Israel's national outline plan for the seismic strengthening of existing buildings, commonly known as TAMA 38, has been revised dozens of times and is set to expire next year, but it has recently been updated yet again. This time, by Interior Minister Ayelet Shaked. The goal: another extension of the program, contrary to the position of the Head of the Planning Administration, who just a few weeks ago attacked developers for demanding an extension and said they were motivated solely by self-interest.
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Shaked announced her intention to submit a bill within 4 months for a plan to replace TAMA 38. As part of the new program, the scope of demolition rights will be increased from 350% to 400%, the height restriction on buildings will be annulled, and a fast track will be created for submitting plans and issuing permits.
In a move consonant with developers' demands, if the revised program is not legislated by the end of November 2021, the Minister will recommend that the National Council for Planning and Construction extend the original program by another year, until October 2023, and will work on improving its transitional provisions.
The bill will be based on the main track of the alternative program proposed as part of the memorandum on Amendment 128 to the Planning and Construction Law. It will include adjustments in response to comments from the public, local government, the Israel Builders' Association, and others.
To boost market certainty and reassure mayors, planners, developers, and apartment owners, expected timetables will be announced immediately, as well as the foreseeable results of each scenario regarding the revised program.
A recommendation was submitted to the National Council to revise its decision to cancel the TAMA program completely, so as to allow local authorities to retain some of the program's provisions if they so choose. The recommendation stipulates that the local authority will be able to continue implementing the program until the beginning of May 2022. In order to do so it will have to submit a general zoning plan for urban renewal, prepare a plan according to paragraph 23 for the entire city or a major part of it, or announce its intention to prepare a plan and specify its conditions according to paragraph 78.
The adjustments in the alternative plan proposed as part of Amendment 128 include: granting authority to all local councils to approve specific and municipal plans; increasing rights in the demolition track from 350% to 400%, which will improve projects' economic viability; annulling the height restriction on buildings; recognition of building additions executed prior to 2005 (instead of 2000); allowing vertical allocations; requiring a comprehensive view of the plan, including the allocation of public spaces; adding a mechanism for structure reinforcement and plot rights transferal; strengthening the status of historical buildings and sites, and improving the local authority's planning instruments; advancing a new track for process acceleration – plan submission + permit issue; granting parallel authority to a district council – following a certain period that is to be determined.
"When I took office, the issue of urban renewal in general, and TAMA in particular, were at the top of my agenda," said Shaked. "I'm happy to present to the public the Shaked Alternative to TAMA 38 – an optimal plan developed following a thoroughgoing review. The revised plan will counter the drawbacks of the TAMA program, which are well known, boost market certainty, and improve economic viability. In parallel, it will introduce a broad and comprehensive approach to the program's implementation, alongside greater efficiency and acceleration of the procedures implemented today. The train has left the station."
A partial solution
Head of the Planning Administration Dalit Zilber: "The revised TAMA program presented by the Planning Administration and adopted by the Minister of Interior provides a comprehensive solution to planning and environmental issues. The revision emphasizes general urban renewal rather than the single building, and considers infrastructure and public needs. It reflects a position that emphasizes a strategic planning approach for Israel in 2040, with urban renewal as a central pillar, alongside infrastructure improvement."
Adv. Shlomi Heisler, Chairman of the National Planning Council: "The Shaked TAMA 38 revision offers a holistic and comprehensive solution for all interested parties. It can heighten stability and provide a clear direction for all those involved. The new plan takes into account the clear need for cooperation with local authorities in whose territory the projects are implemented, and emphasizes the need to advance plans for reinforcing buildings and for urban renewal. We are determined to promote the revised program and all the steps necessary to implement it."
Raul Srugo, President of the Israel Builders Association: "The revision takes us in the right direction. TAMA 38 is a lifesaver, producing thousands of housing units a year in high-demand areas. Consequently, the Israel Builders Association worked with the Minister and the Planning Administration to change the previous decision of the National Council for Planning and Construction in order to extend the program to boost market certainty, while improving the proposal in order to retain economic viability for local authorities, apartment owners, and developers in implementing TAMA projects.
"The true test for all those involved, above all the planning authorities, is in completing the process within the short timetable they set themselves, since the shortage of apartments and the security risk posed by the lack of a TAMA program require an immediate solution. More action is needed to shorten licensing processes and procedures for issuing building permits. We call on Minister Shaked to advance the personal licensing reform and offer financial incentives in the form of government grants to local authorities for each housing unit to be built as part of urban renewal projects, to be used for improving local infrastructure."
Co-Chairman of the Israel Bar Association's Planning and Construction Commission, Adv. Micha Gidron: "The new program incorporates most of the major comments made regarding the alternative presented by the Planning Administration a few months ago, as part of Amendment 128 to the Planning and Construction Law. The alternative will grant TAMA rights to building complexes, making it easier to supply public spaces as part of TAMA projects. This is a good, balanced proposal, and it is to be hoped local authorities will cooperate."
Adv. Moshe Raz-Cohen, from the Raz-Cohen, Prashkar & Co. law office, who specializes in urban renewal: "The initiative is based on a combined licensing and planning track, but decisions are left in the hands of local councils. Today, TAMA 38 has become a thing of the past in many local councils in high-demand areas. Local authorities interested in retaining the program approved a plan according to paragraph 23, so they don't need Shaked's initiative in any case. Therefore, the new plan will in fact have almost no impact.
"The principles regarding building additions should be anchored in legislation and regulations, allowing local councils to act only in the licensing field. That way, the scope of their decision-making powers will be reduced and the TAMA momentum can be revived. Leaving the combined planning and licensing track to detailed regulation will guarantee the postponement of the plan's implementation. It will take years to integrate the combined track in the system, and at first the procedure will take longer than approving planning and licensing separately."
Adv. Adam Tsesvan, Partner and Head of Urban Renewal at the Gindi, Caspi & Co. law office: "It would be a mistake to cancel the program without an adequate alternative that will support urban renewal in places where demolition-renovation projects could not be advanced. Even if the new plan is approved in 4 months, the period of implementation should also be taken into account, otherwise the continuity of existing renewal projects might be broken. A solution should be found for the period of transition by extending the TAMA 38 program, and not just making do with approving the new plan. Transferring urban renewal from the sphere of licensing to that of planning is the right decision, but the alternative plan must be flexible enough to suit different locations and clear enough to improve the implementation of urban renewal projects and shorten timetables."
Adv. Anat Biran, who specializes in planning and construction laws: "The new plan offers a creative, flexible, and economically viable track while granting greater authority and solutions for mixed-use construction. The program's mechanism, according to which the plan can be approved and a building permit issued at the same time, is innovative. I'm curious to see how it will be integrated in the system, especially in light of the decision that no reliefs will be granted. Local councils wishing to prevent implementation of the revised TAMA program will be able to do so using paragraphs 77-78, which allow them to freeze the issue of building permits in certain areas. Since the program makes no mention of the betterment tax, it seems that councils that oppose TAMA 38 will not change their position."
Haim Mesilati, Chairman of the Real Estate Appraisers Association: "The initiative clearly shows a desire to find an immediate alternative to TAMA 38. A number of provisions in the new plan are sure to improve economic viability and advance quite a few projects, including the option of vertical allocation for public services and transfer of plot rights, which can significantly enhance planning and economic flexibility. Providing parallel authority to the district council to approve projects can assist in easing the bureaucratic backlog. As for cancelling the height restriction for buildings, municipal and building complex planning may suffer as a result. Planning and the economy must go together."
Amir Lotan, Director of Urban Renewal at the Levinstein Group: "We applaud the extension of the TAMA program, that is, urban renewal of a single building independently of other buildings. Increasing building rights and removing the height restriction will improve projects' economic viability and enable the renewal of more buildings in areas where this wasn't previously possible. The plan still does not offer a solution to the betterment tax. If the developer knows before the project begins how much he will have to pay, and the municipality knows the sum it will receive, both sides will move faster."
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Adv. Zvi Shuv, expert on planning and construction and real estate: "The new alternative is not quite clear. The basis should be taking decision-making out of the hands of the local councils, which today are the main culprit of market uncertainty. Each time a new mayor takes office, he can change the policy and all the rules, as is the case in Ramat Gan, for example. Another question that remains is the issue of the betterment tax. Today there's an exemption, but as we know, this is one of the main reasons local councils oppose the TAMA program.
"Another important point has to do with the allocation of built public space, which according to the proposal will be between 10% and 15% of construction rights. This can delay and cause friction between the local authority and individuals involved in the project. It is necessary to define who takes on the construction costs of the public spaces. The betterment tax should be taken into account, to the extent that it exists, as well as the technical specifications, the quality of construction, the integration of the public space in the future building, and more. Recall that recently the Supreme Court issued a decision on this issue that allows the allocation of public space in a building, but clearly the existing laws don't provide solutions to these problems."
Yehuda Katav, Chairman of the Tel Aviv and Central Israel Contractors and Builders Association and Vice President of the Israel Builders' Association: "The new plan is supposed to improve planning and financial certainty, among other things by removing the height restriction and increasing building rights to 400% – which is apparently inapplicable to many projects, expanding the authority of local councils, and shortening timetables for receiving permits and thereby preventing unnecessary paperwork.
"It doesn't fully solve all the existing challenges and is insufficient in several respects. First, there is no limitation of the decision-making powers of local councils, whose considerations are complex and not always aligned with objective planning interests. Second, the requirement to allocate 15% of the project for public spaces is too high. Based on past experience, we know that local authorities ask for the maximum and thereby delay many projects. Public uses should be adapted to residential buildings, so as to prevent nuisances. Mixed-use projects should be implemented wisely. Third, the program is still not economically viable in all of Israel, since there is no solution to the problem of low land value in the periphery and no incentives (such as complementary lands) offered to authorities or developers in order to improve economic viability in those areas as well."
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