Israel ranks 35th globally in the “Ease of Doing Business” index and holds the same rank for “Obtaining Building Permits.” This is relatively low compared to developed countries. However, this ranking does not even consider the planning process, as a building permit request is only submitted after the land has been approved for construction. Israel ranks 83rd in “Electricity Connection”—having previously ranked below 100! The electricity connection is granted after an occupancy permit, which, in global comparison, takes significantly more time in Israel than in other free-market economies. While these indicators do not directly measure planning, they reflect its inefficiencies. In many European countries, the U.S., and Australia, the planning process is time-limited, and authorities must adhere to deadlines; otherwise, the application is automatically approved.
The Planning and Building Law has not been updated for nearly six decades. However, successive governments have attempted to streamline planning procedures in Israel over the past thirty years. The primary driver for reform has been the immense burden placed on planning institutions due to a dramatic increase in local master plans and detailed plans submitted for approval.
According to the law, regional planning committees were required to process all plans, regardless of size. However, due to the overwhelming workload, planning procedures became increasingly prolonged, and no efficiency mechanisms were implemented to accommodate the growing number of cases. In response, lawmakers sought to distribute planning approvals among more institutions by delegating some authority to local committees.
Initial Reforms: Partial Decentralization
The First Amendment, enacted in 1995, expanded the right to initiate plans and submit them to planning institutions for private developers. It also broadened public participation in planning procedures, established appeals committees, and, for the first time, decentralized some powers to local committees. Before this amendment, local committees had no authority to review or approve local and detailed master plans within their jurisdiction.
Following the amendment, planning authority at the local level was divided between regional and local committees. A plan under local committee jurisdiction could only include specific matters outlined in the law. In contrast, a plan under regional committee jurisdiction was defined as a “local master plan or a detailed plan not under local committee jurisdiction.” It is important to note that even after the amendment, local committees had authority over only a limited scope of issues with little significant impact on broader urban planning. Moreover, all local committees were granted identical powers without differentiation based on their performance or professional capabilities. Ultimately, the amendment had minimal impact on the workload of regional committees since the autonomy given to local committees for decision-making remained highly restricted.
Local Committees Reluctant to Assume More Authority
The second amendment, introduced in 2006, expanded the authority of local committees. It enabled them to approve local master plans or detailed plans for areas where a general master plan had already been approved and whose provisions did not contradict the broader strategy. Under this amendment, regional committees were tasked with overseeing general urban planning, while local committees were responsible for detailed planning that aligned with regional guidelines.
As a result, two types of local committees emerged:
- Authorized Local Committees – designated by the Minister of the Interior.
- Non-Authorized Local Committees – committees without authorization or those operating in areas lacking a legally compliant master plan.
According to the State Comptroller’s report, this amendment failed to achieve its objectives fully. Too few committees were capable of assuming new powers. By 2012, only 13 out of 110 local committees nationwide had been authorized, and by 2020, that number had increased to just 22. While no official quantitative goal for the number of authorized planning committees was stated during the reform process, there is general agreement that the number of committees granted authority remains insufficient.
A 2013 study published by the Hebrew University highlighted systemic failures that likely hindered the implementation of the 2006 amendment. First, central government authorities face an inherent functional contradiction—devolving power to local committees requires them to relinquish their authority to another body. Additionally, some local municipalities were unwilling to accept the responsibilities and risks associated with the decentralization reform due to professional skill gaps and administrative challenges. Evidence of this reluctance was found in a 2009 document prepared for the National Planning Administration, three years after the amendment’s passage: “In our estimation,” the report stated, “the core issue lies in the assumption of Amendment 76 that local committees would be eager to assume additional powers.”
The 2011 Barnea Report, which examined organizational and administrative barriers in urban planning and construction, identified a key reason for the low number of authorized local committees: “The lack of financial resources among local authorities to invest in the necessary infrastructure for accreditation, such as computing systems, personnel, etc.” Another significant factor was local governments’ poor enforcement and supervision capabilities, which form part of the accreditation criteria. The report also pointed out that a substantial bottleneck in the planning system stems from a lack of adequately trained and sufficient personnel.
Further insights on this matter can be found in the 2007 annual report by the Ministry of Interior’s Local Authorities Audit Division, which reviewed local planning and building committees. The report stated that the audit findings indicate serious deficiencies and deviations from legal provisions and proper administrative procedures in almost all areas examined.
According to the report, the persistent violations and deficiencies over the years necessitate action by the relevant authorities, including legal proceedings against officials who knowingly or negligently contributed to violating laws and regulations.
Another noteworthy observation in the report states that it is recommended that elected officials undergo some form of training in planning and building matters. It is striking that municipal council members, who hold significant power over the fate of individuals investing their life savings into real estate, sit on planning and building committees and make decisions on approvals and rejections without even minimal knowledge of planning and construction. Despite this, the Ministry of Interior merely recommends training for these council members instead of making it a mandatory prerequisite for serving on these committees.
Study Conclusion: Regulators Tend to Resist Decentralization
The third phase of reform occurred in 2010, when the government submitted a new Planning and Building Law to replace the 1965 law. However, the legislative process was halted, and the law was not passed. Instead, the government initiated a comprehensive amendment to the existing law: Amendment 101, passed by the Knesset in March 2014 and implemented in stages.
Amendment 101 centered on decentralizing powers from regional to local committees, which aimed to reduce the burden on regional committees and improve public service. Furthermore, since local committees include elected representatives, this reform was intended to strengthen democratic urban planning decision-making, reflecting other developed countries’ planning systems.
According to a Hebrew University study, the balance of power between political and bureaucratic leadership at the municipal level is one of the most significant factors influencing cooperation with decentralization reforms. The study found a negative correlation between the level of regulatory involvement and the willingness to support decentralization. The more entities engage in regulatory oversight, the more conservative their approach toward decentralization, and vice versa.
This finding aligns with research on bureaucratic structures, which suggests that regulatory bodies are reluctant to relinquish control due to institutional interests. As a result, even when official policy promotes decentralization, not all authorities cooperate fully with its implementation.
On the surface, decentralizing planning powers contradicts the interests of regional planning committees and enforcement units, so they are cautious about these reforms.
One example is the authorization process for the Rishon LeZion Local Committee, one of the largest in Israel. With over 100 employees, its resources exceed those of the National Planning Authority and individual regional planning offices. The committee also has advanced IT infrastructure and high-level management capabilities.
Since the implementation of Amendment 76, Rishon LeZion has been considered a natural candidate for accreditation. It received high ratings for meeting all eligibility criteria and was positively evaluated by external assessors.
The Central Regional Committee and the National Supervision Unit opposed its accreditation despite this. In a 2009 opinion, the regional committee stated that the local committee lacks a coherent planning policy. Meanwhile, the supervision unit noted many unaddressed construction violations, particularly along the coastline.
These opinions contradicted the high performance scores given to the committee and its demonstrated effectiveness. The reluctance of additional government bodies, such as the Land Law Enforcement Unit and the Department of Local Government Administration, to approve the committee’s accreditation further supports the theory that regulatory agencies seek to expand and retain power rather than relinquish it.
Limited Decentralization: Control Without Resources
In general, decentralization efforts in Israel have been characterized by limited authority transfers, designed to implement pre-determined policies without transferring execution resources. This approach keeps policy-making power and oversight in the hands of the regulator, allowing only financially and administratively strong municipalities to assume planning responsibilities.
As a result, the central government retains control over urban planning despite its public declarations of decentralization. At the same time, inequality between municipalities increases, as only well-resourced local authorities can effectively take on planning powers, while weaker ones remain dependent on central decision-making.
Certified Local Committees: A Good Solution, but Only 17% Have Been Accredited.
Amendment 101 formally regulates the certification process for local committees, which began in 2006, and outlines the conditions for such certification in terms of professional qualifications and integrity standards. The amendment also establishes mechanisms to enhance oversight and transparency in the operations of local committees. Measures include adding professional public representatives as observers in local committees, mandating public disclosure of planning information, and creating a monitoring unit to oversee committee activities. Additionally, the amendment introduced, for the first time, the concept of a “comprehensive plan”—a local master plan designed to guide regional urban planning policy without including specific regulations or enabling building permits.
The success of this reform has been only partial. On the positive side, decentralization through the delegation of authority to local committees has redistributed about 32% of the planning workload from regional committees to local ones, allowing more plans to be handled at the local level. According to the State Comptroller’s report, the certified committees have significantly contributed to reducing the workload on regional committees, with their impact estimated to be more than twice that of non-certified local committees. This suggests that authorizing local committees could effectively reduce the planning burden on regional committees.
The certification process has led to a shift in workload distribution between regional and local levels. Before and immediately after Amendment 101, an average of 37 plans were submitted to regional committees for every one plan submitted to a local committee. Following the amendment, this ratio decreased to 25 plans per regional committee per one submitted to a local committee, representing a 32% reduction. However, despite this improvement, regional committees face high workloads, handling 8,171 planning applications even after the reform.
Progress remains insufficient. As of 2022, only 17% of local committees have been certified, and in the first six years following the amendment’s enactment, there was little increase in the number or distribution of certified local committees. The data shows that 6 of the 22 accredited committees (approximately 27%) are located in the northern and southern districts, while the rest are concentrated in the Haifa, Tel Aviv, and central districts. As of 2018, more than a quarter of Israel’s population resided within areas governed by certified committees. Despite this, the Jerusalem district, which includes Israel’s capital and most populous city, has no certified local committee.
In response to the Comptroller’s inquiry, the National Planning Administration stated that population size and geographic location are not considered factors in selecting committees for certification. Instead, the decision is based on recommendations from advisory bodies regarding licensing, planning, and enforcement. This reasoning is questionable, as prioritizing the accreditation of local committees should rest with elected officials rather than bureaucrats who are not directly accountable to the public or the residents of Jerusalem.
Moreover, the National Planning Administration failed to establish interim goals that could serve as milestones toward fully implementing the government’s decision. Such targets could have helped expand the number of certified committees, ensuring broader application of the principles underlying Amendment 101. In other words, the administration began implementing planning reforms without defining a specific numerical target for the number of local committees that should be certified within a given period. Without quantitative benchmarks, the success of the reform becomes subjective and vague, measured in “qualitative” rather than empirical terms. As a result, the administration can present even a lack of progress as a success, depending on interpretation. The Comptroller noted that clear intermediate targets could have provided policymakers with a better understanding of how effectively the reform was being implemented.
One-Quarter of Submitted Plans Exceed the Legal Processing Time
Another central goal of the amendment was to reduce the time required for advancing planning applications by setting maximum deadlines for decision-making, which had not previously been stipulated by law. Additionally, the amendment introduced the authority to escalate plans to a higher-level planning institution if the designated committee failed to meet its deadlines. It also established a fast-track process for small-scale, low-impact plans under local committee jurisdiction.
The law does not set an overall time limit for approving a plan but only establishes deadlines for deciding after an application meets preliminary requirements. The amendment requires regional committees to choose within 18 months of submission to ensure that applications are processed as quickly as possible.
Although the reform has slightly improved the proportion of applications processed within 18 months, a quarter of master plan applications under regional committee jurisdiction still exceed the legally mandated timeframe. Overall, the proportion of applications fully processed within 18 months has doubled, from 17% before the amendment to 34% afterward. However, this improvement has not extended to high-demand areas like the central and Tel Aviv districts. In the central district, the average approval time remains 4 years and 3 months, while in Tel Aviv, it has increased by one month, reaching 2.3 years by the end of 2019. Additionally, 56% of planning applications are ultimately abandoned, meaning that more than half of submitted plans never come to fruition, wasting significant resources.
Another major obstacle is a lack of accurate planning data due to inadequate information systems. To meet societal needs in various sectors, it is essential to ensure that sufficient approved plans exist to issue building permits. In the housing sector, for example, the government has set planning targets for the number of housing units that should be included in local master plans. A 2017 government decision set planning targets for 2040 based on demographic projections, acknowledging that not all planned developments will materialize. As part of this strategy, the government aimed to plan approximately 100,000 housing units annually by 2020.
Given the strategic importance of planning inventories for economic development and meeting public needs, it is crucial to track the number and location of approved plans systematically. Additionally, it is essential to determine the extent to which approved plans are viable for implementation, as some contain conditions that delay their realization. Another critical aspect of planning inventory management is monitoring implementation rates and tracking where approved plans have been executed. Such oversight would provide insights into potential shortages or barriers to implementation, enabling policymakers to adjust targets accordingly. Accurate planning data allows authorities to focus efforts where they are most needed and streamline the work of planning institutions.
The National Planning Administration has improved its capacity to manage and track planning inventories and has also made this information publicly available. However, the data does not include details on approved plans’ availability or implementation status. One reason is the lack of an automated interface between the Planning Administration’s database and the computer systems used for building permit processes.
Conclusion
Over the past 30 years, successive governments have attempted to introduce deep reforms in the planning and construction sector, but these efforts have largely failed. In the next section, we will focus on the biggest unresolved issue that, unless addressed, will render even another 50 years of reforms ineffective: licensing and building regulations.