Revision 101 of the Planning and Construction Law

In mid-2015, a reform meant to make processes of planning, construction and licensing with local authorities and committees in Israel more efficient, has entered into effect. Such reform generated Revision 101 of the Planning and Construction Law, meant to increase the powers of local committees, grant exemption from needing a construction permit in certain types of construction, and also to ease the development and establishment of affordable housing.

Both the reform and the revision were conceived as aforesaid to assist the public in dealing with local committees and authorities; however, there are quite a few critics who claim that in practice, the revision does the exact opposite. In this article, we will review the arguments for and against the reform, and examine whether and where obstacles might form.

Revision background and purpose

In mid-2015, Revision 101 of the Planning and Construction Law, 5725-1965 (herein: “Law”) has entered into effect, as part of a reform initiated by the Israeli government for the purpose of optimizing and simplifying planning, construction and licensing processes in Israel.

The reform, according to the Ministry of Interior, does not amount to just reducing bureaucracy, rather in fact constitutes a direct extension and realization of the Ziler Report’s conclusions, prepared after the Versailles disaster, which led the government to call for promoting processes that will significantly improve construction quality in Israel, while optimizing, reducing and simplifying the processes toward developing a construction culture in Israel.

In practice, the reform focuses on 3 principle issues: increasing the powers of local committees, cancelling the need for issuing a construction permit for the construction types specified in the permit exemption regulations[1] (herein: “Regulations”) and charging the State with budgeting and setting goals for affordable housing.

Revision Principles

In planning, the revision transferred many of the district committee powers to the local committees, now called “independent committees”, whereby the reason behind their establishment is that local committees have the best tools and highest interest to promote construction in their area.

The independent committees received extensive powers in the Revision, such as approving plans that add construction areas or change the real estate’s designation, expanding existing residential units, increasing the number of residential units, providing an addition of 40% to employment or hoteliery and many other powers. Moreover, the Revision included the establishment of a “special independent local committee”, which may deal with two additional fields; clearing & development and urban renewal.

Furthermore in planning, revision 101 emphasized the simplification of processes with local committees and authorities, therefore, strict dates have been set for receiving the required approvals and permits. The Revision furthermore specified that missing the certain set dates will bring about the automatic approval of the plan or application.

In licensing, revision 101 determined three licensing programs: an exemption program, a fast-licensing program and a full-licensing program. In the exemption program, the aforesaid exemption will be given to items that the construction of which will not pose a disturbance to public areas according to the regulations (for example, storage room up to 6 sq.m, pergola up to 50 sq.m, awnings, etc.). In the fast-licensing program, construction additions with no risk or real disturbance according to the regulations will be allowed (for example, construction additions up to 25 sq.m, construction on roofs, adding or closing a porch etc.). And eventually, in the full-licensing program, all other permits will be included.

In affordable housing, Revision 101 granted incentives to long-term lease housing, among others by providing a “closed package” of additional construction rights, given gradually in accordance with rights approved in the area.

Advantages and Disadvantages

It is quite possible that in an extensive reform such as the one that led to Revision 101, there are both advantages and disadvantages, regularly discussed by the media, practitioners (lawyers, engineers, entrepreneurs, asset owners etc.) and by the government itself.

As part of the advantages inherent in the reform and revision, the clear advantage of optimizing the cluttered bureaucracy and expansive timeframes which were common so far in the planning and construction committees, stands in the lead. If the revision is indeed implemented effectively, its impact on the principle of certainty and transparency for application submitters will be enormous, and will constitute a blessed change. Moreover, establishing the independent committees (which are subject to strict timeframes) might also assist in solving the housing crisis that exists in Israel in recent years, since by force of the Revision a special independent committee will also be established and will discuss affordable housing, and plans of clearing & development and urban renewal, which assist in solving the distress.

Another advantage to the reform is that the revision acts as a real estate betterment tool. Before the revision, it could take even longer than ten years to approve a plan for establishing a new neighborhood. Now, as a result of reducing handling times and the developing accessibility, and also due to the addition of powers to local committees, new and fascinating possibilities are being opened to better the real estate in programs under the power of the local committee, and that is either by way of adding construction areas to existing lots or structures, or by changing the real estate’s designation, and all during a short period of time.

However, and despite the Revision’s multiple advantages, there are quite a few critics who claim that the reform will bring more clutter and confusion than benefit. The reason is that imposing all of those powers on local committees and making them independent will in fact only perpetuate their existing overload, and will not optimize the planning and licensing processes. These critics claim that resources must be poured into adding manpower to the existing local committees.

The critics further argue that the public is not proficient enough in the reform’s provisions, so that in practice the public misuses the advantages offered by them. For example, a large part of the public increasingly realizes the option of constructing without a permit (under the exemption program), but in practice is unaware of his obligation to update the local authority on the construction he had established. Therefore, many people first construct and only then notify, if at all, and therefore many cases like these end up in deliberations of the citizen and the authority before the courts, whereupon only then it is discovered if an exemption applies or not. Thus, an absurd situation has been created in which the revision, instead of optimizing and simplifying the licensing and planning processes, in fact increases the miscommunication and clutter between the public and local committees.

Summary

There is no doubt that the advantages inherent in the Revision are many and inasmuch as it is implemented properly, it is a blessing that can make it easier for everyone. However, it should be taken into serious consideration whether the powers and great significant responsibilities imposed by the Revision on the bodies specified therein will indeed lead to decisions of value and benefit, or whether it will have the opposite result that could impact all of us in the coming years.