, announced that the aforementioned amendment is "very complex and in part causes substantial legal difficulties.
Among other things, regarding the property rights of apartment owners in construction evacuation complexes in such a way that an in-depth discussion of these issues is required.
It has nothing to do with the budget." The Legal Advisor of the Interior Committee, Attorney Tomer Rosner, also repeated that the amendment constitutes a "significant violation of property rights."
In addition, in June 2022, the Council of Real Estate Appraisers under former Justice Minister Gideon Sa'ar published "Standard 21.1" - an update of the original Standard 21.
In the new "standard" it is determined that the compensation for the property owners will be determined according to the "compensation policy for the apartment owners", and if there is no such policy - "the addition will be calculated in steps of 0 square meters, 12 square meters and 25 square meters". The difference between the combination
deals On average in all cities where there is urban renewal, compared to what is allowed according to standard 21, it is at least one million shekels per apartment and for five hundred thousand apartments, this is a robbery of about 500 billion shekels from the residents of the neighborhoods.
The neighborhood high court - the fight for the property of the weak in Israel
Following these actions, the Institute for Structural Reforms submitted a petition to the High Court against the serious violation of the constitutional right to property of the owners of the properties in the neighborhoods, the violation of their freedom of contract and freedom of negotiation regarding such a significant transaction for them and the future of their family (High Court of Justice 8958/21), scheduled for hearing before the Judges Amit, Wilner and Mintz.
It should be noted that the founder of the institute was appointed in 2008 to head the national task force for urban renewal to grant property rights to neighborhoods and affordable housing, which was adopted and enacted as the most important social reform in the Netanyahu government in 2009.
After the submission of the petition and the opinion, the impression arose that a different wind began to blow from the corridors of government.
Thus, last September, a public letter was published by Shlomi Heisler, the chairman of the National Planning Headquarters at the time (and the current Director General of the Ministry of Finance) and Mr. Erez Ben Eliezer, Director General of the Planning Administration.
In their letter, the two called for striving to maximize the possible construction rights from a planning point of view, saying that "a planning institution discussing an urban renewal plan must act for the optimal utilization of the land resource within the framework of proper and appropriate planning, while examining all relevant considerations".
This was great news because this directive abandons the "minimum" approach that characterizes the standard and the policy of the local authorities that adopted it, and that's a good thing.
Using this principle, it was possible to carry out an urban renewal that benefits both the residents of the neighborhoods, who receive proper compensation, and also the housing market in Israel, which will benefit from masses of apartments.
The current settlement law - a declaration of war on the neighborhoods
With the current government taking office, the institute hoped that the petition to the High Court would be dismissed and the government would prove that it does not need the High Court to protect the rights of the residents of the neighborhoods.
But this particular government, a government whose one banner is the strengthening of the disadvantaged populations in Israel, may continue the harm and even intensify it.
Thus, in the draft proposal of the decision-makers for the economic plan for 2023 and 2024 (the Law of Arrangements) appear, according to the High Court of Justice presenters, some of the most offensive proposals towards the residents of the neighborhoods that we have ever seen:
Recognition of Standard 21:
In the draft Law of Arrangements, for the first time, legal recognition of Appraiser Standard 21 appears.
Reducing the majority required according to the Law on Strengthening Condominiums to only two-thirds:
according to the proposal, even in the demolition and construction of a single building under the Law on Strengthening Buildings, a majority of two-thirds of the apartment owners will be needed only - similar to the majority under the Eviction-Building Law.
The proposal dramatically harms the possibility of apartment owners to oppose projects that they are not interested in and/or do not receive a proper return for.
Increasing the profit for entrepreneurs:
according to the proposal, it was determined that the rate of entrepreneurial profit should be increased in standard 21 for the purpose of "encouraging urban renewal".
Let's not forget - this standard establishes from the beginning a meager compensation for the residents of the neighborhoods of 12 square meters (since this is the policy of most municipalities). But it ignores the fact that urban renewal is the real estate bonanza these days that many jump on, given the relatively low risk in this area.
As a result, the compensation for the apartment owners will shrink even more (because the construction rights of the project will remain similar), and the tremendous social potential inherent in urban renewal and the renewal of the neighborhoods will go almost exclusively to a limited group of developers - instead of to all property owners.
Abolition of the limit on the independence of the appraisers:
Another mechanism that will ensure the control of the contractors in the process is the cancellation of the limit designed to preserve the independence of the building clearance appraiser and prevent conflicts of interest.
The rationale behind the limitation was that the appraisers' relationship with the developers could bias the return in favor of the developers and to the detriment of the residents.
After the restriction is lifted, the appraiser may be related in one way or another to the developer and therefore prefer the interest of the developer - the recurring player - over the apartment owners - the one-time players.
This is another transfer of power from the residents of the neighborhoods to the contractors, all under the pretext of "encouraging regeneration".
The public housing in Be'er Sheva (Photo: Shai Makhlouf)
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