TEG urban renewal

Build on our advantages

The experience, professionalism and financial strength of TEG URBAN RENEWAL provides customers with unique advantages in this area, and its arrangement is the safest, most efficient and most convenient in urban renewal today.

TEG URBAN RENEWAL is the executive arm of TEG ISRAEL in urban renewal projects.
In 2023, the company acquired 33% of the shares of Erez Tirosh (formerly Naot Maccabim) – a private real estate company with 30 years of experience in residential entrepreneurship and project marketing, successfully constructing and handing over more than 1000 housing units throughout Israel. The combination of Erez Tirosh’s financial strength and professionalism together with TEG Urban Renewal’s creative solutions and innovation in all project phases, provide a proven strategic advantage and solutions adapted to the Israeli urban renewal scene.

TEG URBAN RENEWAL is the executive arm of TEG ISRAEL in urban renewal projects.
In 2023, the company acquired 33% of the shares of Erez Tirosh (formerly Naot Maccabim) – a private real estate company with 30 years of experience in residential entrepreneurship and project marketing, successfully constructing and handing over more than 1000 housing units throughout Israel. The combination of Erez Tirosh’s financial strength and professionalism together with TEG Urban Renewal’s creative solutions and innovation in all project phases, provide a proven strategic advantage and solutions adapted to the Israeli urban renewal scene.

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What is urban renewal?

The types of urban renewal tracks in Israel

This format provides an incentive for urban renewal in the private market, supporting entrepreneurs and property owners to establish contact and promote plans to realize the project. Here, the announcement of a complex as suitable for a “Relocate-Renovate” project is limited to 6 years (with the possibility of an extension of another 6 years). The declaration provides tax benefits.

A TAMA 38 project can be carried out even on a single building with the aim of improving its resistance to earthquakes. The project is carried out by thickening the pillars and strengthening the entire existing building by adding exterior security rooms, or through demolition and rebuilding. Projects of this type are promoted using a relatively short procedure that requires the issuance of a building permit without the need for approval of a detailed plan, alongside a limited examination of planning and environmental aspects in the areas adjacent to the lot.

In this format, the local authority is the initiator of the project, the body that promotes the plans and the one that organizes the tenants and their participation in the process, with the support and funding of the governmental authority for urban renewal.
An application for a local authorities track is submitted to the Minister of Construction and Housing, who declares the complex as suitable for a “Relocate-Renovate” project for a period of 6 years (with the possibility of an extension for another 6 years). The declaration also provides tax benefits.

“Relocate-Renovate”
Advantages for owners and initiators

A “Relocate-Renovate” project is a win-win format. It allows all those who take part in it to enjoy a series of different advantages, with the biggest beneficiaries being the tenants – or rather, the apartment owners.
First, they get a new, bigger and more impressive apartment, valued much more than the previous apartment. The apartment will be safer to live in, due to the addition of the security room.
The entrepreneurs also enjoy many advantages, including the fact that they do not have to pay for the land, as well as the possibility to build 2 apartments in the new building for each unit in the old one.
These are just a few of the benefits and advantages in this sort of project.

Urban renewal is an opportunity for property owners to add protection to their apartments, improve their assets and their tenant’s quality of life, and upgrade the surrounding public spaces and infrastructure of the entire building. In an urban renewal project, the existing building is taken down and a new and fully-designed building is constructed in its place. The new building includes an elevator and significant landscaping, and apartments get a protective room, a sun terrace and more – all this at no cost to the property owners.

Carrying out any urban renewal project (especially “Relocate-Renovate” projects) is subject to the city building plan, under the decision authority of a district committee. When a “Relocate-Renovate” project is carried out in an existing neighborhood there is subsequently an impact on the surrounding infrastructure, therefore the construction is usually accompanied by upgrades to infrastructure and public areas.

In order to enable the process of a “Relocate-Renovate” project, the complex must be declared by the state as suitably designated. In general, “Relocate-Renovate” projects refer to entire complexes and must include a minimum of 24 units (as opposed to a demolition and construction project under TAMA 38/2, in which it is also possible to demolish and rebuild a single building with a small amount of apartments).

The consent of 80% of the apartment owners (the same as TAMA 38/2) is required In order to carry out a “Relocate-Renovate” process, compared to only 67% consent which is required in a TAMA 38/1 reinforcement project. This is an improvement from the 100% consent that was required at the beginning of the “Relocate-Renovate” program, which delayed and even caused the cancellation of many projects, so in 2006 the government lowered the required consent to 80%.
In October 2021, the Interior Committee approved (second and third call) an amendment to the “Relocate-Renovate” law, to reduce the majority required to only two-thirds (66%) of the apartment owners, when suing an apartment owner who does not agree to join the program. The approved amendment also added that apartment owners who have committed construction violations will not be included in the count of tenants required for a majority. In these cases, the rate of agreement can reach 50%.