Jerusalem untangles the red tape for developers

Makhne Yehuda market credit: Shutterstock
Makhne Yehuda market credit: Shutterstock

Jerusalem Municipality has reduced bureaucratic obstacles and sped up planning procedures to support developers.

Local authorities in Israel are traditionally considered, at least in the eyes of developers, as one of the major obstacles blocking implementation of real estate projects. Many of them encounter a multitude of problems, and delays in working with one or another authority, and at the same time fear to criticise lest that authority "take revenge" on them later, and make the path to a building permit even more difficult. Even a change of government does not significantly change the situation, in most cases. As developers, there is probably no more significant inhibiting factor than the local authorities, each in its own way.

It is rare to hear that a certain authority is doing its job well. But in recent years, this is exactly the situation when talking about the Jerusalem Municipality, and especially during the term of current mayor Moshe Leon who is expected to be re-elected later this month, for another five years.

"The main thing that is felt in Jerusalem is that there is a policy, and above all that there is a decision from above to encourage and help developers. This is the opposite to many other places in Israel," says Azorim VP Engineering and Planning Meir Simcha. The company is currently planning and building about 1,500 housing units in the city, in addition to commercial and employment areas, public areas, etc. "We feel this mainly since Leon took office, and alongside city engineer Yoel Even, is focused on this goal. It permeates all departments."

The municipality itself initiates round tables to understand what is happening," explains Simcha. "In every project, there is a meeting once every so often, to understand what has progressed and what is missing, and if there are obstacles, how to solve them. I, for my part, must also meet the goals and present them to the municipality. There is no other municipality that works like this in the country. Once you know how to work together, you get cooperation and excellent action."

Real estate company Beit Yerushalmi CEO Yehiel Segal said, "The discourse in Jerusalem is different. The perspective, the magnifying glass, the emphasis all revolve around the urban quality. This is the spirit of leadership, in a very clear way, and everyone is very caring, very involved, very pushing forward. There is a clear policy here: open your mind, hear everything the developer wants to say and think about every comment from him."

The current reality: There is still a lot to improve

These kind words from developers, and evidence of change since Moshe Leon took office in 2018, must be put into context. Although data show a substantial increase in recent years, the city's great potential is still unrealized. As the largest city in Israel, by a large margin from Tel Aviv in second place (Jerusalem's population is double Tel Aviv), the number of building starts in Jerusalem is still does not what we would expect from a city of its size.

In recent years, the number of building starts in Jerusalem has been equal to or lower than Tel Aviv. In 2015 the number in building starts in Jerusalem was 3,005, according to the Central Bureau of Statistics, while in Tel Aviv it was 2,785. In 2017, 2,795 building starts were recorded in Jerusalem, and 3,444 in Tel Aviv - a gap of 23%. From 2019 onwards, the number of construction starts in Tel Aviv remained higher than that of Jerusalem, and this even when the number in the capital was steadily increasing, from 3,082 in 2019 to 4,456 in 2022.

In urban renewal too, the potential is not fully realized. In recent years many plans have been submitted for planning but in 2022 more urban renewal housing units were approved in Ramla and Lod than in Jerusalem, and in Tel Aviv and Ramat Gan more construction starts were recorded in the first half of 2023 than in Jerusalem as part of TAMA 38.

Even in the employment sector, the picture is far from perfect, and here too the inevitable comparison to Tel Aviv casts a dark shadow over Jerusalem. It is true that there are new projects in this sector too, including some grandiose plans such as the entrance plan for the city, but the reality on the ground is far from satisfactory.

"Jerusalem still needs to think about how it generates supportive employment, so that everyone who buys an apartment there knows that they have a place to work," says Simcha. "The city needs to strengthen and add to this area, despite the plans that are already coming to fruition. We have many investments at Azorim in Jerusalem, and it is important for us to see that these things also happen and to see that efforts are being made in this regard."

The path to change: A decision to deposit within 55 days

"The pace at which the Jerusalem Municipality works today is much faster compared with Tel Aviv," says Simcha. "Our plan, which was filed in February, received a decision to be deposited in August. There is no such pace of work elsewhere in Israel, and it's not just the municipality. The stars aligned for us and we also received a push from the district committee. Even in the licensing department, during the building permit phase, we feel that there is a common desire for the project to be built. They're not trying to find why not to build it, like in most other parts of the country, but why it should be built.

"Beit Yerushalmi's two plans, one in the Katamon neighborhood and one in the Beit Hakerem neighborhood, one for urban renewal and one for a project on private land, received a decision for deposit from the moment of their submission within 55 days," says Segal. "This is the pace they are working at in Jerusalem today. The engineer himself communicates, makes inquiries and tries to make the project precise. People come up with creative solutions, and this leads to the establishment of a garden on the roof of a building on Costa Rica Street, at the level of the street above it, and to the construction of a school with 12 classrooms in another project of ours. The planning quality is the determining factor. Those who bring good plans that improve the space "fly" forward in planning and progress quickly. Those who are just looking for building rights will not advance."

Jerusalem Municipality said, "According to Jerusalem Municipality's policy as declared by the mayor in May 2021, we won't allow plans to be promoted in open areas until all other options have been exhausted, through urban renewal, densification and intensive mixing of uses and high-rise building on light rail routes. At the same time, the municipality has managed to triple the number of building permits, and in recent years has been promoting dozens of urban renewal projects in all the city's neighborhoods, to increase the supply of housing units in Jerusalem, taking into account the limited land resources and meeting all the needs associated with these projects.

"The municipality also attaches great importance to aspects of revitalizing all public areas, in order to improve quality of life of residents including dense construction along light rail routes, construction of new schools and employment complexes and building spacious parks full of attractions.

"Jerusalem Municipality sees urban renewal as its goal, and holds forums and roundtables at all administrative levels and work teams, in order to provide a supportive urban envelope, support the project and assist in promoting approval processes, solving problems and removing obstacles. The mayor sees urban renewal as a central tool for the addition of housing units in Jerusalem and in 2022 Jerusalem led in the number of housing units in urban renewal, and the entire professional team gives priority accordingly. About 160 plans are currently being promoted in the city as part of urban renewal plans, including about 53,000 units. Of these, 3,800 units are already under construction."

Published by Globes, Israel business news - - on October 1, 2023.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.

Makhne Yehuda market credit: Shutterstock
Makhne Yehuda market credit: Shutterstock
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