Turkish Housing System: History and current debates in comparison with several EU countries

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Turkish Housing System History and current
debates in comparison with several EU countries

• Pelin SARIOGLU

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• No experience of direct housing provision except
  migrants, disasters etc.
• No public rental housing
• Huge private rental sector
• No finance system of mortgage
• High ratio of homeownership (64 in urban areas)
• Development of illegal ways by Hhs themselves to
  solve the housing problems
• A distinct path from its European counters

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Turkey- Urban-Rural Tenure Ratios (2003)
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• Home ownership ratio in Turkey is 71.95 in 2003.
• Tenancy ratio which only comprises private rental
  is 21.60 . However, the ratio of private rental
  can reach up to 28.4 in bigger cities like
  Istanbul.
• Public accommodation, in Turkey, refers to
  housing for civil servants, which can not be
  considered to be same with social or public
  rental sector in Europe. Rather than answering
  the demand for whole population, these are
  alienated housing only for particular employment
  groups.
• Other group, with a 5.13 share, is quite
  significant in terms of home ownership studies.
  They are defined as households who do not pay
  rent. These are mainly households who dwell in
  the houses of relatives or parents. In this
  sense, they are the most probable future owners
  of those dwellings. Thus, when added to ratio of
  owner occupiers, the total makes 77.08 in 2003.

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History

• Since the foundation of Turkish Republic in 1923,
  there has been no experience of social housing in
  Turkey.
• Direct undertaking of the government was only
  carried for placement of migrants and after big
  disasters.
• There were several institutions such as Ministry
  of Reconstruction and Housing, Real Estate Bank,
  Housing Administration which have involved in
  housing.
• Yet in the absence of finance system they could
  not manage to create a comprehensive national
  housing policy.

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• The unsatisfactory housing policies were
  substituted by methods created by households
  themselves. 3 processes have been observed in the
  stock
• Appropriaton (Gecekondu)
• Appurtenance (Flat Ownership)
• Apportionment (Especially in the ourskirts of
  cities, rural)

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Appropriation (Gecekondu)

• Appropriation of land without legal permission of
  the right holders, and building rapid and cheap
  housing on it by violating development rules.
• Physically, especially in the outskirts of larger
  cities, gecekondu became the prevalent housing
  type.
• In the beginning, by low income groups who had
  newly migrated to big cities and who were in need
  of housing.

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Areas developed through appropriation process
(Gecekondu) in the outskirts of Ankara
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• Thus, was ignored for years firstly because Hhs,
  who were really in desperate need of had resorted
  to it as a remedy and secondly because it masked
  the inadequacy of governments in housing.
• With the enactment of subsequent gecekondu
  amnesties, turned out to be a speculative house
  building process, followed not by needy persons
  but rather by organized groups who seek profit.
• Process lost its innocence, became a major
  problem which governments then have put efforts
  to solve in following decades.

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Appurtenance

• A new tenure type arranging the rights among
  multiple right-holders on single lands.
• Law enacted in 1965, process was legitimized and
  became prevalent in central areas of the cities.
• Existing stock is demolished and rebuilt with
  higher densities (Balamir, 1996b).
• Helped meeting the demand by increasing the
  density in cities
• Opened a path for rental sector which governments
  had ignored for years.

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Examples of areas developed through appurtenance
process in Ankara
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• No state role in provision of the large private
  rental sector in Turkey.
• Independent searches of Hhs developed it
• Filled an important gap in housing without
  violating the rules and regulations.
• Physical consequence Apartment stock.
• Identical plot sizes and similar development
  rights, standard looking concrete buildings in
  the city landscapes.

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• Household and Housing Srock Characteristics
• Turkey and Several EU Countries

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• In order to make the ratios and the figures of
  the comparison more readable, these features,
  when possible, are portrayed in comparison with
  several countries of European Union
• Netherlands which can be accepted as a
  representative of European welfare country,
• Spain a Mediterranean country, and
• Lithuania, a recent EU member country.
• The figures for these countries are acquired
  from
• Regular National Report on Housing Developments
  in European Countries Synthesis Report
• Housing Statistics in the European Union 2004

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• Household characteristics

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Household Size
In Turkey, 1 person households comprise only 4
of the all population whereas this figure is 34
for the Netherlands, 20 for Spain and 29 for
Lithuania
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• Turkey is characterized with larger households.
  The stability and commitment levels for Turkish
  households are higher, which in turn makes future
  decisions possible and sometimes necessary.
• Additionally, average household sizes for four
  countries also vary considerably
• Turkey average is 4.18, Dutch average is 2.3,
  Spanish average is 2.9 and Lithuania has an
  average value of 2.9.
• Thus, it is expected that the stock in Turkey
  should have bigger dwellings with more rooms when
  compared to the other countries to meet the needs
  of households.

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Age of the Head of the household

• The average age of the head of the household in
  Turkey is 46.85. For Netherlands the value is
  also similar 45, 48 (WBO, 2002).
• However, the frequency of age groups reveals
  another picture
• 18-24 age group head of the households only
  compromise the 1 of the all households in
  Turkey and 14 in Netherlands (WBO, 2002).

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• This is an indicator showing that Turkish people
  form private households at later ages than
  European countries. Generally speaking, leaving
  family takes place with marrying and/or moving to
  a different city for working or studying.
• In the housing stock, this characteristic also
  means that in Turkey when private household is
  formed, it is at a phase that households had
  already came to an age and have stabile features
  which are convenient to be home owners rather
  than staying in the rental sector.

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• Housing stock characteristics

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Age of the stock
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• Turkish housing stock is quite new compared to
  other cases. Only 53 of Dutch housing stock was
  constructed after 1970 whereas this figure is 81,
  1 for Turkey.
• One reason is that Turkey did not involve in
  Second World War and thus housing demand was not
  a problem in 1950s. Rather than that, housing
  demand increased by population increases and
  migration after 1980s.

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Number of rooms and Size of the dwelling

• In Turkish housing stock, average number of rooms
  is 3.43. In the Netherlands, this figure is 4.26,
  in Spain 5 and in Lihuania 2.3. The EU- Candidate
  countries average is also higher than Turkish
  case (3,6).
• Since Turkish stock is mainly developed through
  market, it does not cover the outlier groups. The
  main concern has been just to correspond to needs
  of the dominant groups. Thus, the result is the
  primacy of 3 and 4 room dwellings in the stock by
  87 . The ratio of one room dwellings is just 0,
  3 .

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• The ratio of average household size to average
  number of rooms for Turkey is inefficient the
  ratio is just 1.21.
• However, ratios for Netherlands, Spain and
  Lithuania are 2.4, 2.9 and 2.7 respectively.
• Due to the biased composition of stock in terms
  of size, small and large households live in
  under-utilized or over-crowded dwellings in
  Turkey. The housing choices of Turkish households
  regarding size of the dwelling are relatively
  limited.
• Although, the average size of the dwelling is
  above the mean of EU countries, over crowding is
  a problem in Turkey due to the high household
  size average.

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• Current debates in Turkey

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• High inflation and interest rates, impossible to
  develop a housing finance system.
• In March 2007 the law on housing finance was
  finally enacted. This law is actually a
  compilation of several items from related laws.
• With this law, in addition to banks, leasing
  companies and consumer finance companies
  (non-bank institutions)
• Both variable and fixed rates are possible in the
  purchase of house.

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• Any type of dwelling can be bought by using
  mortgage in Turkey.
• Two restrictionsat least 80 level completed
  and occupancy permit.
• Disaster insurance obligation (Relevant)
• At least 25 cash is compulsory.
• Mortgage law does not differentiate owner and
  not-owner. The eligibility is just the financial
  appropriateness of the person. the law is likely
  to increase the home ownership ratios in Turkey.

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• Mortgage law disregards social aspects of housing
• Home is just considered as an ordinary good which
  is sold in the market.
• No priorities for lower income groups therefore
  whether further penetration to the lower end will
  be possible is a question mark.
• Positive effects
• it will help to decrease unauthorized houses by
  compulsory incorporation of occupancy permit
• statutory obligation for disaster insurance will
  decrease the number of un-insured houses.
• The effects of this law on the market can be
  evaluated in time, yet it is expected that future
  adjustments will be inevitable for a more
  effective housing finance system.

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Conclusion

• Turkey is traditionally an owner society. Owning
  has always meant protection of savings against
  high inflation. Owning has been culturally
  considered to be an unavoidable end in the life
  cycles of Household due to rapid urbanization
  process, unsatisfactory housing
  policies/provisions
• No comprehensive housing policy from the
  beginning of the Republic.
• Not only for rented but also for owner occupied
  sectors, effective subsidies and incentives could
  not be developed.
• Due to the unstable market, it was not feasible
  to generate a housing finance system. Yet, even
  in the absence of a housing finance system, home
  ownership ratio has always been higher.

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• In the comparison made between Turkey and 3 EU
  member countries (Netherlands, Spain and
  Lithuania), differences in household and housing
  stock characteristics are demonstrated.
• Turkish households larger and Turkish population
  is younger. The differences require distinct
  housing policies which would end up in
  development of housing with distinct
  characteristics compared to EU countries.
• Turkish housing stock could be considered to be
  successful in quantitative terms and avaliability
  of basic facilities.
• Turkey has a well developed housing industry in
  terms of number of units produced annually. In
  some years, more than half a million units had
  been developed and the number of units exceeded
  the need for housing (Balamir, 1982).

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• Yet the absence of state intervention in
  development of the stock is evident. The stock
  and household characteristics do not match the
  requirements of each other revealing the absence
  of state and/or local intervention in housing.
• Recently, with the enactment of mortgage law,
  ratio of home ownership is expected to increase
  in near future. Although movements in the housing
  market gained impetus with the enactment of the
  law, the effects of the law are still unclear.
  Whether successful results like many European
  countries had, would also be gained in Turkey is
  indefinite.

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• Thank you