The Marker, Adar Horesh, 22.06.2020
Urban renewal is expected to be one of the next major challenges in the housing sector. Huge construction and demolition projects can provide the most sought-after commodity in the industry - housing in demand areas, along with infrastructure upgrades and urban redevelopment.
The previous government recognized the great potential for urban renewal and invested hundreds of millions of shekels in the establishment of a special administration for planning and coordinating urban renewal operations on a national scale. The planning committees have promoted and approved large-scale plans, and entrepreneurs have raided the streets of sought-after cities in an effort to arrange tenants to agree and collaborate on these projects.
The results, as revealed by the Central Bureau of Statistics, are poor: The first quarter of 2020 was a low quarter in construction starts under urban renewal (demolition and construction) projects: only 1,329 construction starts, down 30% compared to the previous quarter, which also fell 6% . Most of the apartments built in this framework, 65%, were under the 38/2 TEMA plan to strengthen buildings, which are expected to be completed in two years and no alternative plan is yet to be decided.
2019 ended with 7,323 construction starts in urban renewal, a minimal increase of about 1% compared to 2018 when the number of construction starts in this area rose by 3.4%.
Keep in mind that these are only construction starts, reflecting the stock of ready-made apartments within two or three years ahead. So, it turns out that despite the enthusiastic reports of huge complexes approving tens of thousands of apartments in urban renewal, the plans are having trouble providing a significant supply of housing for the market, and certainly not helping solve the price problem.
Another notable result is the fact that urban renewal in its various forms is not a solution to the periphery. 5,923 of the construction starts in urban renewal in the current year (April 2019 to the end of March 2020), which are 85% of the total construction starts, were in Tel Aviv and Central District. Less than 1% in Beer Sheva and 2.7% in the northern region. During the previous government's term many proposals were raised to solve the urban renewal problem in the periphery, but none came to a practical discussion.