Illegal Apartment Splits Threaten Urban Renewal Project in Netanya

The Netanya Municipality has informed the developer of an urban renewal project that a building with 19 apartments, only eight of which were legally constructed, cannot be included. The remaining 11 apartments are believed to be the result of illegal subdivision. The municipality cited its policy of calculating resident compensation based on permitted construction area, stating that compensating for all 19 units would render the project economically unviable and potentially halt it for years.

The project, located on Remez and Brodsky streets in central Netanya and promoted by developer Herzl Ben David, involves an old four-story building that originally housed eight apartments. Over time, these were illegally split into 19 units, each with a different owner. The developer began advancing the project in 2020, and by 2022, the municipality recommended including two buildings on Brodsky Street and the Remez Street building.

As the project progressed, the developer discovered the building's original permit only allowed for eight apartments. The building is also not registered as a cooperative house, meaning legally it is a single unit where owners hold proportional shares. The municipality's policy offers residents compensation based on permitted area plus 12 square meters and a 12-square-meter balcony. Including the 19 units would make the project financially unfeasible and could delay it significantly, also drawing opposition from other property owners in the complex.

In March 2024, the municipality officially excluded the building from the project. Alternative solutions, such as reinforcing the building and transferring development rights from another site, were considered but deemed too burdensome. A separate plan to reinforce the building, add protected rooms, and two floors also stalled. In late 2025, the apartment owners appealed to the Central District Court.

The owners argued that the illegal subdivisions were old and not their responsibility, and that leaving them in an unprotected, old building harmed their rights and safety. The municipality countered that the appeal was premature as a planning solution had not been fully explored. The developer stated he had invested heavily in redesigning the project after the building's exclusion and was committed to 57 other apartment owners.

The court rejected the owners' demand to rejoin the project. Judge Abbas Assi ruled that while the municipality initially intended to include the building, its subsequent decision, based on professional assessment of building rights, was not a disqualifying "zigzag." He noted that compensating for non-permitted units could jeopardize the project's economics or shift costs to others, and that precedents exist denying urban renewal incentives to illegally built structures. While acknowledging concerns about the building's condition and lack of protection, the judge stated these issues do not grant owners the right to force its inclusion in a project deemed unviable by professionals.