Tel Aviv’s Old Central Areas to Get Face-lift

The city got a new master plan last week, meaning new apartments in taller buildings. But will developers have an incentive to build?

A typical four-story apartment block in Tel Aviv's 'old north' area.
Reshef Real Estate

It’s the part of Tel Aviv people tend to think of when they conjure up images of the city. White Bauhaus buildings with clean lines, and blocks and blocks of 1960s- and ’70s-era garden apartments built on pillars and with shaded terraces. Structures are low and the parking paltry, but the streets are studded by greenery.

Now, that quintessential part of Tel Aviv is about to get a face-lift that will see buildings go higher, if not replaced altogether, and denser housing than before.

That’s after a decision issued last week by the appeals subcommittee of the National Planning and Building Council, which will allow close to 6,000 new apartments to be added to the historic center of the city.

The ruling applies to what is formally known as Quarters 3 and 4, but popularly known as the “old north” and city center. The areas are bounded by Hayarkon Park in the north and separated lengthwise by Ibn Gabirol Street.

Quarter 4 is the newer area, covering 2,800 dunams (700 acres) east of Ibn Gabirol Street and bounded by Derekh Namir (street) to the west and Shaul Hamelech Street to the south. Quarter 3, with 2,400 dunams, lies between Ibn Gabirol Street and the sea, and its southern border is marked by Bograshov, Ben-Tzion and Marmorek streets.

The ruling is long and detailed, but the bottom line for residents is this: Quarter 4 is likely to be hit with an avalanche of proposals taking advantage of National Master Plan 38 (also known as Tama 38). Quarter 4 currently has some 18,500 apartments, a number that could grow to 20,500 or more. Quarter 3 could see the number of apartments grow from 36,000 to 40,000.

Tama 38 allows owner-tenants to reinforce their buildings against earthquakes, financed by building rights for additional floors that the contractor can then sell. The tenant-owners don’t pay for the reinforcement, which can also include upgrades like elevators or, in some cases, an additional room for each apartment.

Although both may typify Tel Aviv neighborhoods, the two quarters are very different places and face very different rules under the guidelines the planning authorities have approved.

The buildings in Quarter 3 are older than Quarter 4 and the lots are smaller, which limits building rights and the ability to add underground parking to new buildings (as is required under some sections of Tama 38). Most importantly, Quarter 3 south of Arlosoroff Street is part of the Unesco World Heritage Site, studded with Bauhaus-style buildings from the 1930s that have given Tel Aviv its moniker of “the White City.”

Proud of the designation, the city has imposed height restrictions in the area. The planning committee reduced the maximum number of floors that can be added to a building in Quarter 3 from two-and-a-half floors to just one and a half.

In Quarter 4, by contrast, a new building can be up to two-and-a-half stories higher than the one it replaces, but only one-and-a-half stories can be added on top of an existing building. That all adds up to a greater incentive to demolish and rebuild.

What this means is that Quarter 3’s renewal is likely to move head more slowly and be more modest than Quarter 4’s.

Undermining the whole principle

Anat Biran, whose law firm specializes in real estate and planning and represented some of the plan’s opponents, said planners went too far in trying to preserve the White City.

“Unfortunately, the decision doesn’t encourage demolition and rebuilding in the part of Quarter 3 that is beyond the Unesco-designated area,” she says, adding that the whole principle of Tama 38 – encouraging homeowners to earthquake-proofing their buildings – has been undermined.

But Larissa Koffman, head of the Central District planning department, takes issue with critics like Biran. She says large numbers of proposals have already been submitted to the city and are awaiting approval, although she admits they are mostly for Quarter 4.

“There’s a lot of activity in Quarter 4, mainly in demolition and construction. During the planning process, there was no freeze on building permits, but developers chose to wait and see if there would be any changes. The permits that were granted were issued in accordance with the master plan, so developers can now request new permits in accordance with easements made by the appeals committee.”

City hall is aware of the restrictions imposed on Quarter 3, but opted to come down on the side of preserving the Unesco designation at the price of urban renewal.

“There’s the option for adding to a building, instead of demolishing and building from scratch, demolition and construction, and this track is feasible in Quarter 3,” Koffman insists. “It is true that parking areas cannot be added on every property, but that’s the situation – it’s a crowded historic district.”

Yoav Krinski, an executive vice president at Acropolis Ventures, agrees and thinks it will be the residents who lose out.

“Quarter 3 is less economically viable – it’s more problematic. The pace of renewal there will be slower. In many cases, building an addition will be done instead of new construction. In the long term, something should have been done in order to allow for more demolition and rebuilding, because the final product is 10 times better than adding on. In the end, you are left with the historic ‘bones,’ with some of the old systems, and the issue of earthquake reinforcement is controversial.”

Will developers shy away from Quarter 3 because of that?

Krinski: “For small contractors, the niche of building additions is more suitable. It’s less of a financial investment and they can get the financial support. Quarter 4 will be suitable for bigger developers – they have the financial wherewithal for demolition and rebuilding projects.”

So, while in Quarter 3 the renewal process will be much slower, and will mainly involve reinforcing, renovating and expanding existing structures, in Quarter 4, most of these proposals are likely to involve razing existing buildings.

“The plans for Quarter 4 are economically viable, and I think there will be a lot of activity around Tama 38,” says Krinski, which has built more than 10 residential projects in Tel Aviv. “The engines and the interests that drive this forward are very big. As soon as one building is renovated, the building next door will want to do it, too. It is not a question of if, but when.”

Attorney Meital Toister-Rosenthal, whose firm Ofer Toister represented developers, property owners and the Chamber of Commerce in challenging the plan in the appeals subcommittee, faults the plan for relying too much on owner-tenants coming up with the financing for their buildings to be upgraded.

“The message there was that the plan would encourage urban renewal, but it’s difficult to organize a building with 12 apartment owners – certainly if they have to spend their own money to implement the project,” says Toister-Rosenthal.

“In Tama 38, the lure for tenants is that they don’t have to spend money from their own pockets ... it’s enough that one tenant refuses to pay his or her share, and the building won’t be renovated – and it’s not certain that he or she can be declared a recalcitrant tenant. Maybe he or she really cannot pay.”

Nevertheless, Toister-Rosenthal says she recognizes the value of the plan. “It’s neither easy nor friendly, but it freed the developers from the chaos of calculating [building] rights, for better or worse,” she said. “It is what it is. However, there is an architectural debate over whether it’s good or bad. Assigning building rights is by volume of space, so the architects know exactly what can be used within the lot. The downside when there is a box with a defined volume is that developers will refuse to give up a single square meter, and the design will end up being a cube.”

But Avi Hasson from the Anat Biran Law Office says the plan’s simplicity outweighs its deficits.

“This plan has solved many problems of the NMP, such as disputes over how to calculate building rights,” he says. “The quarters plan is based on volume There is no longer any debate over how to calculate floor space, because it’s based on the building lines set down in the plan ... It has simplified what’s permitted and what’s forbidden according to lot size, building lines and the number of floors permitted by region, location and the size of the street,” he sums up.