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  • Writer's pictureGedaliah Borvick

Creative and (Relatively) Affordable Housing Solutions

J'm project under construction (Gedaliah Borvick)

Our clients wanted to buy a 4-bedroom apartment in a central Jerusalem location, within walking distance to the Kotel. Their goal was to move in when they retire in fifteen years, so they needed a Shabbat elevator, plus they wanted a parking spot and storage room.

Although their budget was not large enough to purchase a modern apartment in Katamon, German Colony or Baka, their timing flexibility empowered us to think creatively. We decided to focus on future urban renewal projects.

In 2005, the Ministry of the Interior approved TAMA-38, a plan to encourage the private sector to bankroll the cost of strengthening older buildings to withstand earthquakes. The plan offers increased development rights, which the apartment owners transfer to a construction company in return for upgrading their building. The owners receive a reinforced and refurbished building and expanded apartments, and the contractor profits by selling units on the added floors that they construct above the original building. A second program called TAMA-38-2 was subsequently created to replace old rundown structures with new buildings.

Between TAMA-38 program putting the spotlight on urban renewal, the strong demand for housing, and rising real estate prices, Pinuy Binuy, a program that was approved back in 1966, has come back into vogue. Pinuy Binuy means to evacuate (pinuy) and tear down older buildings, and construct (binuy) new ones. The existing owners trade in their old apartments for a new apartment of equal or often larger size, plus their relocation costs during construction are covered by the developer.

The Jerusalem municipality often prefers Pinuy Binuy over a TAMA-38 plan. Let me explain by way of a recent example: In central Jerusalem, there is a block of approximately ten 4-story buildings with close to 400 apartments. Originally, a developer proposed a TAMA-38 renewal plan to the municipality for approval. However, the apartment owners successfully argued that the neighborhood lacks sufficient parking space and communal facilities, such as synagogues and kindergartens, and adding new apartments above the existing buildings would exacerbate both problems. Accordingly, the municipality rejected the TAMA-38 application and approved a Pinuy Binuy plan that would create taller buildings which can house over 1,000 apartments, offer underground parking, and also add much-needed community facilities.

The Pinuy Binuy program has become a popular trend in Israel’s population centers as it is a win-win-win program: (1) the apartment owners receive new, large and attractive apartments, (2) the developers profit by selling apartments, and (3) the local government provides a solution to the pent-up demand for housing.

When considering buying an apartment in what appears to be a dilapidated building, keep in mind that not all older buildings will end up being torn down and rebuilt, so you must do your due diligence and choose carefully. In addition, even when buildings are redeveloped, the Pinuy Binuy program is a drawn-out process. Getting owners to approve the project, enduring the lengthy administrative process, emptying out the buildings, and then finally constructing the new buildings can sometimes take upwards of ten years to complete.

Our clients with the limited budget embraced the Pinuy Binuy concept. Although there is no guarantee that the project will come to fruition, they did their research and were comfortable that the probability was high. In addition, the existing apartment will generate an income stream, so even in the worst case scenario, they were comforted that they were buying an apartment with intrinsic value.

Pinuy Binuy is definitely not for everybody. However, for families with a long-term real estate horizon and for investors, buying an apartment with Pinuy Binuy potential can be a golden opportunity.


Gedaliah Borvick is the founder of My Israel Home, a real estate agency focused on helping people from abroad buy and sell homes in Israel. To sign up for his monthly market updates, contact him at Please visit his blog at

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