Calcalist, Shlomit Tzur. 15.11.2020

The economic feasibility of realizing construction clearance projects in Jerusalem is expected to decline in two years. This, after the city council recently approved the change of criteria for exemption from the improvement levy in construction clearance projects, and determined that the existing exemption will be given to projects whose building permit will be issued until January 2023. The municipality explains that the purpose of the change is to expedite building permits for these projects. The granting of the exemption for projects that receive building permits after January 2023 will be reconsidered.

In 2014, the Jerusalem Municipality, with the approval of the Municipal Finance Committee, decided to grant an exemption from the improvement levy for construction clearance projects in complexes declared by the government, which will be realized within a total of 9 years (6 years for approval of city building plan, and another 3 years for building permit). The then mayor, Nir Barkat, announced that the purpose of the exemption is to encourage the implementation of construction clearance projects. Projects that met the criteria received the municipality's recommendation for the exemption approved by the interior and finance ministers.

The move encouraged the promotion of construction evacuation plans in the city, and in particular in the Kiryat Yuval neighborhood where some of the projects were implemented. According to the municipality, prior to the decision, 10 construction evacuation projects were promoted in the city, including 3,000 housing units, and currently more than 80 projects are being promoted, including about 28,000 housing units, 8,000 of which are already in the approved plans phase.

A document submitted to the City Council for approval on November 9 stated that "In light of the accumulated experience in recent years, there is a significant difficulty in moving from the planning phase to the actual construction phase, in light of a variety of reasons related to tenants, tenant claims, mediation "Conduct with heirs, etc. The period of issuance of a building permit within 3 years takes effect for the plan is not sufficient in some projects. .

The municipality estimates that an additional 14 construction evacuation plans are expected to benefit from this decision, including 6,871 housing units that are in the final planning stages, assuming that 30% of them will be sufficient to issue a building permit by the set date.

However, the municipality clarifies that plans that do not meet these schedules will be subject to the normal legal situation - and they will not be able to rely on the municipality's recommendation to be exempt from the improvement levy. These developers will submit the application for exemption from the improvement levy, which will be examined in its entirety at the same time, and will also require the approval of the Ministers of the Interior and Housing.

The Mayor of Jerusalem, Moshe Leon: "The Jerusalem Municipality sees the processes of urban renewal as a key tool for increasing the supply of apartments in the city and changing the criteria for obtaining an exemption that benefits the developers and is a catalyst for the implementation of the projects."

Entrepreneurs working in the field of evacuation and construction in Jerusalem claim that this is a decision that will freeze the promotion of long-term projects. Zevulun Rotenberg, Vice President of Business Development at Asdan Israel and a member of the Jerusalem Urban Renewal Entrepreneurs Forum, says: These are tens of thousands of tenants who have been in the process for years and are now facing a broken trough. Changing a policy without regulating an effective transition period is not fair to either tenants or developers because it does not take schedules into account enough. The new conditions will lead to a situation in which every project that has been launched in the last five years and in accordance with the municipality's policy will return, if at all, to its zero point, with less value for tenants and greater construction density. "