Developer Wins Long-Term Rental Housing Tender After Series of Failures

Yaki Reisner, owner of Reisdor Company, has won a tender for land designated for long-term rental housing in Yavne. Under the tender's conditions, Reisner will construct 104 apartments in the complex. He paid approximately NIS 10.2 million for the land, with development costs estimated at NIS 27.6 million, resulting in a cost of about NIS 364,000 per unit. This success comes despite a general downturn in Israel's rental housing market and insufficient tenders being marketed by the Israel Land Authority (ILA) and "Dirah LeHaskir" (Apartment for Rent) company. While the Planning Administration's land marketing also plays a role, the ILA has struggled to market sufficient land for both sale and long-term rental.

The Yavne tender is relatively small. Earlier this month, a tender for 128 apartments in Nahariya failed to attract any bidders. The Nahariya project stipulated that apartments would be rented for 15 years, with 50% offered at reduced rents to eligible individuals and the remainder for the open market. The failure to market rental units is significant given rising rental prices due to low supply, with some cities experiencing a 43% decrease in available rental units. As interest rates fall, more people opt to buy, widening the gap between demand for apartments and demand for rentals.

This is not the only recent failure in long-term rental housing tenders. A tender for 96 units in Jaljulia also failed, as did a tender for 196 units in Be'er Sheva's HaRikpot neighborhood in March. A tender for 180 rental apartments in Tel Aviv, scheduled for October, was canceled.