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Benefits are being improved: How does the competitive market affect urban renewal? - Voila! Real Estate

2023-05-28T13:31:16.739Z

Highlights: In recent years, urban renewal has been a central part of the real estate industry in Israel. As of 2022, about 35,42 urban renewal housing units throughout the country are under construction, in various stages of construction. 18 urban renewal plans have been approved, including 14,300 new housing units, and another 2022,<> additional housing units. Building permits for Pinui-Binui projects are on the rise, with a <>% increase since 2000. The 'new' urban renewal market is undergoing changes, offering a variety of benefits for residents.


Grants totaling tens of thousands and participation in the project's profits: these are just some of the benefits offered to urban renewal residents these days, when the market is competitive and the possibilities are greater than ever


Housing alongside luxury towers in Haifa (Photo: Eran Gilwarg)

The city is renewing and the changes are being improved: the competitive market and the many possibilities available to residents in the framework of urban renewal these days, when the field of renewal is hotter than ever - have led to positive changes in the benefits offered to residents, from signature grants of thousands of shekels, occupancy grants in you tens of thousands of shekels, coupons for the purchase of furniture and participation in the project's profits.

In recent years, urban renewal has been a central part of the real estate industry in Israel, a field in which about 1,400 different developers operate. According to the Government Report on Urban Renewal, as of 2022, about 35,42 urban renewal housing units throughout the country are under construction, in various stages of construction.

In addition, 18 urban renewal plans have been approved, including 14,300 new housing units, and another 2022,<> additional housing units. In addition, building permits for Pinui-Binui projects are on the rise, with a <>% increase since <>.

As stated, in accordance with the increase in demand from developers for urban renewal projects, competition in the market is high and accordingly we see various requests from tenants that have not been seen in recent years. The 'new' urban renewal market is undergoing changes, offering a variety of benefits for residents.

"Today, developers need to offer tenants much more than a new apartment."

According to Ron Alfandari, co-owner of AP Group, "The growing competition between entrepreneurial companies for urban renewal projects has led to a reality in which developers have to offer tenants much more than a new apartment in the project instead of their current one. These are quality returns with high added value for tenants, without which the developers may not be chosen by the tenants' representatives, or discover down the road that their tenants are not satisfied."

"From the moment the signature is announced, residents of future urban renewal projects live in limbo. On the one hand, the date when the apartment will be demolished is known and the tenants will move into a temporary home, until they return to their new apartment. On the other hand, urban renewal processes can take 5 years and sometimes longer, from the moment of signing until demolition. During this interim period, most of the residents, including the disadvantaged and the elderly, live in neglected apartments, because they cannot afford it or have no desire to invest in nurturing an apartment that is already slated for demolition, and this can have dramatic consequences." Alfandari says.

Ron Alfandari, co-owner of AP Group (Photo: Dana Friedlander)

"In the meantime, these relatively old apartments suffer from many maintenance problems. In light of this, we provide those developers in urban renewal projects with a new maintenance service for existing apartments. It is important to emphasize that the funding belongs to the developers and not to the tenants. It allows each tenant through a simple app to report malfunctions in his current apartment and we take care of a trusted professional to fix common problems in old residential apartments. This is a win-win situation, the service is funded by the developer and a service letter in order to improve the quality of life of the residents in the interim period until the demolition of the old buildings."

Alfandari concludes by saying that urban renewal may take years due to the complexity of planning and cumbersome bureaucracy, and there are thousands of tenants living in old and dilapidated apartments waiting to demolish the old buildings and build new ones in their place. "At this stage, the tenants are often unable or unwilling to invest money out of their own pockets to repair and renovate the apartments, and are therefore left to live in apartments that are not properly maintained."

The main challenge: the interim period can take over a decade

As mentioned, one of the problems in the field of urban renewal in Israel is that there are tens of thousands of existing apartments in urban renewal projects signed and promoted by various developers, but due to the cumbersome bureaucracy, it will take several years to obtain the required building permit.

Amir, an apartment owner in the Vertical 1 project in Tel Aviv of Ashdar of the Ashtrom Group, says that the tenants signed an urban renewal agreement about a decade ago with the developer "Hafer". Following challenges raised by the authorities, a change of developer, long bureaucracy and various challenges, only recently were the tenants evicted in favor of demolishing the building.

Amir explains that the waiting period actually worked in their favor in this case, thanks to an increase of about 40% in apartment prices in the area, which enabled Ashdar to provide more worthwhile returns for the tenants. Amir says, "During the interim period, which lasted over 10 years, we didn't know when the project would begin, so we didn't want to invest financially in renovating the apartment and the building, and in the meantime the house crumbled. The option of moving to another apartment during this period was also on the agenda, but we kept reminding ourselves that we would soon be evicted.

The level of emotional involvement with an apartment you own is high and we found ourselves dealing with many defects that may even pose safety hazards, cracks in the ceilings, mold, leaks, clogs in the pipes, falling plaster, but minimal renovation is expensive, and every time we thought we were close to the evacuation date. At the building level, for the past four years, all the residents have invested NIS 4,1 out of their own pockets every two months for repairs that included clogs in the pipes, malfunctions in elevators and more."

Omer Guggenheim, Deputy CEO and Head of the Business Development and Urban Renewal Division at Ashdar of the Ashtrom Group (Photo: PR)

Omer Guggenheim, Deputy CEO and Head of the Business Development and Urban Renewal Division at Ashdar of the Ashtrom Group, says: "At the time of the contract with the tenants, we see them as partners in the project together with us, in which they also have a lion's share. We are aware that this interim period is inconvenient, and it is important for us to shorten the period as much as possible while balancing the quality of planning and the solutions and challenges on the way to project approval.

"We keep in constant contact with the residents and help them as much as possible. The connection tightens even more before the evacuation and during construction. We meet all of our obligations and it begins at the engagement stage when the company carefully examines its obligations and does not commit to anything that has little chance of being fulfilled."

Guggenheim explains that during negotiations with the company, representatives of the residents and professionals, have a great responsibility not to be tempted by lip candy and baseless promises at the expense of the experience and quality of the company with which they communicate. "It is important to professionally examine the entrepreneur's offer and remember that there is no one consideration that fits everyone, and that there is a wide range of considerations tailored to each case. It is important to examine that the compensation is logical and acceptable and not deviated. The choice of the developer is of great importance not only if the project will be realized and within how long, but how it will be realized, how construction will progress and whether the developer's promises will be fulfilled.

  • Real Estate
  • Urban Renewal

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  • Real Estate
  • Urban Renewal

Source: walla

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