Abstract
The city of Tel Aviv needs extensive urban renewal projects to answer the demand for housing. The area suitable for such a project is the older southern part of Tel Aviv, made up of small parcels of land with single units. This area has undergone an extreme gentrification process, which makes assembling small parcels into large ones a very difficult task. Owners holding out for higher prices may either prevent or significantly delay socially efficient redevelopment. The only current option for the Tel Aviv Municipality that will lead to efficient land assembly for private redevelopment currently is the option of private entrepreneurship. We wish to describe a mechanism that will solve the hold-out problem and lead to efficiency in land assembly without resorting to the intervention of the government to execute eminent domain. The mechanism requires the municipality to plan the development that will best suit the city, thus allowing the valuation of the parcel to reflect its true price for the owner. If the owners are still reluctant to sell, the municipality can then tax him according to the new value of the land.
Highlights
Awareness of the inadequacy of traditional planning instruments marks the transition from an approach based on urban expansion to a phase based on urban renewal
According to Kivell and McKay [2], the advantages claimed for taking land into public ownership during urban development can be condensed into three main arguments: Sustainability 2014, 6 planning efficiency, fiscal and social equity, and the provision of services
Opponents of public landownership state that the combination of complete public ownership and the granting of planning permission, together with the public sector use of land, is potentially dangerous because it restricts the operation of the free land market
Summary
Awareness of the inadequacy of traditional planning instruments marks the transition from an approach based on urban expansion to a phase based on urban renewal. Targets of urban renewal programs can be summarized as increasing the quality of housing and open spaces, adopting a policy of social cohesion and balance, and paying attention to migration phenomena and improvement of area reputation [6]. The private investor is interested in transforming a totally abandoned area, with or without changing its possible uses (i.e., an old industry or station can be transformed into a trading center, or an old building can be demolished in order to build a new high-rise). Such areas are very accessible, fairly central and can provide important services to the whole town. We propose a new mechanism that solves acute land assembly problems without resorting to eminent domain—a mechanism that will allow the city to continue to adapt and extend while at the same time maintaining social justice and sustainability
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