The Marker, Adi Cohen, 18.05.2021
Not yet separated from NOP 38: a year and a half before the expiration date of the national outline plan for strengthening buildings, and with the security events of recent days in the background - the Ministry of Finance has been working for several weeks to postpone the plan, which is due to end in October 2022.
In recent weeks, even before the security escalation, the possibility has increased that NOP 38 will be extended for an unknown period of time, in accordance with the position of senior Ministry of Finance officials. The possibility was discussed in discussions between the Ministry of Finance, the Urban Renewal Authority and various realtors. A permanent government that enjoys the Knesset's trust will find it difficult to make decisions by October 2022 regarding the plan to replace NOP 38. Senior officials in these ministries now believe that a significant and high-quality alternative has not yet been established. Such an alternative involves complex legislation and will require much work.
According to estimates, even if a government is formed in the coming weeks, the possibility of completing the work on the NOP alternative is low. Therefore, the Ministry of Finance and the Urban Renewal Authority are expected to act in any case to postpone the cancellation, under the Arrangements Law.
According to government sources, the events of recent days, in which Israel experienced rocket fire on the central and southern regions, also gave impetus to the desire that was brewed to postpone the abolition of the NPA. "Although the plan does not require the construction of MMADs, it is ultimately a tool that leads to the renewal and strengthening of many old structures in Israel - and MMADs have become the norm in these projects," said a government source.
The decision to repeal NOP 38 - which entered into force in 2005, and has since been a key tool in the market for urban renewal and strengthening of old buildings - was made in November 2019 by the National Planning and Building Council, subject to the decision of the VoltaA (Subcommittee on Planning Issues). The decision to repeal TAMA 38 was made against the background of criticism from the planning institutions.
According to the audit, the NOP 38 plan lacks a comprehensive planning vision and burdens the infrastructure of cities without supportive solutions for congestion. In addition, the plan does not provide a solution for peripheral areas, including the bombed-out south or localities on the Syrian-African fault line. This criticism is also shared by the various government ministries, which demand the postponement of the cancellation scheduled for October 2022 - and the continuation of the plan for an unknown period.
However, it seems that the professional echelon of the Ministry of Finance and the Urban Renewal Authority - and perhaps also the Planning Administration itself - already understand that the abolition of the NOP 38 plan without an alternative will hit the construction industry and housing supply hard, especially in the center of the country. 15% of construction starts.
Construction evacuation complex in Kiryat Ono Photo: Eyal Toag
Since the National Council decided on the termination of the NOP in October 2022, the Planning Administration of the Ministry of the Interior, with the assistance of the Urban Renewal Authority, has formulated an alternative to the plan. Requires significant legislation, which could not have been practically promoted given the paralysis of government of the past two years, and the lack of activity of Knesset committees.
"At the planning level, NOP 38 is really not right for the economy in the long run and there is no doubt that going for a complex renewal in evacuation-construction is the preferred alternative," said a senior official in the government ministry working in the housing sector. Stable in the real estate market - and stability makes the market work.
"In practice, the NOP now brings in several times more apartments than evacuation-construction, where there is a greater dependence on municipalities - and only the planning procedures themselves can thwart these projects. It is clear to us that giving up so many construction starts will cause significant damage. At this time, the market needs stability more than anything else - and until there is a government and steps are taken to facilitate the evacuation-construction procedures, it would not be right to make changes to the existing situation. "A waiver of the abolition of the NOP is currently out of the question - but we are ready to continue it until there is certainty about the quality of the alternatives for it, which should be as significant and good as the NOP itself," the senior official added.
Annual rate of increase of 10% in apartment prices
Giving up masses of new housing units seems to have dramatic implications for the market, at the present time in particular. Even now, even before the repeal of the NOP, construction starts are faltering, the rate of building permit issuance is declining and the stock of land marketed by the state is shrinking. Accordingly, housing prices are soaring. Annual 10% of apartment prices.
It also appears from the Planning Administration's memorandum of law that there are still no agreements from government ministries, which will later require that changes and adjustments be made to it. According to the published memorandum, the alternative to the NPA will transfer the planning powers to the local authorities and give priority to urban renewal in the evacuation-construction route in the complexes, while determining the maximum scope of rights that will be granted in these projects.
Construction evacuation in Kiryat Ono Photo: Eyal Toag
Instead, the Treasury intends to push for another alternative, which also appears to be supported by the Urban Renewal Authority, which is reluctant to transfer powers to mayors, for fear they will slow down and thwart new construction on their territory. The finance alternative, which will soon be presented to the Planning Administration and other relevant bodies, calls for local authorities to be required to create statutory plans for urban renewal, by virtue of which it will be possible to issue building permits. In the same plans, the authorities will determine where there will be urban renewal of individual buildings, where there will be evacuation-construction complexes, and what the multipliers, building lines and the like will be. These plans will be under the authority of the District Committee, and as long as they are not approved or if their formulation is delayed, NOP 38 will continue to apply in those cities.
Currently, the protection gaps in Israel reflect a worrying situation: more than 60% of the apartments in Israel do not have a security guard, and 27% of Israeli residents (about 2.4 million people) do not have access to standard protection space, according to the latest data from the Builders Association And of the Home Front Command.
According to Raul Srugo, president of the Contractors Association, "With a functioning government, within a year of planning work it will be possible to reach an excellent alternative to NOP 38. Already at the alternative planning stage, the state must ensure budgetary investment to finance infrastructure for new apartments. Subsequently, the alternative to NOP 38 should include a comparison of the government's obligation to finance infrastructure in new construction and urban renewal with roof agreements with local authorities and planning solutions for the proper utilization of public areas.
"Another principle should be a holistic solution for protection and urban renewal in the periphery. We proposed such a solution to the state, and its implementation was halted due to the political crisis we found ourselves in. It is possible to directly fund protection and urban renewal,
On the other hand, the Planning Administration insists that the plans are progressing as usual, and believes that the alternative will also be ready in the existing schedules. The administration said: "Unfortunately, economic stakeholders are taking advantage of the security situation to determine the NOP 38 plan. The National Planning and Building Council has presented an alternative that includes strengthening and protecting the buildings. This alternative is for approval at the door of the government. In the next year and a half, anyone who promotes a TAMA 38 project will be able to advance in an orderly manner. "
The Urban Renewal Authority stated: "The alternatives to NOP 38 more accurately promote urban renewal, including the strengthening and protection of buildings throughout the country. The alternatives will have to include the possibility of approving a plan for urban renewal at the city or neighborhood level, which allows for urban renewal in their area, under the authority of the district committee. The alternatives are expected to lead to an increase in urban renewal activity rather than a reduction. We are working to complete these alternatives before the expiration date of the NOP, and at the same time we are aware of the need to consider further steps in this area in accordance with the evolving circumstances. "
The Ministry of Finance stated: "The issue is under investigation."