From Ruin to Renewal: What to Know About the New Building Rehabilitation Law

Cohen says the law is effectively an accelerated route to urban renewal, with everything concentrated in one committee that decides on planning and issues permits. The law applies only in areas where missiles caused significant damage, such as the destruction of a building or a cluster of buildings that cannot be rehabilitated. In addition, the law allows for the addition of extra floor area in order to create a significant urban renewal complex.

Displaced residents have two options. The first is the buyout mechanism, immediate cash compensation calculated according to the value of the future apartment plus one-third of the consideration area. For example, if you were supposed to receive 12 additional square meters, you would get another 4 square meters for the purpose of calculating compensation. In a numerical example, an 80-square-meter apartment worth 2.4 million shekels, when a new apartment in the area is worth 3.2 million shekels, would receive compensation of about 3.3 million shekels.

The second option is to join the rehabilitation developer who will be designated and proceed with a regular evacuation and reconstruction project. Cohen notes that an apartment owner has 110 days to decide which path to join. As for the law’s effectiveness, he says it will not bring people home sooner because this is a long evacuation and reconstruction process, but it does have economic advantages for developers and residents. Developers can receive funding from the compensation fund to cover rent and for financial balancing, and residents benefit from the buyout mechanism. The main problem will be implementation, because many authorities are required to work at a pace that is unprecedented in Israel. Want to learn about the new building rehabilitation law? Watch the full report >> More details >>