Two stalled South Tel Aviv projects go to the Knesset, and the contractors have a solution
Two of the most complex and sensitive development areas in southern Tel Aviv, Niss LaGoyim near Jaffa and Kfar Shalem in the city’s southeast, will be the focus of two hearings tomorrow in the Knesset Interior and Environment Committee. These are two districts carrying heavy historical, social and planning baggage, which despite years of plans, decisions and attempts at regulation have still not been realized. Ahead of the hearings, the Contractors and Builders Association, Tel Aviv and Central District, submitted two position papers to the committee, in which it points to fundamental flaws in advancing the projects. Regarding Niss LaGoyim, the association argues that the approved plan is not economically or legally feasible, and therefore should be moved to a new planning track within the VATMAL. Regarding Kfar Shalem, the association supports regulating the residents’ rights, but says that as long as the state and government companies continue to lead implementation, the rehabilitation will not advance. The hearings are being held following several requests for a fast-track debate submitted earlier this year by MKs Keti Shitrit, Meirav Cohen and Ofer Cassif. At the center of the discussion is the compensation outline formulated by the Israel Lands Authority for residents of Niss LaGoyim, which has drawn criticism from MKs who said it is unfair to longtime residents of the area.
The Niss LaGoyim complex is included in the plan “New Neve Ofer, Niss LaGoyim (TA/4100),” which was approved in 2017 and is being advanced by the Israel Lands Authority and the Tel Aviv municipality. The plan covers about 214 dunams and includes a new neighborhood with about 1,600 housing units, about 25,000 square meters for employment and commerce, and about 400 hotel rooms. However, despite approval of the plan, its progress has been halted due to the need to regulate the evacuation of those holding the land and the compensation they will receive. In the explanatory notes to the proposals submitted to the Interior Committee, it was written that the District Court ruled that it would not be possible to advance to the occupancy stage before agreements and regulated compensation are reached with the neighborhood’s original residents. At the same time, a petition is currently being heard in the Supreme Court regarding this decision, on the grounds of flaws in the tender. According to the Israel Lands Authority’s position, responsibility for arranging the evacuation and compensation of the about 150 families living in the complex lies with the developer that won the tender. According to various reports, the Israel Lands Authority’s compensation outline is based on the residents’ legal status on the land and ranges from hundreds of thousands of shekels to about 2.8 million shekels per apartment. The residents, by contrast, are demanding higher compensation and say these are families who have lived there for decades under difficult conditions, after years of neglect by the state. One of the prominent tenders in the complex ended with the win of Reality Fund for a plot intended for about 500 housing units, for about 350 million shekels including development costs. Several months later, Reality sold the plot to a joint company with Y.H. Dimri for about 450 million shekels, while the issue of evacuation and compensation remained unresolved.
In its position paper, the Contractors and Builders Association argues that the state is trying to impose the costs of evacuation, compensation and legal proceedings on private developers, thereby creating an “unreasonably heavy economic burden.” According to the association, in the absence of legal certainty and an increase in building rights that would make it possible to finance the compensation, the project may remain stuck for many years. The association therefore proposes renewing the planning for the complex through the VATMAL, which would allow an increase in rights and densification of construction in order to create an “economic cushion” that would enable fair compensation for the holders without harming the project’s economic viability.
The second hearing will deal with Kfar Shalem, במסגרת a bill on construction and evacuation of rehabilitation areas submitted by MK Keti Shitrit. The purpose of the proposal is to anchor in law the rights of Kfar Shalem residents to compensation in exchange for vacating their properties, and to stipulate that no evacuation will take place without guaranteeing their rights. The bill is based on the criteria document for the evacuation of Kfar Shalem formulated by the Housing and Construction Ministry in 1996, and proposes two main compensation tracks, a “build your own home” track, based on compensation and land rights for building a house, and a “free market compensation” track, based on the amount needed to purchase a replacement apartment. In addition, the proposal seeks to index compensation values, grant an additional 2 percent seniority bonus for each year of residence to eligible longtime residents, regulate the status of family members and expand protections against eviction orders. Here too, the Contractors and Builders Association welcomes the effort to regulate residents’ rights, but argues that the model will not be implemented as long as the state and government companies continue to lead the process. The association describes the handling of Kfar Shalem through the Halamish company as a “prolonged failure” and a “planning and economic failure,” and says that despite the years that have passed, the pace of evacuation in the complex remains very slow. As an example, the association cites the Mehal-Motza complex, where residents organized and signed a renewal agreement with Acro Real Estate, but according to the association the move was not advanced because the municipality refused to approve building rights at a level that would ensure economic viability and because of financial demands from Halamish. According to the association, the result is that residents continue to live in old buildings without protection and without a real solution. The association believes the state is incapable of functioning as an efficient real estate developer, while the private market is able to raise financing, bear compensation costs and advance agreements with residents. To that end, it says, economic certainty must be provided by approving building rights that will guarantee a minimum developer profit of 16 percent according to Standard 21, alongside a blanket exemption from improvement levies.
In its concluding position papers, the association calls not to settle for declarative legislation or compensation mechanisms that are not based on economic feasibility. Regarding Niss LaGoyim, it asks that the complex be transferred for renewed planning in the VATMAL, and regarding Kfar Shalem, that implementation of the projects be transferred to the private market under clear rules of compensation and building rights. According to the association, only a combination of fair compensation for residents and development viability can free the two complexes from the stagnation they have been in for decades. Tamir Hiziami, CEO of Halamish, said in response, “The company very much wants to evacuate and build Kfar Shalem. About two years ago, when I took up my post, together with the Tel Aviv municipality, we proposed a beneficial economic offer for the evacuation and compensation of the residents. We held several discussions in the Knesset Interior Committee, and presented the proposal to the Israel Lands Authority and the housing minister. Unfortunately, the Israel Lands Authority Council decided to freeze the improvement of the criteria, and thus Halamish has no ability to initiate an evacuation and compensation process for the residents.” The Housing Ministry said the plan is under the responsibility of the Israel Lands Authority. The Israel Lands Authority had not yet responded.
