Obtaining a building permit is a process that takes years.
The result: a shortage of apartments, rising prices and frustration for all parties
From the preparation of the plan for the land to the delivery of the apartment to the buyer, an average of 12 years pass
Photography:
Dudu Greenspan
Produced by the Department of Special Supplements
Have you ever wondered why housing prices in Israel are rising non-stop, despite the state subsidizing billions in government programs?
The answer is simple - building permits are dragged on for years and create enormous and unnecessary costs.
The lengthy process delays construction starts and pulls housing prices upward.
Building permits are the main bottleneck of the housing industry in Israel.
In theory it is possible to build a building in a few months, but the bureaucratic reality is thousands of light years away.
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A quick approval of construction plans will allow the supply of apartments to catch up with demand, thus leading to lower housing prices, contrary to all the statements and plans of politicians, which are becoming towers in the air.
The length of time for issuing a building permit currently ranges from two to three years.
Many projects get stuck in local licensing committees as a result of a shortage of professional manpower in the authorities.
It should be noted for the sake of good order that building without a permit or in violation of a permit constitutes a criminal offense.
The online licensing system available for document submission and process management requires the local authority to review applications and respond within a quarter.
"This period of time does not allow the authority to check the plans in all the planning departments in the municipality," explains Adv. Vered Tzarfati Zevulun, vice president of the French company Shimon and vice president of the Builders Association of Builders Association.
Unfortunately, today the state does not require planning authorities to issue building permits for a limited period of time.
In many countries around the world if the developer has not received a response within 90 days of submitting the permit application, a permit is obtained automatically.
Shortage of apartments
In most of the cities surveyed since 2016, there has been a steep decline in building permit approvals.
In Tel Aviv, for example, about 183 applications were submitted in 2016.
Since the beginning of 2020 (as of June 2020) only 53 applications have been submitted in the city.
That is, even if the data for 2020 are doubled by the end of the year, a rather ambitious assumption in relation to the state of the economy, we still see a decrease of about 42% compared to 2016 and about 15% compared to 2019.
Even the WTO, the National Committee for the Planning and Construction of Preferred Housing Complexes, absurdly delays, even though it aims to expedite procedures in national projects. Conflicts between the authority and the entrepreneur.
If at the time of marketing the land all the required plans were approved in advance, the developer and purchaser would have certainty as to the date of receipt of the permit and in the second stage as to the date of occupancy.
Today, ministers are pushing to approve, just so that the long-awaited approval goes into the statistics, which ostensibly indicate achievements.
An analysis by the Bunei Haaretz Association states that in the next 30 years the housing market in Israel will need another 3 million new apartments to meet the expected demand.
How and when will they be able to build so many apartments?
After all, from the preparation of the plan for the land until the delivery of the apartment to the buyer in Israel, an average of 12 years pass, according to the State Comptroller.
In the United States, it only takes 3 months to get a building permit.
Everything is transparent and under the full responsibility of the architect of the plan, who in the event of failure also bears criminal responsibility and denial of occupation.
Already years ago, a proposal was made in Israel to require architects to sign a project for a building permit with increased responsibility, but many of them are afraid to take responsibility in the state of the combine harvesters, and rightly so.
In 2009, Prime Minister Netanyahu promised to shorten the waiting time for building permits to 3 months, in his well-known balcony reform speech.
Before him, it was Yitzhak Rabin who pledged for a period of 60 days.
About three years ago, Finance Minister Moshe Kahlon issued announcements that received favorable treatment in the media: a building permit in Israel within 45 days.
Not only did he speak, he also did.
He signed regulations requiring all committees in the country to reduce regulation and significantly shorten schedules.
It was determined that if a decision of the Licensing Authority is not given within 45 days of the receipt of the application, the application is considered as having been decided for approval.
Indeed, a makeover.
But in practice nothing has changed.
At Kahlon's housing headquarters, just before its dissolution, they boasted that Israel had made a significant leap forward in shortening licensing procedures and rose from 121st place in the world 5 years ago to 35th in the world today.
But even these figures, which currently require only 268 days to obtain a building permit, are poor in relation to the Western world.
Objections and appeals
Most of the appeals submitted to the Planning and Building Committees by developers and contractors are in the area of building permits.
Between 2017 and 2019, nearly 5,000 such appeals were filed, about 54% of all appeals.
The average processing time for appeals is appallingly long - 148 days.
Tel Aviv holds a dubious record of 184 days for handling an appeal.
In the Southern District the lowest average - 87 days.
Yossi Avrahami, the owner and CEO of the construction company that bears his name, says that the significant delays are caused as a result of the opposition proceedings. "These are not always substantive objections, related to the project's impact on the environment, but sometimes involve foreign interests," he says.
Not only the local authorities are delaying the process, but also the IEC, water corporations, NATA and firefighters. Another deterrent is the replacement of officials (mayor, engineer, committee chairman), which entails policy changes.
How can this bundled trouble still be solved?
The more the permit applications comply with the master plan, without the requests for exceptions and reliefs, the shorter the approval process. The burdens in the various planning committees also carry a lot of weight, but the most influential factor is regulation and bureaucracy.
Yigal Govrin, chairman of the Association of Construction and Infrastructure Engineers, explains that "developers work day and night on developing projects with a team of professionals, in Via Delrosa, which is called the process of obtaining a building permit."
The list of required conditions and approvals makes it difficult to obtain a permit.
There are many approvals that can be postponed to later stages without affecting the permit itself, such as a forest official approval, an agreement with a testing institute, an agreement with a landfill, the Home Front Command and more.
“The idea should be to minimize prerequisites as a condition of the building permit and raise them along the way,” Govrin suggests.
The chain of approvals that falls between the chairs between the state and the local authority is a default in itself.
An example of unnecessary bureaucracy are the new planning guidelines of the local authorities that exceed their authority and sometimes contradict the existing master plan. The municipality does not approve construction plans and sets much stricter conditions than what is stated in the master plan.
The developers file appeals, and the issuance of building permits is delayed.
For example, if there is a valid city building plan for a certain piece of land, the period of time for the construction of a building of about 60 housing units with a basement is about 4 years from the purchase of the land until the end of construction.
Changing the master plan at the local level will cause a delay of about another year. Changing the master plan in district committees will result in an additional period of up to 3 years.
This means that the construction of a building that will house about 60 families in the State of Israel takes between 4 and 8 years, with everything going according to plan and there are no special objections to the master plan. Half of the time is spent on bureaucratic procedures.
In urban renewal proceedings, the situation of issuing building permits is even worse.
Due to the period of closure and disruption of processes due to the epidemic and restrictions, delays of about 4 months are expected in the delivery of projects that will be completed in the coming year.
In 2019, there was a decrease in applications for building permits for new projects in the area of TMA 38 by developers by about 10% compared to the previous year. This year, Dun & Bradstreet expects a decrease in the number of permits granted for new projects due to corona restrictions.
During 2019, developers submitted 624 applications for building permits, compared to 702 applications in 2018 and 825 applications in 2017.
The data show that the field of urban renewal has been focused in recent years in the Tel Aviv and Central areas.
These districts accounted for 72% of construction starts in urban renewal in 2019. The reason is a shortage of land reserves in the center, alongside higher economic viability of the projects compared to the periphery.
Licensing not available
Under the latest regulations, local committees are required to provide full and detailed information regarding the plans, spatial guidelines, conditions and restrictions regarding the requested construction, and prohibit the addition of conditions not provided in advance.
In addition to the legal regulation, all licensing procedures in the country will be conducted through the online available licensing system, established by the Available Government (GOV.IL), to streamline the relationship between permit applicants and permit applicants and local committees and outsiders providing permit information.
The system centralizes in one place all the required procedures, information and approvals.
The main goal is to move from manual submission and multiple approvals and approving stations, in favor of online submission and consolidation of all requirements in one platform.
The new mechanism is intended to allow the schedule to be shortened to 90 days.
The absurdity is that the director of planning at the Ministry of Finance has so far invested about NIS 200 million in shortening the time period for issuing a building permit.
Among other things, the local committees were trained to implement the reform, and representatives of the Planning Administration even worked to implement an available licensing system throughout the country, instructing thousands of application editors regarding the operation and use of the system.
But the period of time has not really shortened.
Following the corona, it was decided that it would be possible to submit applications in an available licensing system, but the system would not count the days from the date of submission.
The population in the country is growing at a dizzying rate, and at least 1.5% of the available space must be thawed for construction.
At the same time each local authority must be required to produce its own outline plan within a specified time.
Many times the state does not reach agreements with local authorities on project planning, and any mayor can lower the counter on any project he wants and delay the issuance of a building permit.
"In recent years we have seen many mayors who are unwilling to give building permits mainly for the price per occupant, even though lotteries have already been held, because this is their way of squeezing benefits and budgets that have not been given to them so far," the contractors claim.
Legal Chudner, CEO of Netivei Hakma, which specializes in managing statutory procedures and licensing procedures, has such a solution. In the schedules, it is possible to consider the cancellation of exemptions and excessive uses in applications for permits for residential buildings, expand the list of works exempt from the permit and outline additional routes for obtaining approval that do not involve a full licensing process.
This will turn to time committees where they can promote and approve residential building permits. "
A work plan for 2021 should also focus on shortening the extended periods of time for issuing building permits by reinforcing professional and skilled manpower in the planning committees.
"Proportional legislative measures are needed to reduce the power of opponents of urban development, regulate land in the agricultural sector, and channel significant resources and financial budgets to create similar processes in the periphery," says Danny Moore, CEO of Best Initiative.
In the field of urban renewal, the discretion of authorities that deliberately fail projects in violation of national policy should be denied, and a unique committee should be established that is authorized to promote such projects in all localities, without the need for the consent of the local committee.
10 fastest cities
Which cities actually manage to approve permits within a reasonable period of time?
We went out to check with the help of the madlan website, the apartment board that combines price comparisons and comprehensive information about the property and its surroundings.
The test has focused on the last 5 years, so the corona is only a small part of the big picture.
The final rating was determined by the general average approval time, but the waiting times for new construction and urban renewal were examined separately.
According to Tal Kopel, Deputy CEO of Madlan, even among the cities with the lowest waiting time, there is a wide range, ranging from 8 months in Rosh HaAyin, to 16 months in Modiin Maccabim Reut. "This may be due to the longer time it takes to obtain a building permit for urban renewal," Koppel added.
Interestingly, 8 of the 10 cities with the shortest approval times have signed an umbrella agreement, under which they undertake to approve many apartments in exchange for government support and investment in supporting infrastructure.
It may be that meeting the goals of the roof plan is the catalyst that energized the planning departments.
Rosh HaAyin
Housing units: 4,316
New construction: 4,316
Urban renewal: 0
Approval time: 248 days
2. Beit Shemesh
Housing units: 6,985
New construction: 6,982
Urban renewal: 3
Approval time: 282 days
Afula
Housing units: 2,781
New construction: 2,778
Urban renewal: 3
Approval time: 321 days
Kiryat Motzkin
Housing units: 3,482
New construction: 3,229
Urban Renewal: 253
Approval time: 331 days
Bnei Brak
Housing units: 1,889
New construction: 970
Urban Renewal: 919
Approval time: 368 days
Tiberias
Housing units: 1,310
New construction: 1,244
Urban Renewal: 66
Approval time: 407 days
Kiryat Bialik
Housing units: 2,440
New construction: 1,977
Urban Renewal: 463
Approval time: 408 days
Ashkelon
Housing units: 6,449
New construction: 6,449
Urban renewal: 0
Approval time: 424 days
Beer Sheva
Housing units: 7,752
New construction: 7,713
Urban Renewal: 39
Approval time: 468 days
Modi'in Maccabim-Reut
Housing units: 5,057
New construction: 5,057
Urban renewal: 0
Approval time: 484 days
Produced by the Department of Special Supplements
