New Law Requires Smaller Apartment Construction

The Knesset has passed on its second and third readings a law that will require local authorities to ensure that 10 percent of the apartments in all construction projects approved include apartments that are three rooms or smaller. The law would apply to projects in the Tel Aviv and Yerushalayim areas, excluding peripheral areas, where there was a plentiful supply of such apartments.

The purpose of the law, proposed by MKs Eli Cohen (Kulanu) and David Bitan (Likud), is to make apartments cheaper by making them smaller. After reviewing statistics that indicate that the number of three-room apartments (living room and two bedrooms) had fallen significantly in recent years, and that the large majority of apartments being built were four rooms and larger, the two decided to propose legislation that would encourage the construction of smaller homes.

Besides being cheaper than larger apartments, smaller homes appeal to newlyweds and very young families, who generally have no chance to buy an apartment until much later on. The MKs hope that by expanding the supply of such homes, more young couples will have the opportunity to buy a home more quickly, building up equity instead of just paying out rent.

The law is a rider to existing rules about apartment size. The size of apartments is determined by rules laid down by local authorities, who have the option of dictating size on up to 30 percent of apartments in an approved project. However, because larger apartments are more profitable, the choice of what size apartment to build is usually left to contractors, who opt for the larger, more profitable homes. The new rules, to be in place for at least five years, will mandate that 10 percent of homes built be smaller, thus more afforable.

“The rise in the number of young couples and the higher living standards justify building more three-room apartments, but we see that the opposite is happening,” said Cohen. “Some local authorities do not provide building permits to projects that include smaller apartments, because they feel it attracts weaker populations, limiting opportunity for young couples, thus the need for this bill.”