Adi Cohen, themarker.com

About two years after the approval of the Housing Split Act - which promised the addition of about a quarter of a million small apartments to the rental market - the move appears to have failed miserably. A report drafted by the Planning Administration reveals that in the first half of 2019, 36 building permits were issued out of 126 apartment splitting applications submitted to local planning committees under the law. So far, a total of 71 building permits have been issued.

The report found that the highest number of applications in the current half year, only 25, was placed on the local planning committee's table in Rehovot; only 5 were approved by them. Of the authorities listed, the largest number of permits issued for apartment splitting in the first half of the year was at the top the eye - out of 18 applications approved 12.

Among the reasons for the failure: Local authorities are reluctant to add housing units; And the homeowners are concerned about the betterment charges and are reluctant to sell the split housing unit.

The law, initiated by Minister of Economy Eli Cohen and approved in July 2017 as a five-year directive, states that splitting up land-based homes for the purpose of building a rental housing unit can be done in an expedited process, without the need for a new plan by the local authority. According to the law, the size of the apartment after the split should be at least 45 square meters, and the hope was that owners of land-linked housing units will scrap the process and add housing units to the rental market.

The split regulation, which was also recommended by the National Planning and Building Council, was drafted in light of the shortage of small apartment rental in the market, where the state sees a tool for lowering housing prices and an immediate solution to housing shortage among young couples. Approval of the split is granted in the process of a relief application submitted to the local authority - which is obliged to approve the splitting of at least 20% of the land-based houses in its area.

The law also includes a series of incentives to encourage the market - mainly a reduced improvement levy to the local authority as well as an exemption from the requirement to establish a housing unit in the new housing unit. Under the temporary provision, a person who wishes to split his apartment will pay at the time of the permit request one third of the full improvement levy he had to pay for splitting the property. The improvement levy screen will be paid when the split property is sold, or if the property owner fails to sell the split property - it will not be required to pay the additional third.

The government deficit will deepen

Local authorities are reluctant to adopt the law for the same reasons they are reluctant to promote new construction in their territory. For the municipalities, the addition of housing units that would result in the fragmentation of the land-linked areas would put a strain on municipal infrastructure and services, as well as deepening the deficit in their coffers. To this is added the reduced improvement levy - which virtually eliminates any economic interest on the part of the Authority to encourage the splitting of apartments.

"The government is trying to lead to the creation of thousands of housing units overnight, regardless of the real needs of the residents, and so such a move is destined to fail - especially outside the demand areas," said Local Government Center Chairman and Mayor of Maccabim-Reut, Haim Bibs. "Splitting apartments without any prior planning and building permits alone can add a huge mass of housing units without the necessary infrastructure added, and without examining the city's possible capacity and needs. The mayors understand the need to build small housing units, which is why some authorities have also set a quota for split apartments, which accounts for 20% of the groundings in each neighborhood. However, the applications submitted so far are far from the quota set by those authorities. It is important to note that the local government is in favor of promoting housing solutions - but in a smart way, which takes into account all the necessary components, including a bunch, infrastructure, public institutions, education and the like. "

Adv. Ariel Kamenkowitz, a specialist in planning and construction law, explained: "Amendment 117 to the Planning and Building Law regarding the splitting of apartments in ground-floor houses is not economically attractive to either party - not the owner of the apartment or the local authority - and is therefore hardly implemented on the ground. For the landlords that are relevant to the repair, the protection costs, the improvement levies and other adjustment expenses that are required by the law can reach NIS 100,000. On the other hand, according to the amendment, they cannot sell the split housing unit anyway, but only for rent. "

Eli Cohen spokeswoman for the Ministry of Economy

Kamenkovitz added: "Local committees also face many difficulties in implementing the amendment, due to a conflict of interest with the central government. From splitting the housing units in favor of expanding infrastructure and developing public services, it has no real economic incentive to encourage the fragmentation of houses in its territory. "

According to the real estate appraiser Arya Camille, of the Camille-Treshansky-Raphael office, "For the authorities, implementing the split of apartments in land-linked homes is like TAMA 38 - you add housing units and residential density without adding economic value to municipal development needs. In other words, Amendment 117 will be similar to the law of the GDPR and other programs, which the authorities oppose, as long as there is no incentive mechanism that gives them the real cost to care for the additional residents. "

Take care of the ghost apartments

Meanwhile, while the state continues to produce artificial tools to fight housing prices and increase the supply of apartments in the market, the issue of ghost apartments remains unsolved. An April Knesset Research and Information Center review, based on Central Bureau of Statistics (CBS) data, shows that there are tens of thousands of vacant apartments in Israel, most of which are vacant for most of the year. In 2017, the highest number of vacant apartments was in Tel Aviv - 19,000 Other cities with a relatively high number of vacant apartments are Jerusalem Thousand, and Haifa - 10,000 thousand.

In order to encourage the housing of these apartments and to expand the housing supply, a directive was issued in 2014 that allowed the local authorities, with the approval of the Interior and Finance Ministers, to impose increased property taxes on unused residential buildings in 2015 and 2016. This provision was formulated following a committee recommendation led by Prof. Manuel Trachtenberg, which dealt with the cost of living and the lack of housing supply that stimulated price increases. But the State Comptroller's review, published in The Marker last May, revealed that of more than 200 local authorities, only Tel Aviv, Jerusalem and Haifa applied the time order.