Ramat Gan Apartment Owners Appeal Supreme Court Over Landmark Urban Renewal Ruling
Apartment owners in Ramat Gan have filed an appeal to the Supreme Court against a groundbreaking May ruling by Judge Gilad Hess of the Tel Aviv District Court that has shaken Israel's urban renewal sector. The case involves a large majority of owners (35 out of 37) in a demolition-reconstruction project at 75, 77, and 79 HaRav Herzog Street, promoted by Kochav Urban Renewal Company.
The original ruling declared that granting a uniform additional floor area to all apartment owners, regardless of their original apartment size, constitutes unlawful discrimination against owners of larger units. Consequently, the court conditioned enforcement of the agreement with a dissenting owner on payment of a balancing fee of 141,360 shekels.
Attorney Moshe Raz-Cohen, representing the appellants, argues that the ruling contradicts existing law and planning policy, threatening the urban renewal market. The appeal emphasizes that the uniform addition model is the accepted and fair standard in urban renewal, supported by regulators and appraisal standards (Standard 21.1). It also contends that basing fairness on proportional ownership of common property is mistaken, as building rights serve as governmental incentives to strengthen structures rather than to enrich owners of larger apartments.
The appellants further argue that the uniform model preserves the existing hierarchy among apartments, maintaining relative size differences, and that shifting to a model that amplifies disparities undermines planning logic and community goals. They stress protecting the majority's autonomy in economic model decisions to prevent a single dissenting owner from blocking projects or extorting the community.
Raz-Cohen stated, "The urban renewal market has stabilized around a model allocating apartments based on existing area. The district judge, one of the best we have, erred this time. The ruling, which treats compensation as proportional percentages, will exacerbate disparities, disrupt the market, and could lead to paralysis due to rejection of a model that balances values. We hope the Supreme Court will overturn this decision."
