Urban Renewal Progress Lags Significantly Behind Planning in Israel
Translated & summarized from Globes by baba
A new analysis reveals that urban renewal in Israel is progressing much slower than planned, with nearly half of designated neighborhoods realizing less than 10% of their potential. Only 16.7% of 1.21 million potential housing units are currently in implementation stages. Factors like planning uncertainty, land ownership issues, and local opposition contribute to delays, despite government incentives. High-demand areas with strong economies and supportive local authorities show faster progress.
The story in 6 lines · by baba
- Nearly half of Israel's urban renewal neighborhoods have realized less than 10% of their potential.
- Only 16.7% of 1.21 million potential housing units are currently in implementation stages.
- Ramat Eshkol in Jerusalem leads with a 91.6% realization rate, while Beit Shemesh is at 6.8%.
- Planning approvals surged in 2025, but building permits and occupancy rates lag significantly.
- Economic viability, supportive local authorities, and planning certainty are key to faster renewal.
- Uncertainty over public obligations and local opposition are major obstacles to progress.
An analysis of 381 urban renewal zones in Israel reveals a substantial gap between planning potential and actual implementation. Nearly half of these neighborhoods have achieved less than 10% of their renewal potential, while only 13 neighborhoods have reached 60% or more. Ramat Eshkol in Jerusalem leads with a 91.6% realization rate, followed by HaRishonim in Ramat Gan at 87.8%. The study, conducted by the Real Estate Center and Madlan as of January 2026, examined 381 neighborhoods across 54 cities, encompassing approximately 1.21 million housing units designated for renewal. However, only 201,717 units, or 16.7%, are currently in some stage of implementation, including permit applications, building permits, or occupancy. This highlights a significant disparity between planning approvals, which reached a record high of about 76,000 units in 2025, and the issuance of building permits, which has declined to around 28,900 units. Despite government efforts, including NIS 210 million in incentives for local authorities and over NIS 1 billion for planning and subsidies in peripheral areas, the gap persists. Factors contributing to the delay include uncertainty regarding public obligations, levies, and timelines.
Regional disparities are also evident. Ra'anana shows the highest average realization rate at 34.7%, followed by Ramat Gan at 32%. In contrast, Beit Shemesh has a 6.8% realization rate, and Bnei Brak stands at 7.5%. Tel Aviv's average realization rate is 23.6%, above the national average, but significant internal variations exist. Neve Golan in Jaffa is at about 72%, while Kfar Shalom has a mere 3.2% realization rate. Tal Kofel, CEO of Madlan, attributes faster renewal in some neighborhoods to higher property prices and stronger populations, making projects more economically viable for developers. In lower-priced areas, large-scale demolition-and-reconstruction projects are the primary drivers, rather than building-by-building renewal. Kofel also noted that stalled projects often face issues like land ownership disputes, opposition to high-rise buildings, and reluctant residents.
Dan Kachanovsky, CEO and owner of the Real Estate Center, points out that neighborhoods exceeding 60% realization are typically in high-demand areas where land values support economic viability without government subsidies. He emphasizes the crucial roles of supportive local authorities and high planning certainty. "Where developers and homeowners knew what could be built and what was expected to be approved, projects multiplied. When planning institutions, especially at the local level, provide certainty to the market, it knows what to do," Kachanovsky stated.
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