Nation's largest earthquake-retrofit to begin in Bat Yam
NIS 235 million endeavor will reinforce 466 apartment units and add 343 more.
By NADAV SHEMERApartment building 311(photo credit: Ronen Zvulun / Reuters)
Israel’s largest earthquake-retrofitting project is scheduled to break ground early next year in southwest Bat Yam.The NIS 235 million construction project is being carried out in accordance with National Outline Plan 38, known also by its Hebrew acronym “Tama 38,” an incentive program to reinforce pre- 1980 residential buildings.The Andev Development Group, owned by American real estate developer Dan Anbar, will retrofit and upgrade 24 buildings with 466 apartments in the Hanevi’im lot, and will add 343 apartments on 2.5 floors in each building. Licenses for the first five buildings were obtained this week and developers hope construction will begin in January or February.According to Anbar, the tax relief enabled by Tama 38 – which was legislated in 2005 – made the project possible.“It enables us to provide a brand new apartment, let’s say a typical apartment of 100 meters, at about anywhere from 25 to 50 percent lower than what someone can get in Tel Aviv, and we’re next to the beach with Tel Aviv 10 minutes away,” he told The Jerusalem Post.“So the economics of it are good and at the same time, we’re able to provide inventory to the market at a substantially lower price.” He compared the situation in Bat Yam to that of South Beach, the Miami neighborhood that turned from lucrative to slum in the mid- 1980s.“There was a point at which people were giving away their properties on the beach just to not have to pay real estate taxes. That’s how bad it got. But at some point, new leadership came into the community, and over the past 25 years, it has become the most valuable real estate in the whole Miami area… the location is phenomenal, which is exactly the same situation as Bat Yam,” he said.
Anbar, 53, was born in Montreal to Israeli parents, but it was in the states of Illinois and Wisconsin where he made a name for himself, founding the Andev Group in 2003 and developing real estate projects worth hundreds of millions of dollars. Last year, he jumped on board the Bat Yam project – which was initiated years earlier by the local municipality but stalled by red tape.Anbar said there were two major factors in Israel that make it harder than in the US for people to break into its housing market. One factor, he said, is that the state still controls most of the bureaucracy and does not give much power to local municipalities; the other is that front-end loaded taxation increases the purchasing cost.“If you look at the typical costs involved in a new highrise in Israel, it turns out that around 35% of that is from front-end loaded taxes [such as the purchase tax],” he said.
“The monthly arnona [municipal property tax] is very low, but it makes the burden of entering into the housing market very difficult and expensive. In the US it’s exactly the opposite – there are really no front-end loaded taxes, except for some to pay for [services like] sewer hook-ups.”Anbar himself lives part-time in his Bat Yam penthouse, and will soon make his immigration to Israel official. He said his work in Israel is motivated by “Zionistic passion” and added that the Tama 38 program presents not only a great business incentive but also a philanthropic opportunity for real estate developers.“These buildings have no elevators, they’re in complete disrepair and a lot of the people in them are elderly. In the event of any emergency health crisis, earthquake, even a barrage of missiles, where are they going to go? They need to go downstairs by foot and many of them are 80, 90 years old and beyond,” he said.“Whoever came up with the idea of Tama deserves the Nobel Prize. The concept is brilliant because it solves multiple problems, creates new inventory of land because of tremendous shortage of land, and it creates it in the best interests of the country.”
