Entrepreneurship


What is the connection between the addition of a suspended balcony and a construction project according to Tama 38(2)?

Entrepreneurship in the world of real estate refers to the process of investing money in a project that changes its original form and is sold at a price higher than the sum invested in the purchase, renovation and improvement of the property.

Some Background

What is unique to the field of real estate development, unlike other types of entrepreneurship, is the crucial factor of possessing excellent interpersonal skills. This is precisely where the entrepreneur enters the stage. The entrepreneur must know how to touch the heart – he must accurately discern what really matters to each individual and he should also understand where he should not tread. Whether the issue is the addition of a safe room, a balcony, or Tama 38, demolishing and rebuilding – the success of the project lies in the team of consultants and experts, as well as in the delicate relations between neighbors. This is a crucial element of being a successful entrepreneur.

Suspicion and envy, along with a lack of understanding of the field and a justified fear of the unknown create a barrier that does not exist in other branches of entrepreneurship. An honest and professional entrepreneur-realtor can lead the process to its ultimate resolution.

Yazamut

A brief introduction to Tama

Tama 38 regulations have created great potential for improving the lives of Israeli citizens (as long as they own an apartment in one of the expensive cities in Israel, for only a high price per built meter can justify such a project). Each resident enjoys an increase in apartment size with the addition of a safe room (sometimes also an additional room (up to 12.5 m²), storage and parking, the installation of an elevator and balcony (up to 12.5 m²), renovation of the facade of the building and. The price paid by the tenant is not directly economic; in exchange for this upgrade, the owners allow the developer to build extra apartments whose sale covers the construction costs.

What actually happens?

There are cities where planning units have been established to advance and implement Tama 38, like Herzliya and Ra’anana. Over one hundred projects were approved in each city during 2014. By contrast, in Haifa, dozens of projects have been delayed due to rejection of grant permits. Some suspect that the mayor himself has stopped the legal progress of city development due to the crude intervention of this national law into the local committee’s design work. Unlike other areas where familiar barriers include bureaucracy, technological or funding difficulties, the real estate developer encounters all three, the hardest of which I have entitled “the good neighbor barrier.”

So what then do we do?

I have built a team in which the architect can deal with bureaucratic design barriers, the contractor with logistical problems, and as long as the country maintains low interest rates, there will be no lack of funding resources. However, projects succeed or fail depending on the collaboration between the tenants. This is where a mediator comes in – when the tenants’ desires begin clashing:  for one tenant, the garden is important; another wants an elevator; another family doesn’t want construction overhead; another gentleman just wants his parking spot. Just before everyone begins pulling each other’s hair out and the whole thing goes up in smoke, it must be recognized that such processes take time, and a mediator is necessary to protect the rights of all involved from these expected clashes.

Tama 38 – the bottom line

Tama 38 is far too complex to describe here in detail. Opinions are divided whether or not it brings about a general improvement in citizens’ standard of living. There is no single, comprehensive answer. However, one cannot deny the personal and economic potential inherent in these regulations.

We will be glad to answer more questions on this issue.