Bauhaus, or My House? Historic Preservation Rules Fuel a Revolt

Tel Aviv designates building historic and then charges the owners an improvement tax for the honor

Eyal Toueg

Tel Aviv is proud of its architectural heritage, which is due in large part to the wave of German architects who fled to Palestine in the 1930s after the Nazi rise to power. The uniqueness of the city’s stock of so-called Bauhaus buildings, with their trademark white facades and spare angular lines, was confirmed by United Nations Educational, Scientific and Cultural Organization when it designated many of the older parts of the White City a world heritage site in 2003.

Although many of the city’s Bauhaus buildings are crumbling, numerous others have been restored in recent years. The municipality has taken a number of steps, some in conjunction with UNESCO itself, to preserve this architectural heritage.

But as much as preservation policies have pleased historians, sightseers and architects, owners complain they are being unfairly forced to bear the huge costs and draconian restrictions that dictate the kind of changes they can make to their own properties.

In 2008, the municipality initiated a plan through which about 1,000 buildings in the city have been designated as having historic architectural value. One would think that would be a source of pride to the buildings’ owners, but instead dozens of suits have been filed seeking about 2.4 billion shekels ($694.2 million) in compensation for a drop in their buildings’ value.

A particular bone of contention is the city’s claim that the very inclusion of a particular property on the historic preservation list boosts the property’s value, although it also imposes limitations that make the buildings’ renovation more expensive at times.

Mazal Tov: We’ve raised your taxes

Ofer Toister, a lawyer who represents the owners of historic buildings, says the municipality is demanding payment for half of the increased value brought about by the designation. The municipality didn’t build or upgrade the buildings, so there’s no reason why it should be entitled to an improvement tax for designating a building a historic structure, he says.

“Around the world, property owners who have gotten preservation designations are encouraged through benefits such as reduced municipal taxes, while in Israel those on the list end up paying a penalty even though they’re not given the choice of whether they want to be on the list,” Toister says. “The city is claiming that the designation adds about 6% to property values. In a 12-unit apartment building worth 30 million shekels that’s 1.8 million shekels just for the designation.”

Designated building on Tel Aviv’s Bialik Street.Photo by Ariel Shalit

But Dana Shichor, the director of the improvement and appraisal department at the municipality, takes exception with that view. “It’s like art,” she says, asserting that the designation creates a limited edition of rare and important buildings. There won’t be a second list. “People are prepared to pay for products from the closed list,” she says. “These are original assets and you cannot build new buildings that are similar to the originals. They can never be duplicated.”

Shichor cites the example of a 100-square meter apartment on Pinsker Street that was sold for 6.5 million shekels. “The man who bought the apartment in that particular building wanted an apartment in a designated building. It’s new and not everyone appreciates it,” she notes. When such apartments are advertised for sale, the historic preservation designation is frequently noted, which she interprets as meaning the market sees it as an asset, not a liability.

For those challenging the city’s tax assessment, the first stage in the complaint is handled by a Justice Ministry appraiser. A review of 40 such cases reveals that the city was found to be owed on average just 38% of the improvement tax it had initially claimed.

But Toister says there is an ethical problem with the program in that the designation is frequently made against the will of the owners, who have no way of reversing the decision. He claims that hundreds have asked to have the designation removed while only one property owner has asked to be added to the list.

Neighborhood master plans also have economic implications in Tel Aviv. One such plan for the center of Tel Aviv approved last week by the district planning and building committee is no exception. It’s actually two separate plans which set the future course for areas designated as districts 3 and 4, which constitute much of the oldest part of the city. District 3 in particular has a large stock of Bauhaus buildings.

The first goal of the new “districts” or “revaim” plan is “to encourage urban renewal in the city center while preserving the existing characteristics of the [urban] fabric.” That hints at one feature of the plan, which would set the maximum number of housing units that would be added to those parts of the city without doing damage to the historic nature of the Bauhaus area.

The new plan

The plan provides for the addition of 6,500 housing units, but places limits that would deprive developers of the economic feasibility of Tama 38 projects and other urban development initiatives. Tama 38, which is the Hebrew acronym for National Master Plan 38, is a program that allows residential buildings to sell developers the right to build additional units, usually on top of the existing structure, in return for other improvements in the building, including reinforcement against earthquakes. But in Tel Aviv the benefit of the reinforcement clashes with the interest of preserving the original appearance of historic buildings.

Districts 3 and 4 run roughly from Yarkon Park in the north to Bograshov, Ben-Tzion Blvd. and Marmorek Streets in the south. Most of the heritage area declared by UNESCO as the so-called “White City” (due to the color of the façade of the buildings) is in District 3, south of Arlosoroff Street. The plan would allow the construction of 4,000 housing units in addition to the existing 36,000 in District 3.

The goal of the “districts” plan is to impose a sense of order on urban planning by designating maximum construction limits with respect to existing and new buildings. It is also designed to simplify the planning process and replace layers of existing planning procedures. But UNESCO’s demand that existing building heights be maintained sometimes comes into conflict with Tama 38.

For her part, Orly Erel, who directs the planning department at the Tel Aviv Municipality said the goal of the “districts” plan has been to develop a blueprint that would make it clear to anyone seeking a building permit what can and cannot be built there. She said previously only the experts could unravel the layers of provisions covering a particular location, but the new plan actually makes building rights that were conditioned on further approval automatic in Districts 3 and 4. She cites, for example, the previous need to prove that a building needs reinforcement, so now there is greater economic certainty in planning in these districts. “They need to go through the local [planning] committee and take out building permits, but it’s a relatively fast process,” she said, “and doesn’t require [inviting] objections from neighbors,” she explained.

In addition, Erel said, the plan includes a preference for tearing down old structures in need of reinforcement, rather than the Tama 38 approach of providing incentives for building additions. The plan encourages developers to demolish the old and build anew, because new buildings have stronger foundations and also enable the inclusion of underground parking, the installation of elevators and other new infrastructure.

Nonetheless, city hall is committed to abide by the historic preservation limitations imposed by UNESCO when it designated Tel Aviv the “White City.” The new plan for Districts 3 and 4 preserves a hierarchy among thoroughfares, with streets designated as main streets, secondary roads or interior streets. It permits taller buildings on main streets of seven and a half to eight and a half stories and six and a half on secondary roads, in the case of demolition and new construction. (Half stories are additions to the roofs of buildings and are set back from the building facades.)

The plan calls for allowing the addition of a floor and a half to building heights in the center of the city, but contractors working on Tama 38 projects say it’s barely enough to fund the construction of an addition on the roof of an existing structure to reinforce it against earthquakes. The story and a half is a compromise that was reached between the city and UNESCO representatives, who initially were opposed to any upward building additions. The need to shore up the buildings and to add security rooms within each apartment unit, resulted in the compromise.

As Toister sees it, the city’s approach is misguided. “The municipality wants the UNESCO designation, but the property owners are paying the price. Someone who has a building in District 3 is being relegated to not being able to demolish and rebuild,” he said. “The buildings in Tel Aviv were built with the cheapest common materials that there were in the 1950s. Even if a 60-year-old building is reinforced, it’s still 60-years old. It’s just Botox. It doesn’t make it young.”

Eyal Toueg