Urban renewal is gaining traction as a means to increase the number of housing units in high-density areas, but many bureaucratic obstacles remain unresolved.
By JOHN BENZAQUENAiming high(photo credit: courtesy)
Real-estate prices in Israel are sky-high, and one of the reasons is that we are a small and crowded country where land for building purposes is at a premium. This shortage is especially true in established cities in the country’s Center, such as Tel Aviv and surrounding satellite towns like Givatayim and Ramat Gan.In these places, land for building purposes has practically run out. And since demand in these places is high, it constantly outstrips supply.One solution – or at least partial solution – to this perennial problem is urban renewal. This means tearing down old residential buildings that have a small number of apartments and replacing them with high-rises – or, alternatively, adding floors to existing buildings.This type of urban renewal is gaining momentum, and it takes two forms.The first is called “Pinui Binui” – vacate and build – which involves persuading residents of smaller buildings to accept newer and larger apartments, then tearing down the old apartments and building a larger ones in their stead.The second option is called Tama (urban plan) 38, which was put in motion as a means of fortifying existing buildings against the threat of an earthquake. Developers who undertake that task have the authorization to add up to two and a half stories to existing buildings.Although many believe the urban renewal process is too slow – that more legislation and less bureaucracy are necessary – a study by the Israel Builders Association’s economic department shows that the potential of such projects is vast.According to the study, if the process were implemented in full, it would be possible to add one million residential units to the existing stock of housing over the next 10 years. By implementing the full potential of Tama 38, the study continues, Israel could add 240,000 apartments nationwide, and by implementing Pinui Binui, another 760,000.These are impressive figures, since it would mean increasing the existing housing stock by approximately 40 percent!In Tel Aviv and the surrounding area, which in many ways is the bottleneck of the local real-estate industry, it is possible, according to that study, to increase housing by half a million residential units. According to the builders association, there are approximately 15,000 old buildings in the Tel Aviv area that can be torn down and built anew – a move that would add approximately 380,000 new residential units. Another 30,000 buildings are suitable for Tama 38, which would add another 120,000 residential units.In Pinui Binui projects, developers can add four new apartments on average for every old one torn down. Tama 38 adds an average of eight more apartments to existing buildings.The Israel Builders Association study is based on an analysis of all residential buildings constructed in this country after 1980, with the aim of verifying which are suitable for Pinui Binui and which for Tama 38.The study highlights Tel Aviv and the surrounding area, but there is great potential in the Jerusalem metropolitan area, the Haifa metropolitan area and the Beersheba metropolitan area.In Jerusalem, it would be possible to add 140,000 new residential units in the next decade, 100,000 through Pinui Binui and 40,000 through Tama 38. In Haifa, the potential is an additional 140,000 residential units, of which 115,000 would be through the Pinui Binui process and 25,000 through the Tama 38 process.In the Beersheba metropolitan area, 185,000 residential units can be added to the existing stock – 140,000 via Pinui Binui and 45,000 via Tama 38.Israel Builders Association president Nissim Bublil said recently that the government did not have the reserve of land necessary to build housing in Center, where demand is greatest; it would need to free up land that was in use for other purposes, such as agriculture.“The urban renewal program is the ideal way to increase the stock of housing without further damaging the environment by making use of agricultural land for building purposes,” he said.But, he continued, “the government is not doing enough to promote the process. There are many bottlenecks that can only be opened through legislation and government initiative, and this is not happening.”Many real-estate operators involved in these projects agree.Yossi Hasson, the general manager of the Hizuk Mivnim company, says that one of the main problems is bureaucracy.“There is no fast lane to obtain the necessary authorizations from the relevant authorities,” he says.The other problem, he says, is getting the consent of apartment owners: “A Tama 38 project needs the agreement of at least two-thirds of the owners of the apartments, and this is not always forthcoming. A Pinui Binui project needs the agreement of 80% of the owners, and this is even more difficult to achieve.”He is not the only developer complaining about the bureaucratic difficulties. Hemi Shaul, the general manager of Carasso Buildings, which specializes in Tama 38 projects, holds similar views.“One of the major problems in promoting such projects is regulatory,” says Shaul. “Some municipalities have not formulated the necessary guidelines.The municipality officials do not always know how to deal with these projects, and consequently a large number of requests for Tama 38 or Pinui Binui projects are gathering dust at the relevant municipal planning authorities.”
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