1 million homes in Israel aren't earthquake proof

The government is ending the Tama 38 program, which provided an incentive for contractors to renovate old buildings.

Sara Rubenstein ,

Earthquake damage (illustrative)
Earthquake damage (illustrative)

The National Planning Administration announced last week that it is ending its Tama 38 program in May 2020, allowing up to a million homes in Israel to remain at risk of being destroyed in an earthquake according to a Haaretz report on Sunday.

Tama 38 was originally designed by the Israeli government to strengthen and renovate old apartment buildings and make them earthquake proof. All buildings in Israel erected before 1980 are not earthquake proof despite Israel being located on the Syrian African Rift.

The program allows private contractors to reinforce and upgrade buildings in exchange for receiving building rights to add new apartments to the buildings. The contractors make a tidy profit on the apartments they sell while the tenants receive extra rooms, porches, elevators and other upgrades for free. The government can rest assured that the buildings are now earthquake proof without having to budget for it. Furthermore, older urban building are upgraded and renovated on the contractors' dime and the newly built apartments increase Israel's urban housing supply. It is a win-win-win situation with happy contractors, happy tenants and a happy government.

However, the contractors' need to make a profit has led to the downfall of the program, Tama 38 became popular in prime real estate areas such as Tel Aviv and Jerusalem, where building new apartments could earn the contractors a tidy profit. Tama 38 became less about safety and more about increasing Israel's urban housing supply. “Tama 38 was supposed to save lives – not to improve the lifestyles of homeowners,” said Haim Mesilaty, chairman of the Israel Property Appraisers Association.

Tama 38 only proved profitable in places where housing costs are high, and only 1% of Tama 38 projects took place where the earthquake risk is the highest - in the north.

“Tama 38 has produced distorted results,” said Yigal Govrin, chairman of the Construction and Infrastructure Engineers Association. “If you want to fix this, budgets should be allocated only in areas prone to earthquakes -- Kiryat Shmona, Hatzor Haglilit, Tiberias, Eilat and so forth. These are localities in which Tama 38 has not been employed because the economics are uncertain. Property developers only use it in high-demand areas.”

However, in order for Tama 38 to take place in the periphery, the government would have to provide funding or incentives to contractors since the housing costs are much lower in those areas.

Meanwhile, according to Haaretz, those who oppose the decision to end Tama 38 say that besides the fact that the end of the program will leave so many buildings without reinforcement, it would also wreak havoc on the housing market, according to the Haaretz report. The Urban Renewal Authority says that 14% of home sales in 2018 were renovated under urban renewal and 80% were through Tama 38.