Eric Mirovsky, globes.co.il

Continue to regulate the area of construction evacuation . The Department of Justice's Chief Government Appraiser, headed by Ohad Eini, published the 21-year standard for public comment.

This is a standard designed to clarify the profitability of renewal projects , with emphasis on evacuation of construction. According to the new standard, the maximum profitability of the project will be eliminated, and the compensation for tenants will be reduced. Therefore, the final decision regarding the layout of the new standard will affect the triad of factors in such projects - the developers, tenants and the local authority.

Existing Standard 21 was approved in November 2012, with a view to introducing uniformity to the economic calculation methods that accompany urban renewal projects that are considered complex. It has often been ascertained that appraisers representing different parties to the same project presented completely different calculations for the profitability of the developer, and the areas of tenants that tenants are supposed to receive in exchange for participating in the project. As well as the improvement levies that should be paid to the local authority. The result - many projects were delayed and stuck, even when they were on paper.

The standard that currently exists refers to an outline in which existing apartment owners will add about 25 square meters, as well as parking and a balcony, but the repair amendment lowers the consideration to 12-25 square meters. Regarding the entrepreneurial profit, the Standard stipulates that, at the stage of preparation of the plan, it will reach 25% -30% of all expected costs. The new standard offers a lower 20% -25% profitability threshold.

The differences between proposed standard 21 and the existing standard

The new standard also includes an introduction, which regulates the order of operations. No more planning for specific projects but setting planning policies by the local planning and construction committees, examining the feasibility of the policy-based plans, and, if necessary, certain design changes, to bring economic viability to the projects.

The draft public comment states that if the planning policy is found to be economically feasible or requires substantial change, it is best not to promote planning at all. This is probably from the experience of many projects that were promoted and planned, but found no economic feasibility down the road, and they remained in the drawer. In addition, the new standard includes principles for calculating levies, which is not included today, and are critical in deciding the levy collection.