Dei'ah veDibur - Information & Insight

A Window into the Chareidi World

4 Nissan 5765 - April 13, 2005 | Mordecai Plaut, director Published Weekly









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Shema Yisrael Torah Network
Shema Yisrael Torah Network











Degel HaTorah's Ramat Shafat Returns Millions of Shekels to Apartment Buyers in Ramat Shlomo (Shuafat)

By Betzalel Kahn

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."


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