Speakers
Description
Urban areas face interconnected crises, including natural disasters, environmental issues, extreme climate changes, social and spatial inequalities, and displaced communities. Growth-oriented development models exacerbate these challenges by undermining ecological balance, social justice, and resilience. In Istanbul, a city with high earthquake risk and similar vulnerabilities, the need for earthquake-resistant housing is a pressing concern. However, renewal or retrofitting processes for existing buildings pose significant challenges for individuals and institutions alike.
Istanbul’s location near active fault lines places it at serious risk of earthquakes. A large portion of its building stock was constructed before the 1999 Marmara Earthquake, rendering much of it non-compliant with modern seismic standards. This problem is compounded by the rapid and unplanned urbanization during earlier decades, often without proper engineering oversight. Consequently, it is critical to make Istanbul’s buildings earthquake-resistant as quickly as possible.
The October 23, 2023 report by the Commission on Public Works, Reconstruction, Transportation, and Tourism highlights the urgency of this issue. According to the report, approximately six million houses across Turkey are at risk, with two million independent sections requiring immediate transformation. Since the enactment of Law No. 6306 in 2012, only 2.2 million independent units have been transformed, accounting for just one-quarter of the urgent need. The persistent disaster risks not only exacerbate physical vulnerabilities but also deepen social and economic inequalities. Low-income groups face significant barriers to accessing safe housing due to high costs and limited post-disaster response capacities. Addressing these risks in Istanbul requires inclusive and sustainable solutions that cater to both individual and societal needs.
This study examines the economic sustainability of urban renewal and retrofitting processes and their implications for spatial justice. It compares transaction costs and value increments associated with two housing projects in Kadıköy District, a hub for urban renewal and retrofitting in Istanbul. These projects were selected from non-conservation areas under the local spatial plan. The analysis spans the entire process, from initial decision-making to administrative procedures and implementation. Transaction costs, including time and monetary expenses for each step, are calculated. Furthermore, the study assesses changes in housing prices before and after renewal or retrofitting in the same locations.
Transaction cost theory offers a lens to analyze the expenses incurred during economic decision-making processes due to information asymmetry, bureaucratic barriers, negotiation challenges, and implementation difficulties. This theory is particularly relevant for understanding the complexities of urban renewal projects, where interactions between individuals, institutions, and public authorities play a pivotal role. Transaction costs extend beyond direct monetary expenses to include time, labor, and administrative efforts. Factors such as lengthy decision-making processes, collaboration with local authorities, and complex legal requirements significantly influence these costs. Understanding and addressing transaction costs is essential for developing policies and strategies that enhance economic sustainability and spatial justice.
The findings of this study are expected to highlight the differences in transaction costs between retrofitting and demolition-reconstruction methods and analyze how these differences impact housing value increases. While demolition and reconstruction projects typically involve higher transaction costs, they may result in greater market value appreciation than retrofitting. Conversely, retrofitting is anticipated to offer a more sustainable approach with lower transaction costs.
This study not only compares economic value and transaction costs but also underscores the importance of re-evaluating spatial planning processes through the lenses of justice, accessibility, and ecological sustainability. Given Istanbul’s earthquake risk and economic constraints, the results provide valuable insights into how spatial planning can function as a transformative tool in times of crisis.
References
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Ando, S. 2012. “Evaluation of the policies for seismic retrofit of buildings”, Journal of Civil Engineering and Architecture 6 (4), 391–402.
Buitelaar, E. (2007). The Cost of Land Use Decisions:Applying transaction cost economics to planning & development. Oxford ; Malden, MA: Blackwell Publishing Ltd.
Coase, R. (1937). The Nature of Firm. Economica, 4(16), 386-405.
Comerio, M.C. 2014. “Disaster Recovery and Community Renewal: Housing Approaches”, Cityscape , 16, (2), Form Follows Families: Evolution of U.S. Affordable Housing Design and Construction, 51-68.
Dökmeci, V., & Berköz, L. 1994. “Transformation of Istanbul from a monocentric to a polycentric city”, European Planning Studies, 2(2), 193-205.
İPA 2024. Kentsel dönüşümde reserv alan ve riskli alan kavramlarına ilişkin bir değerlendirme, Kent Gündemine Bakış, İstanbul
Ozus, E., Türk, S. Ş., Dokmeci, V. 2011. “Urban restructuring of Istanbul”, European Planning Studies, 19(2), 331-356.
| Keywords | Urban renewal, retrofitting, transaction costs, value increase, Istanbul, Turkey. |
|---|---|
| Best Congress Paper Award | Yes |
