Economy03:00 · 3h ago

Jewish National Fund to Invest Hundreds of Millions in Urban Renewal Projects in Israel's Periphery

Calcalist

Translated & summarized from Calcalist by baba

Key points

01JNF will invest 300-350 million shekels in five urban renewal projects in Israel's periphery.
02Projects will build about 2,200 apartments in Acre, Hatzor HaGlilit, Ofakim, Ashkelon, and Haifa.
03JNF offers low-interest loans, guarantees, and will buy 120 apartments for young community groups.
04Manof nonprofit leads projects in low socioeconomic neighborhoods, providing social support to residents.
05The model reduces developers' equity needs, improving project profitability and encouraging private investment.
06JNF's board approval is expected soon, with government bodies reviewing the investment model for wider use.

In this story

People

Amir Birem, Avital Blonder, Rafi Almaliah, Eyal Ostrinsky, Ariel Rotter, Shlomo Gutman, Yair Tal, Dafna Landau

OrganizationsJewish National Fund, Manof, Treasury Accountant General, Budget Department, Planning Administration, JTLV, Marathon Fund, Dira LeHashkir

PlacesAcre, Hatzor HaGlilit, Ofakim, Ashkelon, Haifa, Sderot, Nahariya, Arad

The story · English

The Jewish National Fund (JNF) plans to invest between 300 and 350 million shekels in urban renewal projects across Israel's peripheral regions. This funding aims to transform economically unviable projects into profitable ventures, encouraging private companies to participate. The JNF's unique investment model is currently under review by the Treasury's Accountant General and Budget Department, which are considering wider adoption.

Negotiations between JNF and the nonprofit organization Manof focus on five projects in Acre, Hatzor HaGlilit, Ofakim, Ashkelon, and Haifa, where approximately 2,200 new apartments will be constructed. JNF will facilitate low-interest loans by providing guarantees or direct loans and plans to purchase about 120 apartments to allocate to young community groups. This initiative builds on JNF's recent policy of buying dozens of apartments in cities like Sderot, Nahariya, Arad, Katzrin, and Beit Shean.

Manof, a nonprofit real estate developer founded in 2013 and led by Chair Amir Birem and CEO Avital Blonder, focuses on socially driven urban renewal in low socioeconomic neighborhoods ranked 1 to 3 by the Central Bureau of Statistics. Their approach includes establishing social management teams in each neighborhood to assist residents with income enhancement, debt arrangements, and legal representation during renewal processes.

The JNF-Manof model addresses the economic challenges of urban renewal in the periphery, where low property values yield minimal profits for developers, making projects risky. Unlike previous state grants that subsidize profits, this model reduces the equity developers must invest, improving returns on invested capital. JNF will provide mezzanine loans at about 5% interest and guarantees to lower institutional loan rates, creating an average financing cost near 5.5%. Additionally, JNF will purchase roughly 5% of apartments during early sales to reassure banks and encourage financing.

This initiative aligns with JNF's goals by promoting urban densification to protect open spaces and forests, fostering development in peripheral areas, and enhancing living conditions for disadvantaged populations. The model has received support from the Planning Administration CEO Rafi Almaliah and is expected to be approved by JNF's board in the coming weeks, followed by an internal selection process for the partner nonprofit organization. Urban renewal in Israel's periphery remains limited compared to central regions, with only 1% of approved demolition and construction plans in the north versus much higher rates in Tel Aviv and central districts.

Read the original at Calcalist