Ramat Shafat, a special nonprofit organization founded by
Degel HaTorah's Housing Committee in Jerusalem to build homes
in the Ramat Sholom (Shuafat) neighborhood, recently returned
2.5 percent of the purchase price to over 700 apartment
owners in Ramat Shlomo, in addition to a refund of 10 percent
of the purchase price seven years ago.
The Ramat Shafat project was initiated while Rabbi Avrohom
Ravitz was serving as deputy housing minister over ten years
ago and was managed by Rabbi Refoel Hoffman and Rabbi Eliyohu
Diskin. The entire project was overseen by a rabbinical
committee, which directed all questions that arose to Maran
HaRav Eliashiv shlita. The whole neighborhood of Ramat
Shlomo was built by such special-purpose associations and the
largest project was Ramat Shafat, one of the most successful
planned projects in Jerusalem's chareidi neighborhoods.
The price of the apartments was set according to the
contractor's building charges plus an added fee earmarked for
the construction of public facilities on the project grounds
and for future payments to the Israel Lands Authority,
registering at Tabo (official title to the property), income
taxes, etc. With all that the prices were far below apartment
prices in other parts of Jerusalem at the time: a typical
three-bedroom apartment cost just about $110,000 —
approximately the current price in an outlying area such as
Kiryat Sefer. The building period was short and it was
several months ahead of schedule that 730 families moved into
the new neighborhood.
Two years after the neighborhood was built, on Erev Pesach
5757 (1997), the residents unexpectedly received letters
informing them that after all of the housing units and
communal facilities were finished a sum of NIS 35 million
remained in the hands of the association and would be
returned to the apartment purchasers. Each family was
reimbursed 10 percent of the price it paid for the apartment.
Residents were obviously pleased over the happy surprise and
even financial periodicals and figures in economics and real
estate expressed surprised praise for the unprecedented
move.
An additional sum earmarked for other purposes also remained
with the association heads. Now that the registration
procedures are complete and all of the construction defects
have been repaired, the association decided to return the NIS
10 million left in its accounts. Recently the 730 apartment
purchasers received notices that another 2.5 percent of the
purchase price would be reimbursed to them. Thus the actual
average price per apartment was just $97,000, including
communal facilities, parks and playgrounds, construction
defect repairs, Tabo registration, etc.
This week Rabbi Ravitz, who championed the approach at the
time, called the move a great act of Kiddush Hashem.
"Never has such a phenomenon occurred in a real estate
project in Israel, in which an enormous project built by a
public association, rather than an entrepreneur or a private
contractor, managed to return such large sums of money
— amounting to tens of millions of shekels — to
residents. This is proof that the system of marketing housing
units through public associations with public responsibility
is the correct way to build apartments today for the chareidi
public, for this is the only way to reduce apartment prices
and even to return to the residents money remaining in the
association's account after the entire project is
completed."
