Israel's Novel Solution to Housing Shortage: Build Underground

The plan could also see malls, movie theaters, sports stadiums and offices built under the under the ground

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One of many construction sites in southern Tel Aviv suburb of Florentin
One of many construction sites in southern Tel Aviv suburb of Florentin Credit: Tomer Appelbaum
Adi Cohen

Israel’s limited land reserves and its growing housing needs are pushing planning authorities to look for creative solutions - this time, under the ground. The country has been formulating a national plan for underground development, known as Tama 40, in a bid to push developers to plan underground facilities that go far beyond parking lots.

The plan, which has been in development over the past two years in keeping with a National Planning Board decision, was due to be submitted to a national planning subcommittee on Tuesday.

Among other clauses, the plan may mandate that developers build downward for projects in Israel’s biggest cities. Developments such as malls, movie theaters, sports stadiums and offices could all be underground, under the new plan.

Initially the plan will require local authorities to draft policies to define plots with underground development potential, as well as the extent of building and potential uses. The government is considering requiring contractors to build downward as a condition for building upward in developments in dense cities.

The authorities will also be asked to mark built-up areas with underground development potential such as above-ground parking lots, movie theaters and event halls.

The state is also considering requiring underground construction as part of urban renewal projects. Underground space could be counted toward the projects’ public space quota. This would free the above-ground meterage for other uses, such as housing, making the projects more profitable, the planning authority said.

The plan offers a list of use for space that could be moved underground, in keeping with each site’s location. This includes storage and logistic space, parking lots, public institutions, sports facilities, commercial space and offices.

It also lists underground infrastructure and cemeteries as potential uses, stating that new cemeteries and expansions of existing cemeteries will be underground, and burials will be stacked. Infrastructure will be concentrated in tunnels built for this purpose, potentially freeing up hundreds of thousands of dunams above ground.

The psychological barrier

Tamar 40 should have far-reaching impacts on the real estate market. Implementing underground construction also necessitates a financial security net, to ensure that building downward does not make projects unviable, delay them or make the apartments above ground more expensive. Planning authority sources say they are addressing this by including tax benefits and loans within the plan, but these steps have not yet been discussed with the Finance Ministry or the Tax Authority, which would need to approve them.

A Planning Authority survey regarding building costs andy future profits from underground construction found that it typically costs 15% extra to build beneath the ground as opposed to above it. But the cost of underground construction is about on par with that of building towers, and possibly even less expensive. The main difference in cost is due to the profitability of each form of construction, as underground rental space may go for as much as 60% less than identical above-ground space.

Yigal Govrim, chairman of the Israeli Association of Construction and Infrastructure EngineersCredit: Meged Gozani

Yigal Govrim, chairman of the Israeli Association of Construction and Infrastructure Engineers says that contrary to prevailing opinions, it’s not necessarily more expensive to build underground. Certain aspects of maintenance are also cheaper underground, he says. Regarding the lower prices that underground spaces command, he says, “the more spaces there are like this, the psychological barrier will ease, and underground spaces won’t necessarily be cheaper.”

The plan also addresses bureaucratic hurdles, and allows for speeding up the approval process in some cases.

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