While housing construction in Israel often addresses bigger households, with the demand for four-room (three bedrooms) and five-room dwellings (four bedrooms) higher than studio or two-room units, there is still important demand for smaller apartments.
Households of one or two people made up about 45% of all Israeli households in 2020 — the rest were households of three or more persons with the majority of households housing five people or more. And while Israel’s “dizzying” population growth rate is a contributing factor to the housing crisis and the increased demand, the housing market should take into account the need for smaller households.
Since the beginning of the year, new construction projects appear to signal an understanding of this demand.
Building starts across the country including smaller apartments, units for those with special requirements, and housing specifically designated for long-term rentals.
There is a substantial shortage of homes to rent, particularly in the center of the country, with most rental apartments owned by private landlords who hold on to them for only a limited period of time, and operate in ways that can affect the stability and financial health of those unable to get on the housing ladder. It has become increasingly clear that a key element in fixing the housing market is delivering long-term rentals.
Recently announced building plans in Ramle, Beer Yaakov, Ashdod, Ramat Gan, and Jerusalem, and proposed development in Kiryat Gat are all seeking to incorporate non-standard homes into the projects that are getting approved.
Finance Minister Avigdor Liberman has repeatedly said that the government will seek to manage house prices by building to meet demand. This will only be possible if bureaucratic delays in the planning and building process can be addressed, and if plans are developed to include infrastructure alongside homes.
New housing projects do seem to be more numerous and moving faster, partly down to the fast-track planning committee known by its Hebrew initials as Vatmal, the Committee for Preferred Housing Sites, which approves large building plans. The committee was founded more than a decade ago and had its mandate renewed for a further four years last July.
The Vatmal recently approved new construction in the central city of Ramle, which will see a renewal of the 1950s Sprintzak neighborhood with an 18-story office and residential tower, as well as a number of five to nine-floor buildings. About 20% of the total (122 housing units) will be small apartments of one to two rooms, and 30 units will be reserved for long-term rentals. The area also includes five buildings that date to the British Mandate period, two of which will be preserved under the scheme and used to provide business and community space.
Plans for a new neighborhood in Beer Yaakov seem to also be moving along. Backed by the Israel Land Authority together with the municipality, a plan called Complex 5 will build out the town to the West, close to the Ness Ziona interchange. The 312 dunams projected will see about 1,900 housing units built, around 300 of them under the “special housing” category (such as for students, elderly people, and people with special needs), 81,000 square meters (96,875 square yards) for schools, kindergartens, and public buildings, and around 10,000 square meters (11,960 square yards) of office space, as well as a park.
Meanwhile, in Ashdod, plans have moved forward for the evacuation and rebuilding of the Steel Complex in the city’s eighth district. According to local media reports, an area of 155 dunams (38 acres) will be used to deliver 1,400 new units in 11 buildings, with six towers between 14 and 30 floors and the remaining buildings up to ten floors. About 30% of the apartments (430) will be smaller units, in a development that will also include public buildings and commercial and office space. The redevelopment will add almost 1,100 homes to the area through increased density. The city also recently published a tender for a further 191 apartments for long-term rental.
In the Shikun HaRofeim area, around the Tel HaShomer Hospital at the Sheba Medical Center in Ramat Gan, about 600 new apartments have been approved for hospital staff as part of plans for 2,260 housing units in an area close to planned light rail and metro stations according to local Hebrew-language media.
About half of the overall units in development have been designated for long-term and permanent rental apartments. These housing units will be owned and managed as a single entity by Dira Lehashkir, a government company established to boost the country’s supply of rental housing units. Dira Lehashkir CEO Inbal David told local media that the plan in Shikun HaRofeim, “will deliver housing units in the center of an area of high demand, the vast majority of which are intended for long-term rental.”
In Jerusalem, the Israel Land Authority has confirmed that on Mount Scopus, there is too much university dormitory capacity, and that space would be better re-developed. Plans will affect the Bronfman, Resnick and HaArazim buildings, and provide around 1,800 homes, including some sheltered housing, alongside 11,000 square meters (13,156 square yards) of commercial space and 16,000 square meters (19,136 square yards) of offices. Preserving views and existing trees have also been prioritized.
Jerusalem’s Municipal Planning Committee has also given the go-ahead for rezoning in Givat Shaul, in a change that would allow up to 25% of the land to be used for residential purposes, with a further 25% for hotels. There is potential for 1,500 new homes in the area, assuming interest from developers.
And in the southern city of Kiryat Gat, discussions are underway to build a whole new neighborhood covering 1,856 dunams (459 acres) with 6,000 new homes. According to the proposal, about 500 of these units should be designated for people with disabilities, 30% for large apartments of more than 120 square meters (144 square yards), 30% for medium-sized apartments, up to 120 square meters, and 25% for smaller apartments up to 80 square meters (96 square yards). including 10% sized up to 55 square meters (66 square yards), and 5% “micro-apartments” of up to 23 square meters (28 square yards).
This latest round of announcements suggests growing recognition that a range of different types of property is needed, at different price points and for different types of households. These are important changes that can help to create long-term housing for a diverse population at more affordable prices.