Israel Allocates NIS 210 Million to Boost Urban Renewal Infrastructure in Local Authorities

The Israeli Governmental Authority for Urban Renewal announced a new call for local authorities as part of the fourth round of framework agreements to promote urban renewal. A total of NIS 210 million will be allocated to finance infrastructure and public institutions in municipalities that meet targets for issuing building permits for urban renewal projects in 2026 and 2027. The financial aid will range from NIS 15,000 to NIS 38,000 per additional housing unit approved.

Eligibility criteria have been expanded in this round to include smaller and peripheral local authorities, aiming to broaden urban renewal efforts beyond major cities. Participating municipalities must have significant housing units planned for renewal and meet a minimum annual target for issuing building permits. Additional incentives will be provided based on the number of permits granted, growth compared to previous years, reduction of betterment levies in peripheral areas, self-licensing, and density.

The funds are intended to support infrastructure and public institutions required due to population growth, facilitating the implementation of urban renewal projects. These framework agreements provide budgetary certainty to local authorities while obligating them to accelerate permit issuance within a defined timeframe to increase housing supply.

Unlike previous rounds, this fourth cycle updates payment parameters and eligibility conditions, specifically allowing smaller and peripheral authorities to join. To qualify, a local authority must have a property tax income of up to NIS 5,440 per capita (2023 data) and approved plans for at least 1,200 unexecuted housing units as of the application deadline. Authorities already engaged under the "Generation B" agreement are excluded from this call but remain eligible for infrastructure funding for permits approved in 2026.

So far, 18 local authorities have signed agreements in the first three rounds, with a total budget of approximately NIS 700 million and 44,221 housing permits issued. Housing and Construction Minister Haim Katz emphasized that urban renewal is a key growth engine for the housing market and city revitalization, stating the framework agreements remove longstanding barriers and provide municipalities with necessary resources to develop infrastructure and public institutions. Yuri Gamerman, head of the Governmental Authority for Urban Renewal, highlighted the agreements as a significant advancement to incentivize the sector and accelerate permit issuance while supporting infrastructure funding.