Urban renewal projects in Israel, primarily driven by TAMA 38 and Pinui Binui programs, are crucial initiatives designed to modernize and strengthen older buildings while addressing the country’s housing needs.
TAMA 38: Strengthening and Reconstruction
TAMA 38 is a national outline plan initiated in 2005, aimed at reinforcing buildings constructed before 1980 against earthquakes. It has evolved into two primary forms:
TAMA 38/1 – Strengthening Existing Buildings:
- This involves adding new floors to existing structures while reinforcing the building’s foundation and infrastructure. Residents remain in their apartments during construction, which can be inconvenient due to noise and dust. Developers fund these improvements by selling the additional floors built on top.
- The process provides significant tax benefits, such as exemptions from capital gains tax and betterment levies, making it attractive for both developers and residents.
TAMA 38/2 – Demolition and Reconstruction:
- Under this variant, the old building is completely demolished, and a new, more substantial structure is built in its place. This allows for a greater number of apartment units. Residents are temporarily relocated, typically within the same neighborhood, at the developer’s expense until the new building is ready.
- This approach is often preferred where the existing building’s condition is poor or the land value supports the construction of a larger, more modern building.
TAMA 38 projects are particularly common in Israel’s central areas where property values justify the costs involved. However, this has led to a concentration of projects in urban centers, leaving peripheral regions less impacted by these renewal efforts.
Pinui Binui: Evacuation and Reconstruction
Pinui Binui takes urban renewal a step further by targeting entire complexes or neighborhoods for demolition and rebuilding:
- Scope and Process: Unlike TAMA 38, which usually deals with single buildings, Pinui Binui involves large-scale redevelopment, often covering multiple buildings or entire blocks. The area is evacuated, existing structures are demolished, and new, modernized complexes are constructed.
- Resident Relocation: During construction, residents are temporarily rehoused, typically in rental units provided by the developer. Once the project is complete, they return to new apartments, which are often larger and more modern than their previous homes.
- Economic and Social Impact: Pinui Binui projects can significantly transform neighborhoods, increasing property values and modernizing infrastructure. However, they are complex and require extensive planning approvals, making them longer-term projects compared to TAMA 38.
Pinui Binui is often used in high-density urban areas where the benefits of redeveloping entire neighborhoods outweigh the costs and complexities involved. It’s a popular approach in cities like Tel Aviv, where space for new development is limited, and existing infrastructure needs modernization.
Investment Opportunities and Risks
Both TAMA 38 and Pinui Binui present lucrative opportunities for investors, particularly in Israel’s central regions where property values are high. However, these projects also carry risks, such as potential delays, changes in market conditions, and the financial stability of developers.
Investors are advised to carefully evaluate the project’s feasibility, the developer’s track record, and the specific risks associated with urban renewal before committing to an investment.
Conclusion
Urban renewal projects like TAMA 38 and Pinui Binui are key to addressing Israel’s housing challenges while improving the safety and quality of life in older neighborhoods. These projects offer benefits to residents, developers, and investors alike, but they require careful planning and consideration to navigate the complexities involved.
For more detailed guidance on these programs, including legal and financial implications, it’s recommended to consult with real estate professionals or legal advisors specializing in Israeli urban renewal.
