Updated: October 2026 · e-land editorial team
Disclaimer: The information in this article is general, correct as of the update date, and does not constitute legal, planning or investment advice. Before making decisions, we recommend consulting an attorney who specializes in urban renewal.
Hundreds of thousands of apartments in Israel are in buildings built before the 1980s: no safe room, no elevator and no parking, and sometimes without sufficient earthquake resistance. Urban renewal is the way to turn these buildings into new ones, and it is also one of the biggest opportunities in the Israeli real estate market, for apartment owners and investors alike.
What is urban renewal?
Urban renewal is an umbrella term for projects that renew old buildings and neighborhoods: strengthening, expansion, or demolition and reconstruction. The mechanism is usually similar: the State or the municipality approves additional building rights, the developer sells the new apartments added, and the profit finances the construction for the existing apartment owners. In this way, the owners receive a new or upgraded apartment without paying for the construction.
The tracks today (2026)
- Pinui Binui (evacuation and reconstruction): demolition of an entire building or compound and construction of new, taller buildings. This is now the main urban renewal track. The complete guide to Pinui Binui.
- The Shaked Alternative: the track that replaced the national TAMA 38, focusing mainly on the demolition and reconstruction of a single building. What remains of TAMA 38 and what replaced it.
- Municipal plans: many cities have prepared their own renewal plans, in which the local plan determines what may be built.
What do apartment owners receive?
Usually: a new, larger apartment with a safe room, balcony and parking, rent for the construction period, and an attorney and appraiser on behalf of the residents, financed by the developer. In most cases the value of the property also rises significantly. The exact consideration is determined by negotiation, so it is worth organizing early and acting as a group.
The investor's angle: buying an apartment in a building slated for renewal
Many investors buy old apartments in areas with renewal potential, expecting to receive a new apartment in the future that is worth much more. When it succeeds, this is one of the most profitable deals in the market. To do it right, check:
- What stage the project is at: an idea, a signed agreement, an approved plan or a building permit. The more advanced the project, the higher the certainty – and the price.
- How many residents have already signed, and whether there is a sufficient majority under the law.
- Who the developer is: projects completed and financial strength.
- Timetables: such projects usually last many years. You need to be financially prepared for this.
- What the agreement says about someone who buys the apartment later on, and whether the buyer steps into the seller's shoes.
Who is involved in the project?
The Governmental Authority for Urban Renewal promotes and accompanies projects and publishes information for the public. The local authority approves plans and permits. The developer plans, finances and builds. And the apartment owners hold the rights in the land – without their consent, the project does not get off the ground.
Disclaimer: The information in this article is general, correct as of the update date, and does not constitute legal, planning or investment advice. Before making decisions, we recommend consulting an attorney who specializes in urban renewal.
For additional official information: the website of the Governmental Authority for Urban Renewal on gov.il.
