The security situation once again highlights Israel’s vulnerability to missile attacks and earthquakes. Construction starts in Israel have been declining for several quarters, with a 25% drop in the last quarter. In the realm of urban renewal, there are also significant declines in most districts.
Data from the Central Bank reveals a concerning trend in construction starts for urban renewal projects. An analysis of the data by the Real Estate Appraiser’s Office shows that between the first quarter of 2022 and the first quarter of 2023, construction starts for urban renewal dropped by a significant percentage across the country. Notably, Tel Aviv and the Central districts had the highest construction activity.
In terms of numbers, the Tel Aviv district saw the initiation of 3,257 apartments in newly constructed buildings during the first half of 2023. While this number represents a 17% decrease compared to the same period in 2022, it stands in stark contrast to only 136 apartments in the South and 857 in the emerging North during the same time frame.
Urban renewal processes, including building evacuation and the addition of modern air defense systems, play a crucial role in protecting buildings against missile attacks and earthquakes. While recent events have shown that threats reach Tel Aviv and even the northern Sharon area, the disparities in construction starts for urban renewal between the Tel Aviv district and the South and North are a cause for concern.
Analysis by Districts:
The latest analysis of Central Bureau of Statistics data by the Bureau of Land Appraisers indicates sharp declines in most districts of Israel between 2022 and 2023. Jerusalem experienced a drop of over 50% in the construction of apartments in rebuilt buildings, while the South, heavily affected during the war, saw a 47% decrease in construction starts for urban renewal.
Conversely, there has been about a 50% increase in the construction of apartments in rebuilt buildings in the North between the first quarters of 2022 and 2023. Despite this uptick, the number of apartments built remains relatively low.
Nechama Bugin, chairperson of the Real Estate Appraiser’s Office, stressed the importance of urban renewal, saying that it “is the most significant engine for residential construction. Unfortunately, it took a long time for the state and local authorities to grasp its importance. The state’s sluggish approach, especially in economically challenged peripheral areas, has resulted in very few projects being promoted.”
“For comparison, during the first half of 2023, less than 150 apartments were built as part of urban renewal projects in the South, a stark contrast to over 3,000 apartments in the Tel Aviv district.” This almost 2,300% gap “highlights the urgency of the situation,” she said.
“Urban renewal not only modernizes buildings but also revitalizes infrastructure, benefiting cities and ensuring citizens’ safety,” Bugin said. “Decision-makers must act swiftly, with a focus on the broader urban and regional benefits, rather than just on entrepreneurial profit.”
“The State’s Inadequate Protection”
Niv Rom, CEO of Canaan Urban Renewal, emphasizes the need for a comprehensive plan: “Israel has yet to outline a concrete plan for expediting urban renewal. Given the threat of missile strikes across the country, all unreinforced old buildings pose a significant danger to residents. The country is not adequately protected.”
Rom called for the government to prioritize urban renewal, offer incentives to entrepreneurs in the periphery, and address bureaucratic obstacles hindering the process. Coordination between district and local committees, excessive demands for public works, and high levies for improvements must be tackled to make these projects financially viable.