Urban Renewal Report for 2018

The Israeli Authority for Urban Renewal published in mid-May 2019 its Urban Renewal Report for 2018.

The detailed report state that requests for building permits under TAMA 38 projects in Israel are on the decline.

2018 was a record year both in terms of issuing building permits and in terms of buildings that were occupied in projects under TAMA 38 (in a variety of tracks – ‘Clearance and Construction’ or ‘Increased Building Rights’).

However, looking at the number of applications submitted for building permits between 2013 and 2015, there was a record number of requests for building permits – 805 requests for buildings in 2013, 1068 in 2014 and 1007 in 2015 – but 2018 was characterized by a sharp decline for all permits of projects under TAMA 38 – only 633 applications.

It is worth mentioning that nowadays every seventh apartment sold in Israel is in an urban renewal project.

Since February 2018, the Commissioner of the Sales Law at the Israeli Ministry of Housing began collecting data on new dwellings sold in urban renewal projects. Of the 27,540 new apartments sold in Israel in 2018, 3,800 of them were built in urban renewal projects.

As of the end of 2018, the number of housing units approved in Clearance and Construction plans, aka Tama 38/2, throughout Israel is only 13,000.

Looking at area dispersion, one can see that the periphery is falling behind with regard to building permits for Tana 38/2 projects; While in the Tel Aviv District building permits were issued for about 29,000 apartments and in the Central District about 21,000 apartments, in the Northern District building permits were issued for only 442 apartments and in the Southern District about 4,000 apartments.

If you are planning to purchase a new apartment, which has not yet been built or is under construction, in a TAMA 38/1 project, starting mid May 2019, the seller (contractor or developer) must be paid according to the progress of construction.

TAMA 38/1 projects, also called TAMA projects, are projects in which the developer / contractor carries out an exchange deal with the apartment owners – he purchases the building rights on the roof from them and builds residential apartments for sale on several floors above the floors of the building.

In return, he strengthens the building against earthquakes, and builds additions to the apartments – mostly armored rooms, sun balconies and renovation of the stairwell and the exterior, and the addition of an elevator.