Tel Aviv Leads Urban Renewal Construction Starts, Jerusalem and Ramat Gan See Declines

Tel Aviv has emerged as the leader in urban renewal construction starts during the first half of the year, according to data from the Central Bureau of Statistics (CBS). The city initiated the construction of 2,032 housing units under urban renewal projects. This contrasts with Jerusalem and Ramat Gan, two cities previously prominent in this sector, which experienced significant drops in their construction starts.

Following Tel Aviv, Petah Tikva ranked second with 988 new units, and Bat Yam was third with 813. Jerusalem, surprisingly, fell to fourth place, beginning construction on 737 units. Overall, the first half of the year saw the commencement of approximately 9,600 housing units through urban renewal initiatives like "Pinui-Binui" (evacuation-construction) and Tama 38, representing a 5% increase compared to the same period last year.

The urban renewal sector is experiencing a complex period, with developers facing challenges such as large unsold inventory and slow construction paces. However, urban renewal projects, particularly "Pinui-Binui," are characterized by large-scale developments that can take years to approve. Once approved, their commencement can significantly boost a city's construction start figures in a short period. Examples of such surges were observed in Yehud-Monosson, Haifa, and Netanya.

Conversely, Ramat Gan saw its urban renewal starts decrease from 707 in the first half of 2025 to 314 in the first half of the current year. Jerusalem experienced a similar decline, from 1,016 units to 737. The Jerusalem Municipality contested these figures, stating they do not reflect current construction volumes and that their data shows a strengthening trend in 2026, with over 5,100 units started since the beginning of the year. They also noted that the CBS data ends in June 2026 and excludes subsequent starts.

Ramat Gan's mayor, Carmel Shama-Hacohen, downplayed the figures, suggesting the city is shifting focus from urban renewal to new construction areas and has implemented stricter conditions for developers. A recent survey indicated that Ramat Gan is perceived by developers as slow and opaque in its permitting process. Despite the slowdown in urban renewal, Ramat Gan ranked fourth overall in construction starts last year. The article concludes that the volatility in urban renewal construction starts indicates the sector has not yet reached full maturity, relying on a few large projects rather than consistent, widespread development.