Cities across Israel sign half-billion-shekel deal to fund urban renewal

Housing Ministry to finance infrastructure development — the streets, schools, services needed to serve a bigger population — in Ashdod, Jerusalem, Lod, Haifa and more

An ariel view of Haifa, January 17, 2021. Illustrative. (Matanya Tausig/Flash90)
An ariel view of Haifa, January 17, 2021. Illustrative. (Matanya Tausig/Flash90)

Aiming to fund the infrastructure necessary for redevelopment and the associated growth in population across the country, the Construction and Housing Ministry signed framework agreements with 12 mayors on Sunday aiming to provide about NIS 500 million ($156 million) to support urban renewal initiatives.

The 12 local authorities joining the program are Ashdod, Bet Shemesh, Bat Yam, Givatayim, Hadera, Haifa, Jerusalem, Lod, Netanya, Kiryat Ono, Kiryat Yam, and Ramat Gan.

In the past, urban renewal projects have been held up because of a lack of municipal funding to deliver the roads, schools, and community services needed to support private redevelopment. The framework agreements will ensure that the ministry’s Government Authority for Urban Renewal, set up in 2016, will help finance the infrastructure to support the implementation of large-scale urban renewal projects, and the needs arising from them.

By putting in place support of this kind, the ministry expects municipalities to move forward with proposed urban renewal projects.

Construction and Housing Minister Ze’ev Elkin described the agreement as “a breakthrough” and said he believes the funding will substantially increase the supply of apartments and help “turn old and dangerous neighborhoods into modern and safe ones.”

“We are removing one of the main barriers that hindered project advancement by providing a budget for necessary infrastructure development,” said the minister in a government announcement (Hebrew). “These agreements will lead to tremendous growth in the supply of apartments and will turn old and dangerous neighborhoods into modern and safe ones.”

When a municipality approves building permits for an urban renewal project, it will be entitled to claim the entire or partial amount from the central fund based on the number of residential units that will be made available for housing.

Cities will receive NIS 25,000-NIS 30,000 ($7,800-$9,400) per housing unit, which must be allocated to infrastructure projects directly related to the overall urban renewal development for which it is claimed.

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