At the end of 2024, the real estate sector in Israel received news that it had been waiting for for a long time: after almost five years, the National Planning and Building Council approved National Plan No. 70 covering the areas surrounding the metro stations in Gush Dan. The plan specifies building rights along the planned metro route, and allows development in areas adjacent to it.
Meanwhile, other measures associated with the metro, such as determining the high improvement tax that will be applied to surrounding areas, have progressed and created a great deal of uncertainty. The approval of the National Council for Planning and Building, although it requires government approval to be absolute, provides the required certainty and allows the market to understand the rules of development on the huge area of approximately 118 thousand acres around the metro.
The national outline identifies 70 “areas of influence” for each metro station, divided into three: the core area, up to about 100 meters from the entrance to each station; First Ring, from the edge of the core area to about 300 meters from the station; The second ring starts from the edge of the first ring to 800 meters (600 meters in some stations) from the center of the station. The plan specifies development rules and building rights for each area, according to the plan’s “zoning designation,” which determines the mix of uses in each area of influence.
1. Market certainty
“The metro is an urban event. It is much more than just transportation routes,” says Adv. Erez Kamenetz, head of the government and regulatory practice at the law firm Erdinast, Ben Nathan, Toledano & Co. “National Plan 70 takes 109 stations along the route and creates a general plan for them, which from now on will allow detailed planning to upgrade the areas surrounding the stations and turn them into urban attraction centers. The carrying capacity will create greater urban density through the metro, and will enable the creation of a new urban environment.” With less traffic, fewer cars, and greater use of public transportation.
“The approval of National Plan No. 70 provides the certainty that everyone has been waiting for,” the lawyer adds. Sagiv Hanin, co-leader of the planning and construction practice at Goldfarb Gross Seligman & Co. “The approval amounts to the final definition of the influence zones of the metro stations, from which the building density that will be allowed around each is derived. Planning has already been done according to these principles, but now it has been formally defined by the National Council, it will provide certainty.”
2. Incentive: Reduced improvement tax
On the face of it, the approval of National Plan 70 should attract developers to the areas surrounding the metro, now that the rules have finally been clarified. For a long time this did not happen, although the state hoped it would turn out otherwise, and the area around the metro line was not developed at a high rate, mainly due to high taxes, which made development financially unviable. Last June, an amendment to the metro law stipulated a 15% reduction in the “metro improvement tax” along the metro route for any developer applying for a building permit by the end of 2030. National Structural Plan 70 must be approved as an important piece of this puzzle. That pushes developers to get started and work against the clock to get a permit.
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For this to happen, it is necessary to move to the next stage: the stage of detailed plans along the metro line. National Plan No. 70 is a general plan, and is not a basis for issuing building permits, so detailed plans must be drawn up for the perimeter of each station. Once approved, it will be possible to apply for a building permit to take advantage of the reduced improvement tax rate, but this will not be simple at all.
Adv says. “Metro Betterment Levy is a good incentive, but only for developers who are already somewhat prepared.” nostalgia. “Those who are familiar with the route and the environment, and who are active in the areas of influence, will certainly be able to move forward, and will be able to apply for a permit within the specified timetable.”
3. Challenge: Tel Aviv
All the while, many in the market argued that the detailed National Plan No. 70 did not grant sufficient building rights, certainly given the heavy taxes. Despite the tax incentives, there are still those who claim that this is the case. The claims come mainly from developers, who of course have a clear interest in obtaining greater building rights, but their claims should be taken into account in relation to one specific city: Tel Aviv.
The developers essentially claim that Tel Aviv’s National Outline Plan 70 provides fewer building rights than the Urban Outline Plan TA/5000, which is currently in place, and TA/5500, an update to the existing plan, which is in the process of being drafted.
National Outline 70 and the Tel Aviv Plan grant rights based on land area divided by land area. If the area of a plot of land is 1000 square metres, and the ratio of floor area to floor area is 4, then the building rights will be 4000 square metres. The developers claim that while the Tel Aviv plan offers a ratio of 12, and even 15 in certain places, the highest floor area to floor area ratio in the National Outline 70 is only nine.
But National Plan No. 70 stipulates that this percentage is the minimum, and in the final amendments to it the possibility of an incentive to increase it was added. For every single addition to the ratio, the District Planning and Building Committee will be able to increase the area allocated for non-residential use by 5%, in accordance with planning needs, which should work in the interest of local authorities. There are those who claim that even this is not enough.
“Developers we talked to, certainly in Tel Aviv, say there is no good news in terms of floor-to-floor area in the case of many of the stations in Tel Aviv,” Kamenetz says. “The detailed national plan talks about a minimum, and the concept is that it would certainly be possible to increase the percentage after a more detailed examination, but the developers say that this is just an illusion, and that the local authority will not allow the percentage to be increased. Increased rights except for places served by that as well, I certainly see “A problem in Tel Aviv, and here in particular the development around the metro is the most challenging and on the other hand, this means that outside Tel Aviv it can be very important news.”
4. Private landowners
The spheres of influence around metro stations cover a large amount of land and many assets are privately owned by people who are not necessarily developers planning to redevelop the land. The metro will pass through 24 local authorities, from Rehovot in the south to Raanana in the north, and along the way there will be many private sector owners who will also need to understand how the approval of National Plan No. 70 will affect them.
“The owner of an asset located in the metro’s area of influence must be aware of the planning information provided to him by National Plan 70,” says Hanin. “If I live in a neighborhood with houses with gardens, for example, it is very important that I know what building density will be allowed, even if I don’t plan to do anything myself. If I live in an old building in a zoning area, and I have set up Its eyes are urban renewal, I need to understand the planning potential; if I plan to buy or sell an asset, or embark on some real estate initiative, I have to familiarize myself with it and study the relevant planning information in the 70th National Detailed Plan.”
Published by Globes, Israel Business News – en.globes.co.il – on January 12, 2025.
© Copyright Globes Publisher Itonut (1983) Ltd., 2025.
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