The practice of taking large apartments and turning them into smaller for the sake of rental income stream has grown with the shortage of housing and rental units especially in Tel Aviv and the nearby coastal region. The difference in rent for a one – two room unit as opposed to the average four room can often be only about 1000 NIS.
While the rental market may have softened about 5-10% in new contracts originating post October 2008, rentals remain at near to the highest ever, allowing even low income areas to obtain heretofore undreamed of rents equivalent to $900-1100 for a 3-room unit, an average in Jerusalem and Coastal regions.
According to Ha’aretz Judge Limor Yehidi fined a Tel Aviv landlord 570,000 NIS for splitting 4 apartments into 10 and then ordered he restore them to their original state. The landlord had made the alterations without legal permits. The units were not large to begin with and part of the severity of the sentence is to prevent other landlords from creating units too small (17-27 meters) for reasonable living space.
The Judge called this practice a “plague” in Tel Aviv and wanted to hit such practices hard in the pocketbook.