Friday, January 5, 2018

NMP38 -- The TAMA

Yair Assaf-Shapira

National Masterplan 38 (NMP38, or TAMA38) is a national plan with a double purpose – to reinforce old buildings and ensure their earthquake preparedness; and to contribute to urban renewal, by adding new apartments in built-up areas. The NMP38 allows for the possibility of constructing additional apartments, the sale of which finances the reinforcement of the building, the expansion of the existing apartments, and often the addition of an elevator and other improvements. When you visit Jerusalem neighborhoods, you may see projects being executed in the framework of NMP38, but not many of them. For instance, on the street where I live there is one completed NMP38 project, and on my way to the Jerusalem Institute I pass by two additional projects. Is the NMP38 in Jerusalem proceeding at a relatively slow rate? Not necessarily.

Extensive planning processes take long years to complete, and not only due to bureaucratic procedures and processes. In the case of NMP38, and especially in Jerusalem, it takes time until both home-owners and entrepreneurs are convinced that they are embarking on a worthwhile investment. Are the tenants and entrepreneurs convinced? What does the future hold for NMP38?

The Jerusalem Municipality publicizes urban renewal projects, among them NMP38 projects, on the municipal Geographic Information System (GIS) website. Among all the projects that received building permits – in other words, projects where construction has already begun, will begin soon, or has been completed – 75 projects were identified across the city, comprising the expansion of 720 existing apartments, which includes the addition of 510 apartments, in the framework of NMP38.

These projects were approved starting from the middle of 2011, which means they have been in progress for the past 6.3 years. Hence, every year, on average, about 81 apartments have been added via NMP38. And it is very likely that the pace will accelerate, for today there are 410 projects, at various stages of planning (they have yet to receive building permits), which include the addition of 3,550 new apartments. It turns out that on the street where I live five additional projects are planned, and that on my way to work I pass by another eight projects that are in different stages of planning.

NMP38 has one track for the reinforcement of existing buildings, and another track for demolishing and re-building. It is interesting to learn that about 51% of the additional apartments in the new projects (those in the initial planning stages) are now on the demolish-and-re-build track, as opposed to 30% of the apartments that have received building permits over the years. It appears that NMP38 in general, and the demolish-and-rebuild track in particular, have won over the tenants and the entrepreneurs.

The highest prevalence of the NMP38 project is in the Rehavia neighborhood (33 projects of which 16 are in the initial planning stages). This fact provides food for thought, for it is in this neighborhood, where a detailed and up-to-date Master Plan exists, where the behavior of the public clearly demonstrates a preference is for NMP38, which by its nature does not include comprehensive neighborhood thinking, but focuses solely on the individual building.

UPDATE: According to data received from Moria, as of the beginning of January 2018, the up-to-date data is as follows: So far, 101 building permits have been issued in the framework or NMP38, adding 832 apartments. During the year 2017 alone, 38 permits have been issued, adding as many as 426 apartments. This means that more than half of the apartments added in Jerusalem by NMP38, were added in 2017.

Translation: Gilah Kahn

Friday, December 22, 2017

A Secondhand Car from Jerusalem?

Lior Regev

According to data from the Israel Vehicle Importers Association, the year 2016 saw a record high in the delivery of vehicles in Israel. The purchase of new vehicles contributes to the replenishing of the stock of vehicles that travel on Israel's roads: new vehicles equipped with sophisticated safety systems, which emit lower levels of pollution, and are quieter and more economical. However, as long as the purchase of new vehicles is not balanced out by old vehicles being taken off the roads, this isn't necessarily good news. The general rise in the number of vehicles leads to increased congestion on the roads, which in turn leads to an increase in the transportation burden and emissions of pollutants, and further irritates the already frayed nerves of the Israeli driver.

In light of these implications, it is interesting to see where car inventory is renewed and where it lags behind with aging vehicles. With respect to the big cities, the answer seems clear – according to Israel's Central Bureau of Statistics, in 2016, about 40% of the cars whose owners live in Jerusalem were a decade old or older. That is in comparison with 25% of the vehicles in the entire country, 21% in Haifa, 15% in Tel Aviv, and 14% in Rishon Lezion.

The aging of the vehicle inventory in Jerusalem also stands out in terms of the average ages of the vehicles: In Jerusalem the figure stands at 8.6 years. The average in the country is 6.5, with the figure standing at 5.9 in Haifa, 4.8 in Tel Aviv, and 4.6 in Rishon Lezion.

When we examine the annual purchasing trends, dramatic gaps are revealed between Jerusalem and the other large cities. It seems that the newest vehicles of all are driven on the roads of Rishon Lezion: Nearly half (47%) of all the vehicles in the city reached the road between 2014 and 2016, as compared to 43% of the vehicles in Tel Aviv, and a third (33%)of the vehicles in Haifa. The parallel figure in Jerusalem stands at 16%. A review of the previous year reveals that 18% of the vehicles in Rishon Lezion reached the road in 2016, as opposed to 16% in Tel Aviv, 12% in Haifa, and 6% in Jerusalem.

We tried to find various explanations for this phenomenon. Maybe it's the leasing companies that are registered in the center of the country and work tirelessly to renew their inventory; or it might be the result of the generous credit loans and the low interest rates that the banks offered the buyers (the ones that Avi Bar-Eli and Oren Dori wrote about in January 2017 in an article in TheMarker). It may be that unlike the benefits granted in personal contracts from private companies in the central part of the country that encourage the purchase of a new car, the tax benefits in the public sector in Jerusalem and the weak buying power of the residents, encourage people to hold onto their old cars.

Or maybe it's just the Jerusalem nostalgia, the difficulty to disconnect from the past and to embrace change – as embodied in the renowned pun and prohibition against any change to customary Orthodox practice, that "new is forbidden by the Torah," written by the Chatam Sofer in the 1800s – or the innate modesty, and the god-fearing nature of Jerusalemites, that cause its residents to cling to a 1989 Subaru. Perhaps.

Translation: Gilah Kahn

Friday, December 8, 2017

Where's the High-Tech?

Yair Assaf-Shapira

In 1995, there were 9,800 people employed in the high-tech sector in Jerusalem, according to the publication "The Development of the High-Tech Sector in Israel, 1995-2014" published recently by the Central Bureau of Statistics (CBS). In the same year, in the entire country there were 115,900 people working in the sector, so that Jerusalem high-tech employees comprised 8.4% of the total. Is that many or few? The number of workers in all sectors in Jerusalem, as compared to all workers in Israel, was higher (10%), so it may be said that Jerusalem is more prominent in other fields of employment.

Nineteen years later, in 2014, the number of those working in the high-tech sector in the city rose significantly, and reached 15,200 employees. Does Jerusalem stand out more in the high tech sector? The percentage of those who work in high-tech who are employed in Jerusalem decreased (from 8.4% to 5.3%), but the percentage of those employed in Jerusalem as compared to in the entire country (in all sectors) also decreased (from 10% to 8.8%). All in all, the prominence of high-tech, defined as the ratio between the two percentages, decreased (from 0.8-0.6).

Which cities are most prominent in the high-tech sector? The percentage employed in high-tech in Tel Aviv as compared to the entire country is 11.6%, while those employed in all sectors in Tel Aviv, from all those employed in Israel, is similar, at 11.4%. The ratio is 1.02, meaning that Tel Aviv stands out in the high-tech sector in just about the same way as it stands out in other sectors. The cities in which the high-tech sector is especially prominent are Rehovot (with a 2.3 ratio) and Petach Tikva (1.9). This means that, when considering employees, the weight of these cities in the high-tech sector is approximately twice their average weight  (it should be noted that smaller cities weren't part of the survey, and therefore Herzliya and Ra'anana were not taken into account).

In Rehovot and Petah Tikva, the high-tech sector was also prominent in 1995, but are there any cities that managed to highlight the sector over the past nineteen years? It appears that there are. Netanya managed to increase the prominence of the high-tech sector from 0.7 to 1.4, and Haifa increased it from 0.9 to 1.3. The reverse trend also exists, in the case of Ramat Gan for example, where in 1995 the prominence of the high-tech sector was high (1.3) and in 2014 it went down to 0.7.

In the employment sector, and in high-tech in particular, changes are constantly occurring. Even since 2014, which is the cutoff for the data in the recent CBS publication, things have continued to change. In Jerusalem, the large Israeli technology company Mobileye was acquired by Intel a few months ago, and the new complex that was subsequently approved is expected to employ thousands of people. In addition, it was announced that Rafael, a weapons development company, will establish a development center in Jerusalem which is expected to employ several hundred workers. It is possible that these new centers will change the current trend. A detailed examination reveals that following a continuous decline between 1995 and 2009, from 2010 the decline was halted, and a rise in the prominence of the high-tech sector in the city began.

Translation: Gilah Kahn

Friday, November 24, 2017

Putting Food on the Table

Omer Yaniv

Data accumulated from the Household Expenditure Survey carried out by the Central Bureau of Statistics show that the average household expenditure in Jerusalem is lower than the national average. In 2015, the average household expenditure in an Israeli household was NIS 15,410 a month, while in Jerusalem the average household expenditure was NIS 13,420 – lower than the average household expenditure in Tel Aviv (NIS 17,710) and higher than the average household expenditure in Haifa (NIS 12,253).

An examination of household expenditure on food (excluding fruits and vegetables) reveals that the average household expenditure on food in Jerusalem (NIS 1,850) is also lower than the national average, which stands at NIS 2,030. In this instance as well the expenditure in Jerusalem is lower than that in Tel Aviv (NIS 2,240), but higher than the household expenditure in Haifa (NIS 1,670). 
The main reason for the high household expenditure on food in Tel Aviv relative to Jerusalem derives from the high expenditure of Tel Aviv residents on meals outside their homes. The survey results show that in 2015 a household in Tel Aviv spent an average of NIS 1,020 a month on meals outside the house, as opposed to only NIS 260 a month spent by a Jerusalem household, and NIS 460 a month by a household in Haifa (while the national average is NIS 440 a month).
When examining the expenditure clauses for the purchase of food products it becomes apparent that Jerusalem households generally spent more than households in Tel Aviv and in Haifa. Jerusalem households usually spent 88% more than households in Tel Aviv, and 72% more than households in Haifa on meat and poultry; about 36% more than in Tel Aviv and 27% more than in Haifa on bread, grains, and baked goods; and about 28% more than households in Tel Aviv and 47% more than Haifa households on fruit and vegetables. However, on alcoholic beverages, Jerusalem households spent 71% less than households in Tel Aviv, and 45% less than households in Haifa.

Household expenses on food products, by main clauses:

Translation:Gilah Kahn