| 4. In which ways is the initiative creative and innovative?
TOKİ has developed a comprehensive approach toward elimination of the housing problem in Turkey by producing low-cost solutions to the narrow- and middle-income citizens against the housing and urbanization problems of Turkey. Although the administration faced several changes in the course of the period it was active, such processes reinforced the ability of TOKİ to develop approaches with a focus on solutions.
Particularly in the period of office of the new governments in the last 11 years, 25 laws were passed and comprehensive legislation amendments were put into effect to overcome bureaucratic prohibitions, to realize resources of finance, to pave the way for rapid organization and mobilization to allow the Administration realize its objectives.
The housing development projects of TOKİ not only meet the accommodation needs which constitute a human right, but also are socially integrated settlements where necessary facilities for health, education, sport, belief and resting needs are considered. TOKİ also makes serious contributions to settlement of a modern planning understanding in our country.
Its benchmarks in the activity process are as follows chronologically:
1982 • Articles 56 and 57 of our Constitution have put forth that every Turkish Citizen has the right to healthy and modern housing, and the State is liable to take measures to meet such need and to support housing development projects.-
1984 • Housing Development and State Partnership Administration reporting to the Prime Ministry have been formed to support housing development projects.
• With the Law on Housing Development, the principles and framework of provision of housing and creation of loan possibilities were put forth. The law also established the Housing Development Fund beyond the general budget for housing and housing production activities. Approximately 580 thousand citizens benefited from the loan possibilities offered by the Housing Development Fund between 1984 and 1987.
1990 • With the Decrees with the Power of Law numbered 412 and 414, Housing Development and State Partnership Administrations were divided into two, and were restructured as State Partnership Administration and Housing Development Administration (TOKİ).
1992 • TOKİ was commissioned about restructuring of the buildings and substructure in Erzincan, which were heavily damaged due to the earthquake that occurred in Turkey.
1994 • TOKİ, providing housing loans to hundreds of thousands of low- and middle-income families and successfully implementing Erzincan Earthquake Restructuring Project, was awarded with HABITAT Certificate of Honor by the United Nations.
1996 • Istanbul hosted HABITAT II, the Second Human Settlements Conference of the United Nations, with the organization of TOKİ. Participants nearly from all countries of the world discussed the problems and remedies with regard to formation of the shelter, substructure and social facilities the world needs.
2001 • Housing Development Fund was abolished. The banking activities pursued by Emlak Bank have been transferred to Ziraatbank and Halkbank. The assets as well as Real Estates excluding its banking activities were also transferred to TOKI as investment capital.
2003 • The Emergency Action Plan suggesting construction of 250 thousand houses by the end of 2007 for Housing and Urban Development took effect on the 1st of January. • Housing Undersecretariat was abolished with Law numbered 4966 and its duties were mostly transferred to TOKİ. In this context, TOKİ undertook the duties of granting individual and housing development loans, realizing projects within the country and abroad, and to pursue profit-oriented projects to earn revenue. In addition to construction, if deemed necessary, of housing in regions damaged due to natural disasters, the Administration has also been conferred the responsibilities of encouraging and supporting housing production throughout the country.
2004 • With the Law numbered 5104 ratified by the Parliament, TOKİ and Ankara Metropolitan Municipality were authorized to plan, develop and realize housing developments, substructures and social facilities in order to ensure transformation of urban spaces. Toplu Konut - Büyükşehir Belediyesi İnşaat, Emlak ve Proje A.Ş. (TOBAŞ), whose company shares pertained to TOKİ by 49,9% was established to offer consultation on the project. • With the amendments imposed via this Law on the Housing Development Law numbered 5162, TOKİ was vested in the authorities to plan and implement projects toward discharge of low-quality houses. With these amendments, TOKİ has been granted the right to prepare zoning plans and to make necessary regulations when necessary. Besides, the authorities to expropriate, in case public benefit requires, unoccupied lands and buildings, and to plan and implement financial regulations were also granted for slum transformation projects. • The duties and responsibilities of the Land Office repealed with the Law numbered 5273 have been transferred to TOKİ. Such transfer also involving transfer to TOKİ portfolio of 64.5 million square meters of real estates throughout Turkey diminished bureaucratic processes and paved the way for more efficient use of lands by the Administration. • TOKİ took over the supervision of 14% shares of Vakıf Emlak Gayrimenkul Yatırım Ortaklığı A.Ş. (Vakıf Emlak Real Estate Investment Trust, Inc.) to diversify its portfolio and for higher revenues.
2005 • Law numbered 5366 providing necessary finance for restoration and preservation of the historical and cultural areas was ratified.
2006 • With the Housing Convention it arranged in Istanbul, TOKİ presented before national and international participants its practices toward provision of modern housing solutions to citizens. The convention gathered speakers and participants from eight countries.
2007 • In Barcelona Meeting Point organization, TOKİ was conferred the “Best International Real Estate Project” reward due to its experience in its initiatives and success in development of the economic and social conditions of Turkish citizens. • The targets set for a period of five years being surpassed by 35 thousand houses, the total number of houses constructed by the end of 2007 reached 285 thousand.
2008 • Expo Italy Real Estate awarded the “International Entrepreneurship Award for Real Estate and Housing Production” to TOKİ. TOKİ was presented as candidate to the Best Habitat Practices in the organization of Dubai Municipality.
2009 • Northern Ankara Entry Urban Transformation Project realized by Toplu Konut – Büyükşehir Belediyesi İnşaat Emlak Mimarlık ve Proje A.Ş. (TOBAS), a partnership of TOKİ and Ankara Metropolitan Municipality, was elected one of the Best 26 Implementations of 2009 by Habitat Business Award Election Committee that gathered between 25-26 May 2009 in Peking city of China to determine whom the UN-HABITAT Business Award should go to . EIRE Award was conferred upon the TOKİ president by the organization committee of EIRE International Real Estate Fair held in Milano city of Italy, thanks to his contributions to his country for social housing implementations.
2011 • An international Housing Convention with the theme “Innovative Housing Approach, Strategies, Implementations and Urban Transformation; Urban Transformation Rally for a Natural Disaster Risk Free Turkey” was arranged by our Administration in Istanbul on 03-04 March 2011.• TOKİ launched production of 500 thousand houses throughout the country as of the end of 2010 within the scope of Planned Urbanization and Housing Mobilization in line with the Government Programme. The target of production of another 500 thousand houses by 2012 was set for the Administration.
2012 • The Law “on Transformation of Sites under Disaster Risk” dated 16 May 2012 and numbered 6306 prepared the Ministry of Environment and Urbanization imposed significant duties on TOKİ.
| 5. Who implemented the initiative and what is the size of the population affected by this initiative?
TOKİ’s primary objectives are the activities it pursues within the scope of its duties described in the Housing Development Law numbered 2985 as well as to produce solutions at national scale to problems regarding housing and urbanization in our country.
Also adopting the principle of “Adequate Housing for Everyone”, one of the main themes of United Nations Habitat, the Administration shapes its policies and activities within the framework of the targets our Constitution imposes on the State as well as those included in the Universal Declaration of Human Rights, the Government Programme the Emergency Action Plan, and coordinates with the public and private sectors, NGOs and academic environments when necessary, to implement the government decisions on the existing housing and settlement policies.
The size of our projects is first determined via the method of demand collection as organized by concerned Governorships, District Governorships or Municipalities primarily in the housing production process, and implementation is then started having determined the needs of the local people through local administrations via studies such as selection of location, production of plans and projects etc. at the implementation sites.
The zoning planning studies of the project sites are made within the framework of the terms and conditions set forth in the Zoning Law and concerned regulations in view of criteria such as topography, climate conditions, population structure of the region in line with opinions of all investor establishments in unplanned areas.
TOKİ also constructs several social-purpose facilities such as facilities of health, education, security, dwelling houses, sport centers, affection houses for orphans, non-handicapped life centers, libraries and dormitories in line with the demands of public entities and organizations where needed. In this context, construction of 941 schools, 13 university campuses, 143 dormitories/boarding houses, 217 hospitals, 94 village clinics, 14 stadiums, 965 gyms, 20 Non-Handicapped Life Centers, 35 Affection Houses, 7 Nursing Homes, 41 libraries, 102 public utility buildings and similar buildings have been started totaling to 5.128 social facilities, most of which were inaugurated.
All implementations realized by our Administration are conducted with public-private sector cooperation.
Besides joint study platforms are formed to evaluate and to develop the physical, social and economic results of the implementations of our Administration along with all participants of our projects as well as the public, and joint R&D efforts are performed with academicians and NGOs.
| 6. How was the strategy implemented and what resources were mobilized?
The primary incomes of TOKİ consist of revenues from the sale and rents of houses, work places and land, loan reimbursements, interest incomes, subsidy allocated with the budget laws and fees for departure to a foreign country, and the service fee amounts collectable from concerned entities and organizations between 3-10% of the construction cost of the constructions made in the name of government agencies.
Besides, the Administration has gained a comprehensive land stock on transfer of the non-banking real estates of Emlak Bank upon its shutdown in 2001, and also assignment of the duties and responsibilities of General Directorate of Land Office resulting in coming under TOKİ’s possession of 64.5 million m2 of land in 2004.
TOKİ constructs houses on such lands, and puts those houses to sale providing loans. To do so, affordable payment conditions are determined to allow low- and medium-income families who cannot afford a house in the current market conditions but still have a certain level of savings to buy houses under terms and conditions like paying rent through suitable payment terms.
In this model, 10% to 40% of the house price is collected in advance in view of the affordability of the target mass, and the remaining portion of the same is extended over a maturity of 36 to 240 months.
In order to ensure new housing development production and provision of loans via the limited possibilities of our Administration, the loan reimbursements and payments of housing installments are regulated semiannually pro rata the civil servant salary increases.
On the other hand, TOKİ has developed different finance sources while pursuing its activities with its limited resources.
Furthermore, funding is provided to fund raising projects by zoning of the lands received in return for works to government entities, which are mostly encumbered, annotated, unplanned. This model both ensures that the lands of the public are made use of, and funding is thus provided to TOKİ and consequently the state, and improves urban life quality entailing development of quality environments through funds formed for housing projects toward low- and middle-income people. Besides, with this model that is applied without state subsidy and without utilization of public finance on the areas owned by the Housing Development Administration, lands purchased from the treasury or corporations at their prices and then zoned are accepted as assets and contractor firms are awarded contracts via tender to build houses based on revenue sharing principle.
In this context, 87.358 houses were produced within the last 11 years in coordination with the private sector via the method of revenue sharing against land sale on valuable lands, bringing 11,5 billion dollars of funding to the public.
| 7. Who were the stakeholders involved in the design of the initiative and in its implementation?
1- TOKİ, with its mass housing projects for the narrow- and middle-income groups, meets 5-10% of the housing need in the country. These projects are non-profit social projects, and the ratio is approximately 85%. TOKİ has made significant contribution to becoming a house owner of the low-income group and the poor without possibilities of owning a purchasing a housing in the current market circumstances (the 20% bottom segment in income distribution).
2- TOKİ has also undertaken several different missions such as giving a healthy face and disciplining of the housing market via urban transformation. By constructing schools, hospitals, public utility buildings, sport facilities, security facilities, social and cultural facilities in cooperation with governmental institutions, the Administration has also undertaken a very significant mission in the field. Construction practices after national and international disasters, long-term cooperative loans, agricultural village projects for rural areas, interest-free loan possibilities to martyr families and restoration loans are also included in the mission of TOKİ.
3- TOKİ’s projects are meaningful in that they influence economic growth in our country in a positive way. These practices have become a significant element for prevention of off-the-books economy, and by contributing to employment, have been useful for improvement of contractors in housing construction, and training intermediate staff.
The projects constructed by TOKİ throughout the country are being equally distributed around Turkey, and contributed to reduction of the real estate sales prices and rents. It has been seen that “house ownership” is a sector with the highest share in GNP in 2003-2010 period.
The contribution of TOKİ implementations is great to the increasing rate of house ownership. By production of 610 thousand houses within the scope of these implementations, quality housing stock has increased and contribution was made for access to housing.
4- The total housing figure reached by TOKİ from 2002 until today is noteworthy in terms of quantity. This figure corresponds to 23 cities with populations of 100 thousand each. In these projects, TOKİ offers not only housing but also modern life possibilities to those in need in addition to all necessary social facilities (school, hospital, trade center, etc.). TOKİ not only leads in offering sound, quality and safe settlements with contemporary possibilities to the target groups, but also tries to form a new planned urbanization and housing production understanding.
5- Since 2003, TOKİ has carried out urban transformation projects in cooperation with local managements within the framework of legal regulations realized due to the target of “prevention of slum formation and unplanned building” included under the title “Emergency Action Plan, Social Policies” of our Government. With the joint study, it was targeted that our local managements rapidly deal with and include slum transformation areas in urban areas with participation of all beneficiaries. The urban transformation projects in Turkey have become a state policy today. In this sense, TOKİ’s practices constitute a model for local governments and other actors of the housing sector. TOKİ not only transforms slum and shanty settlement areas, but also tries to prevent formation of new slum areas with the houses it produced for narrow-income groups.
In this context, slum transformations were planned for a total of 264.811 houses in 222 projects in line with the major urban renewal programme launched by us in joint efforts by local managements upon the instruction of our Prime Ministry. Tender works for 95.440 houses in 193 different regions have been made, 84.441 houses have been started under 170 projects whose tenders are complete, and construction of 51.246 houses have been completed and the houses were delivered to the beneficiaries in 89 regions.
(In 2008, TOKİ’s Erzincan-Çarşı Quarter Urban Renewal-Slum Transformation Project was selected as a “Good Practice” in the Habitat Best Practices Award organization. Besides, North Ankara Entrance Urban Renewal Development Project was selected as one of the “Good Practices” for the year 2009 by the international selection committee of the UN-Habitat Business Awards, China.)
6- Not only the lands owned by the public are utilized having been zoned to bring revenues to the state through fund raising projects against land sale for the high income group realized in addition to social housing practices but also funds are formed for low- and middle-income groups via the finance provided from the same.
In this context, TOKİ model has increased its level of recognition at international platforms as a story of success, and is being carefully monitored particularly developing countries. TOKİ has close studies and negotiations with countries willing to implement TOKİ model. At international scale, the housing construction or knowhow demands of approximately 85 countries from TOKI are at evaluation stage, and negotiations are in progress.
| 8. What were the most successful outputs and why was the initiative effective?
TOKİ is not a competing corporation in housing sector of Turkey with its developed models but rather undertakes an umbrella-like duty with a guiding, supervising and training responsibility.
TOKİ is an administration which is always in the limelight in the public opinion. Therefore, it is highly important that its corporate image is equally distant to stakeholders, responsible, accountable, and transparent.
Since 2007, TOKİ procures international rating service from international credit rating institutions Fitch Ratings and Moody’s like determination of its credibility and borrowing capacity at international markets (Fitch Ratings (12 November 2012); TOKİ has increased its long-term foreign currency credit rating to “BBB-“, and local currency credit rating to “BBB", and its long-term national credit rating is “Α(tur”, and appearance “stable”. Moody’s (17 May 2013): TOKİ long-term exporter rating Baa3/Aa3.tr, credit appearance “stable”)
Furthermore, all activities of TOKİ are under audit and supervision by Turkish Grand National Assembly “State Economic Enterprise” Commission, and Audit Court Chairman.
| 9. What were the main obstacles encountered and how were they overcome?
1. Since TOKİ is an investing, implementing and land developing public administration, it has joint studies with several corporations (Treasury, Exchequer, Municipalities, Electricity Transmission and Distribution Companies, Natural Gas Distribution Companies etc.). The Administration undertakes, whenever necessary, some works normally supposed to be performed by other corporations in the bureaucratic system, and tries to minimize probable difficulties in his/her work schedule.
2. There are nearly 300 thousand active or unemployed civil engineers in the construction sector in our country. It occasionally gives negative results that particularly unqualified ones among those contractors are awarded jobs in the market (approximately 30%). New legal regulations have been started on the subject since 2012.
3. TOKİ’s legal and financial structure have been reorganized within the last 11 years, and 25 new legal regulations have been passed. These laws eliminated some technical and financial bureaucratic prohibitions before the housing construction process, as a consequence, TOKİ, without any share from the general budget of the state, and without being a burden to the state treasury, gained a self-funding, more autonomous structure with high maneuverability and quick action capability.