A new battleground has formed around Tama 38, Israel’s urban renewal outline plan designed to encourage tenants to strengthen their buildings’ structures. In light of criticism by numerous municipalities against the plan, Interior Minister Ayelet Shaked said Monday that her ministry will present a new version of the outline within the next four months.
The Tama framework is set to expire at the end of 2021 unless it is renewed. Finance Minister Avigdor Liberman has already said he plans to renew the plan as part of the government’s target of increasing housing supply and lowering prices. However, the mayors of several cities, including Ramat Gan and Bat Yam, are opposed to the extension, saying it undermines their city planning and quality of life.
Tama 38 was originally approved as law in 2005 as an innovative way to encourage residents of old apartment buildings to strengthen their foundations in order to meet the country’s new building codes providing protection against earthquakes. The idea was that contractors would upgrade building foundations and provide other benefits (usually extra rooms) to tenants in exchange for the rights to build extra apartments on the roof, which it would sell at a profit.
This arrangement seemed like a win for everyone. Apartment owners got their apartments enlarged for free, contractors were given profitable new projects, building structures would be updated, and the cities would gain new urban housing units in locations where there was no new land available. With real estate values rising an average of 52% over the past decade, it seemed like free money.
However, the reality has not always been so rosy. Adding new apartments without coordination with city planners leads to crowded neighborhoods with insufficient parking, schools, or public resources. Some municipalities have found themselves overwhelmed by the demands and fear that quality of life will seriously suffer.
Meanwhile, contractors have been blamed for promising more than they were able to provide, and with no recourse for tenants. Not to mention the deep tensions that frequently arise among neighbors over disagreements over whether and how to do a Tama project, due to two-thirds of a building’s owners being required to agree in order for a project to move forward.
The main changes in Shaked’s proposal include giving municipalities the power to approve or reject plans, improving planning tools for cities, abolishing the height limit for a building that the contractor can build, increasing the scope of a contractor’s building rights in case of a full building demolition, and expediting approval times.
If the plan is not approved within four months, then Shaked will recommend renewing the current Tama plan until October 2023, she said.
Liberman and Construction and Housing Minister Ze’ev Elkin are pushing forward with efforts to increase Israel’s housing supply. Last week, Liberman said that as part of his economic plan for 2022, the state will look to convert tens of millions of square meters of unused office space into residences.
In the meantime, Israelis are buying homes in record numbers, with a record NIS 11.6 billion in mortgages taken in June. Real estate prices have already risen an average of 5.6% in the past year, according to the Central Bureau of Statistics.