The CEO of the Government Authority for Urban Renewal, Mr. Elazar Bamberger, addressed city engineers and urban renewal management officials across the country on August 26 in a letter presenting, for the first time, reasonable salary costs for organizers involved in urban renewal projects.
While organizers can help homeowners with the urban renewal process and significantly advance it, the current situation, with no defined rates by law or government procedures, means homeowners and developers face a reality where organizers sometimes demand salaries that constitute a significant portion of project revenues, affecting its feasibility and the expected return for homeowners.
The goal of the letter is to inform homeowners, through the urban renewal managements currently operating on behalf of the Government Authority in about 50 local authorities in Israel, about the reasonable costs of these services and to integrate these costs into the calculations that form the basis for plan approvals at planning institutions.
So how much do they pay?
The salary rates for organizers are based on their level of involvement and responsibility in the projects they promote, according to their size:
- For projects in which the organizer is involved until the developer is selected, the salary range will be NIS 5,000-12,000.
- When the organizer's services include a competitive process for selecting the developer in a tender, the salary range will be NIS 8,000-15,000.
- When the organizer supports the tenants until they receive the new apartment, the salary range will be NIS 16,000-24,000.
- If the organizer advances planning and supports the tenants until they receive the new apartment, the salary range will be NIS 25,000-30,000, plus planning costs.
"The project is exclusively for the apartment owners"
Construction and Housing Minister Yitzhak Goldknopf: “We led the decision of the Government Authority for Urban Renewal to regulate the organizers' salaries and prevent unreasonable costs for homeowners. The work done on this issue is the beginning of an important process, as well as the presentation of regulations to the Knesset Interior Committee in the near future.
"We at the Ministry of Construction and Housing, together with the Government Authority for Urban Renewal, will continue to advance urban renewal projects across the country and will continue to promote decisions that will benefit homeowners.”
Elazar Bamberger, CEO of the Government Authority for Urban Renewal: “Publishing the organizers' rates is an important step to prevent unreasonable costs sometimes associated with these services, which burden the advancement of urban renewal projects. The project belongs solely to the homeowners, and they have the power to prevent unreasonable payments to any party involved in the project.
"The success of this move will lead to an expansion of urban renewal activities in Israel and increase the expected returns for homeowners.”
"It's easier to make headlines than to address the root of the problems."
In response, the organizers' office stated: “The organizers' office regrets the recent directive issued by the Urban Renewal Authority regarding organizers' salaries. This is yet another attempt by the Urban Renewal Authority to divert attention from its glaring failure to meet the goals set by the government. It is easier to make headlines than to address root problems.
"The Government Authority for Urban Renewal was established, among other reasons, to accelerate urban renewal initiatives. However, since its establishment, it has failed to accelerate these initiatives, has not managed to shorten planning processes (which continue to lengthen), and has created more and more cumbersome bureaucracy that delays planning processes,” the office said.
“Regarding handling homeowners' inquiries, the authority has also failed miserably," it continued. "As of writing, the only person who tried to address the thousands of inquiries from homeowners, the public inquiries commissioner, does not exist. The authority has become an additional burden on developers instead of a catalyst for advancing urban renewal projects.
"The situation has become so unbearable that just a week ago (August 18, 2024), Carmit Yulis, the Deputy Legal Adviser to the Government, ruled that the authority should refrain from interfering in homeowners' compensation. Given this directive from Carmit Yulis, the authority's instruction appears to be a blatant violation of administrative authority.
“On a related note, the organizers' office regrets that despite our request for a thorough discussion and research on the issue (beyond the two meetings we held on the subject and incorporating some of our comments) before the document's release, Mr. Bamberger preferred a headline that would promote his name rather than a document that would advance urban renewal," the organizer's office said.
"Organizers are at the forefront of urban renewal and are a listening ear for tens of thousands of homeowners across the country throughout the project’s duration, which can last up to a decade. Along with attorneys, oversight companies, and appraisers representing homeowners, we will continue to advance urban renewal in a professional, transparent manner and at eye level for homeowners – despite the Urban Renewal Authority.”