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Everyone understands the importance of urban renewal, but many projects still get stuck for many years Real Estate Magazine

Everyone understands the importance of urban renewal, but many projects still get stuck for many years

  • Givat Shmuel.

    Set off after 20 years


    Gili Banjo

Produced by the Department of Special Supplements

We have already almost forgotten the real reason for urban renewal.

A study by Tel Aviv University conducted this year at the bottom of the Dead Sea warns that an earthquake with a magnitude of 6.5 on the Richter scale is expected to occur in the coming years.

The average cycle is once every 130 years, but there are also fewer anomalies.

How long does it take to get a permit in the various cities (according to data and research from the Madlan website)?

Bnei Brak: 1 year (39 projects), Kiryat Motzkin: 1 year (22 projects), Zichron Yaacov: 1.1 years (10 projects), Hadera: 1.2 years (12 projects), Kiryat Bialik: 1.2 years (42 projects), Herzliya : 2.4 years (32 projects), Tel Aviv: 2.6 years (181 projects), Bat Yam: 2.6 years (20 projects), Givatayim: 2.8 years (11 projects), Ramat Gan: 3.25 years (42 projects).

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Everything works in slow motion and lasts for many years.

Take for example the renewal of the neglected neighborhood of Romanian housing in downtown Netanya, in the area of ​​the Ari Bridge, with buildings about to collapse. The project began 20 years ago, and is only now getting underway.

Mayor Miriam Feierberg-Icher says: "This is one of the important projects approved this year by the district committee.

"This is a project that includes plots and buildings intended for evacuation-construction, along with private agricultural land, the purpose of which is to absorb some of the new housing units, similar to supplementary land." 

In Givat Shmuel, too, it took the project to mature 20 years.

The dream of the apartment seems farther away than ever for the occupants of 21 housing buildings in the Giora neighborhood, which are in an uninhabitable condition.

Neighbors were already signed and ready in heart and pocket for urban renewal, but legal complications and tiring bureaucracy made it an impossible task.

Or as one resident puts it: "We increased the value because of the potential, and continued to live in the ruin."

About 4 months ago, the Committee for the Advancement of Preferred Housing Complexes (VOTAL) finally approved the plan in Givat Shmuel, which will include 1,831 new housing units, to be built on the site of 552 crumbling housing apartments. Including two office towers.

Givat Shmuel Mayor Yossi Brodney: "This is significant news for the city and its residents. The plan was made with a broad urban perspective, taking into account aspects of transportation, environmental development, infrastructure, bicycle paths, parking and green lungs, and it is expected to improve the city's appearance and quality of life. Rami will understand the importance of the project and will work to implement it as soon as possible. "

Niv Rom, CEO of Canaan Urban Renewal, the company that greatly helped promote the evacuation program in Givat Shmuel and owns a stake in the complex, says that "only after a long period of professional work, did they finally succeed in significantly improving the program."

At high risk

An urban renewal project lasts an average of 12 years, even without Corona.

Following the crisis, further delays were created.

The fact that there is no functioning government in Israel also creates uncertainty in the field of urban renewal.

There is still no law that will replace TMA 38, the fund for urban renewal that has no real budgets and exists only as an idea, and its heads are supposed to be replaced.

According to Dun & Bradstreet data, by 2020 some 350 urban renewal companies had reached financial failure.

About 250 more companies are at high risk.

The field of urban renewal is an anchor in the activity of the real estate industry in Israel, and employs about 1,400 entrepreneurs. About 30,000 housing units of urban renewal are currently in various stages of implementation.

The annual financial scope of the projects is estimated at NIS 20 billion per year, which constitutes about 20% of the total aggregate revenue of the residential real estate industry.

The problem is that 75% of the construction is in the strong central area.

Precisely in the area destined for calamity along the Syrian-African rift there is no national strengthening, although Tiberias, Beit She'an, Safed, Arad, Beer Sheva and other historic cities along the rift have been completely destroyed in the past.

A tsunami has occurred in the past at the Herodian port in Caesarea, which did not prevent an urban renewal project in Or Akiva of the companies Tidhar, Shikun VeBinui and tried to wait in the bureaucratic pipes for more than a decade, and only recently is it finally implemented.

This year, there was a decrease in construction starts in urban renewal by about 15% compared to 2019. As a result of an overall decrease in construction starts in Israel in 2020, the sector maintained its relative share and constitutes close to 20% of total construction starts.

The year 2020 was also characterized by a decrease in the issuance of permits for new projects, partly due to disruptions in the activities of planning institutions.

There were also phenomena of prolongation of projects, delays due to closures and a decrease in sales.

Another problem is the fact that mayors are dominant in the process, with each authority acting in its own way.

"There is no procedure that requires all the authorities," says Yehuda Ketab, chairman of the Tel Aviv and Central District Contractors 'Association and vice president of the Builders' Association of Contractors. "Each city speaks its own language, and so does each district bureau or committee, which stalls the processes."

so what are we doing?

About 70,000 apartments to be built in urban renewal are expected to be added to the real estate market in the coming years. The share of the Jerusalem District, the Southern District and Judea and Samaria is expected to grow, at the expense of the Tel Aviv and Central share. 55% to 60% of industry activity, "says Efrat Segev, VP of Data and Analysis at Dun & Bradstreet.

An interesting solution was invented in Tel Aviv: the municipality undertakes the initiation of the master plan in certain areas, and does not entrust the promotion of the plan to a private entrepreneur. After the master plan is approved, it holds a tender, and a contractor carries out the project.

"This type of mechanism makes it possible to promote plans more quickly," explains architect Lilach Moore, VP of Netivei Hakma.

In cities near the northern border, almost not a single building is strong, and there are difficulties in promoting projects near the Gaza Strip.

The State of Israel, local committees and tax authorities can change the face of reality by incentives for entrepreneurs.

"National cooperation is needed for the renewed flourishing of these cities," says Nir Shmol, CEO of the Society for Urban Development and Renewal.

Itai Smadar, VP of Urban Renewal at Rothstein: “One of the major challenges for major cities in approving extensive plans is dealing with high density, infrastructure congestion and a shortage of public spaces.

Creative solutions are needed that will address the challenge.

In the era of the Corona, in the planning of the project, we allow the allocation of land for the benefit of the municipality and the establishment of common areas for the tenants, without them coming at the expense of the size of the apartment or building.

That way, the tenants, the municipality and the developer will be satisfied. "

Amir Cohen, VP of Marketing, YH Damari: "There is a built-in conflict of interest between the local committee and the developer regarding the number of housing units.

Local authorities are troubled by the lack of financial resources and public infrastructure, which provide the necessary support following the increase in density, to the entrepreneur an interest in adding housing units, which will increase economic viability.

There is a simple solution: the appointment of crucial appraisers, experts in accompanying projects and financial audits, who will be arbitrators between the committee and the developer. "

Ran Malach, CEO of the Urban News High School Builders: "Although the local authorities understand the necessity of urban renewal plans, the plans certainly challenge them. In Kiryat Ono we came to know that where the head of the authority outlines a clear policy, The director of urban renewal implements the policy, understanding that these processes work not only for the benefit of the apartment owners in the specific complex but also for the immediate environment and all the city's residents - this creates a fertile ground for action and the results are not long in coming. "

"The main problem in large cities, where the widest extent of urban renewal, is overcrowding and congestion on infrastructure, especially public buildings. One of the solutions is based on the concept of common spaces, which is gaining momentum mainly in the employment context, but not only. "Especially on the ground floors, which sometimes come at the expense of the permits for the tenants. Despite the challenges, we certainly see understanding and general willingness on the part of the authorities to advance the plans."

"Urban renewal is usually in the common interest of all parties involved," concludes Tal Kopel, Madlan's deputy CEO, "but there is often mistrust between the parties, which leads to different and strange delays. "In principle, for planning and ending with actual construction, and depend not only on the good will of those involved, but also on the degree of professionalism of the developer. It is very important to check who and what his record is, using tools that rank the professionals in the field."

Guide for the Renewable Tenant

How do you promote a renewal program?

Already at the first staff meeting of the tenants checked the percentage of those who agree.

Even if you have reached the legally required majority, experience shows that only a small proportion of developers will be interested in cooperating if there are opponents, so it is essential to have personal conversations with the opposing neighbors.

Try to understand the reasons for the opposition.

Arrange a meeting with the opposing tenants.

Respect them and do not get too excited about sweeping and even blatant objections.

Address each opponent and emphasize the element that is important to him.

It is also worth emphasizing the benefit of adding a security guard and adding an elevator, which is essential for the well-being of the older people in the building.

There are cases where an apartment owner cannot live in a building while strengthening or renovating for health reasons.

In such cases, the law requires the developer to offer that person to live in a rental outside his apartment until the work is completed and to bear the cost of the rental.

In cases of eviction-construction the amendment to the law requires the developer to offer the landlord who has reached the age of 80 at the time of the permit the right to receive the value of the new apartment he deserves at the time of eviction, so that he does not have to move to a rented apartment.

If there is one tenant left who refuses for unreasonable reasons, a claim can be filed on behalf of all the other apartment owners, and the refusing tenant will find himself responsible for the financial damages caused to them due to his disagreement.

In rulings issued on the subject, a clear trend arose on the part of the supervisors of real estate, who rejected the objections and made it possible to continue with the urban renewal plans.

(Adv. Ravit Sinai, author of the book Guide to NAP 38 and Evacuation-Construction


Produced by the Department of Special Supplements

Source: israelhayom

All news articles on 2021-02-19

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