Urban Renewal Concentrated in 10 Cities, Tel Aviv Leads

The first half of 2026 saw approximately 8,500 new housing units begin construction under urban renewal projects, with a significant concentration in Israel's central region. Tel Aviv leads this sector, with 1,987 new units started in the first six months of 2026, representing 58.8% of all new construction starts in the city. This includes projects under the "Pinui-Binui" (evacuate and build) and Tama 38/2 (demolish and rebuild) frameworks, along with 201 units from Tama 38/1 (adding units to existing buildings).

Petah Tikva ranks second with 956 urban renewal starts, making up 78.4% of its total construction. Bat Yam follows with 813 starts (68.8% of its total), and Jerusalem with 644 starts, though these constitute only 19.8% of its overall construction due to a larger general building volume. Other leading cities include Netanya, Yehud-Monosson, Ra'anana, Haifa, Ramla, and Ashdod.

Collectively, these top ten cities account for about 6,550 of the total 8,500 urban renewal starts nationwide in the first half of 2026, approximately 77%. This highlights a stark contrast, with central cities seeing 40% to 80% of their construction dedicated to urban renewal, while some peripheral cities have no such projects underway.

On a positive note, Yavne saw all 225 of its construction starts in the first half of 2026 as urban renewal projects. Ness Ziona also stands out with 87% of its starts in this category. Conversely, cities like Elad, Ofakim, Netivot, and Tiberias reported significant overall construction but zero urban renewal starts.

While overall construction starts have been stable, a report from the Israel Land Authority indicates a roughly 15% decrease in urban renewal building permits issued in 2025 compared to 2024. In 2025, permits were issued for 28,902 urban renewal units, with 13,066 for Pinui-Binui and 15,836 for Tama 38. A continued decline in permits could impact future project execution, although there is not always a direct correlation between permits and actual construction commencement.