Urban Renewal Gap: Only 16.7% of Planned Housing Units Reached Implementation
A new study reveals that nearly half of Israel's urban renewal neighborhoods show under 10% implementation, highlighting a wide gap between planning and actual construction.
A comprehensive analysis of 381 urban renewal neighborhoods reveals a significant gap between planning potential and actual implementation: in nearly half of these neighborhoods, the implementation rate does not exceed 10%, while only 13 neighborhoods have achieved 60% or more of their renewal potential. At the top of the list are Ramat Eshkol in Jerusalem, with an implementation rate of 91.6%, and the HaRishonim neighborhood in Ramat Gan, at 87.8%.
The study, conducted by Nadlan Center and Madlan ahead of the annual urban renewal summit, examined the status of 381 neighborhoods across 54 cities as of January 2026. In total, the surveyed neighborhoods encompass approximately 1.21 million housing units designated for urban renewal. However, only 201,717 housing units—16.7%—are currently in one of the implementation stages: 64,607 units are at the permit application stage, 39,616 have received building permits, and 97,494 have already been completed and occupied.
The Gap Between Planning and Construction
The data highlight a persistent disparity between planning momentum and on-the-ground progress. In 2025, plans for a record ~76,000 housing units were approved, yet the number of building permits stood at only ~28,900 apartments, with permit issuance on a downward trend. In recent years, the state has attempted to reduce bureaucratic bottlenecks, including new framework agreements totaling 210 million shekels to incentivize local authorities to accelerate permit issuance, as well as over 1 billion shekels allocated for planning and subsidizing pinui-binui (evacuation-construction) projects in the periphery.
Despite these efforts, the chasm between approved plans and actual construction remains wide. Factors contributing to this lag include uncertainty regarding public obligations, levies, and timetables, which complicate project advancement even after formal plan approval.
High Prices and Strong Populations
Disparities are also stark across cities. Raanana leads in average implementation rate at 34.7%, followed closely by Ramat Gan at 32%. Conversely, Beit Shemesh records an implementation rate of just 6.8%, and Bnei Brak stands at 7.5%.
In Tel Aviv, where 54 neighborhoods were examined, the average implementation rate reaches 23.6%, outperforming the national average. Nonetheless, internal city variations are pronounced. In Neve Golan, Jaffa, the implementation rate is approximately 72%, and in the northern part of the New North it hits ~70%. In contrast, Kfar Shalem, home to some 10,000 housing units, records a mere 3.2% implementation rate. In Neve Sharet, the rate stands at 38.2%, with about 30% of the potential already occupied.
"The neighborhoods where urban renewal is progressing are typically those with relatively high apartment prices and a strong population, ensuring higher economic viability for developers," noted Tal Koppel, CEO of Madlan.
Koppel explained that in lower-priced neighborhoods, the primary engine for renewal is large-scale pinui-binui projects rather than single-building interventions. He added that unfulfilled potential stems from complex land ownership issues, musha (joint property), opposition to high-rise construction, and holdout tenants.
The Importance of Planning Certainty
Dan Kachanovsky, CEO and owner of Nadlan Center, pointed out that most neighborhoods exceeding the 60% implementation threshold are located in or near prime demand areas, where land values guarantee economic feasibility without government subsidies.
"The most critical parameter is that all of these areas enjoy a high level of planning certainty," Kachanovsky stated. "Where developers and apartment owners clearly understood what is permissible to build, projects multiplied."
