Turkey - Housing Project

Report No. PIC1732 Project Name Turkey-Housing Project (@ +) Region Europe and Central Asia Sector Urban Development Project ID TRPA9070 Implementing Agency Housing Development Administration Bilkent Plaza, Blok B-1 Bilkent 06530 ANKARA Turkey Mr. Hamdi Karadas, President Tel No. 90-312-266-7680 Fax No. 90-312-266-7723 Date this PID Prepared April 17, 1997 Appraisal Date September 1997 Projected Board Date April 1998 Objectives The main objectives of the project would be to (a) increase the production of housing affordable to families below the 40th percentile of the income distribution in the Southeastern cities of Adana, Gaziantep, Sanliurfa and Diyarbakir; and (b) develop a policy framework facilitating well functioning land and housing markets. Description The above objectives would be achieved through an investment component that would finance land development and house construction through HDA and a policy component that would (a) diagnose recent performance of the market for urban land and identify constraints to supply of land for housing; (b) evaluate the impact and performance of housing policy instruments and programs; (c) identify and elaborate policy measures to improve the performance of the land and housing markets and to support the development of a market-based housing finance system, including more appropriate subsidy vehicles. The policy component is expected to propose policy reforms to change the public sector role from direct intervention to an enabling role. Implementation The Housing Development Administration (HDA) would be the implementing agency and would be responsible for executing all components of the project. All project consultant services, goods and civil works would be procured from the private sector, which is HDA's current practice. Participation by target beneficiaries and the municipalities will be a prominent feature of project preparation and implementation. Social assessments and market analyses are being conducted in each city as part of the feasibility study and design of the housing units and sites will  involve active client consultation. It is expected that a significant proportion of the housing units will be constructed by the project beneficiaries themselves with the assistance of local artisans and under guidance of the HDA. The policy component is being undertaken by HDA with the active participation of the State Planning Organization and other interested agencies and academic institutions. It is expected that the Bank will finance civil works and housing construction. Procurement arrangements will follow Bank Guidelines. Cost and Financing The cost of these components and financing arrangements are not yet defined in detail (design consultants have been hired and are expected to complete their work August 1997) but current estimates foresee a total project cost of about US$100 million of which about half would be funded by the Bank. Sustainability Ownership of the project by the concerned municipalities, well- targeted subsidies and affordable housing designs appropriate to local housing markets will help to ensure the sustainability of the project. Lessons Learned from Past Operations This would be the first Bank-supported operation in the housing sector in Turkey and there is no prior Bank experience on which to draw. However, lessons learned in housing and urban projects Bank- wide (as summarized in Two Decades of Urban Lending, OED Precis No. 81 of December 1994) are being incorporated into project preparation and design, such as: (a) the importance of realistic assessments of housing demand, affordable products and appropriate designs; (b) the need for strong borrower and final beneficiary ownership; (c) the significance of secure land tenure to poor households; and (d) the importance of targeting specific income groups with specific eligibility criteria for poverty reduction. More recent housing sector experience Bank-wide calls for focusing public sector efforts on developing an enabling housing policy which permits the markets to work. Poverty Category While intended to provide affordable housing to lower income households, this project is not classified as a poverty-reduction operation. Environmental Aspects Assessment Category B. The first phase of the Environmental Assessment, completed in November 1996, found no major problems. A second phase, to be undertaken after completion of the detailed design for each site, is expected to be completed by September 1997.  Program Objective Categories The project would entail significant private sector involvement through the hiring of private contractors for civil works and housing construction and through the self-building of houses by the beneficiaries. The recommendations of the policy component would also lead to a greater role for the private sector in housing. The gender impact of the project is expected to be positive through the application of eligibility criteria ensuring access to female- headed households. Affordable designs, targeted subsidies and careful beneficiary selection will ensure that benefits go to the intended low income beneficiaries. Project Benefits The project would improve living conditions and provide secure tenure for around 10,000 lower income households in four cities in the poor Southeastern region of Turkey. In addition to improved housing with access to healthy water and sanitation and to community facilities for the beneficiaries, the concerned municipalities would benefit from reduced squatting and the introduction into the housing market of new products affordable to lower income households. Another major benefit would be a rational policy framework to address constraints to a well-functioning housing market. Project Risks The main risks in this project would be (a) a still unclear commitment by Government to a revised policy framework to deal effectively with politically sensitive subjects such as the role of the public sector, the land market, housing standards, interest rates and targeting of subsidies and (b) possible resistance by Government and the target beneficiaries to accept for the poor Southeastern region more modest housing solutions than heretofore provided in public programs. These risks would be mitigated by careful preparation focused on participation of Government stakeholders in the definition and monitoring of policy studies and policy reform proposals, as well as participation by Government stakeholders and the target beneficiaries in the iterative design process. Contact Point: Henry Boldrick, Task Manager The World Bank 1818 H Street N.W. Washington, D.C. 20433 Tel: (202) 473-3572 Fax: (202) 477-1386 Note: This is information on an evolving project. Certain components may not necessarily be included in the final project. Processed by the Public Information Center week ending April 25, 1997. -3 -  ANNEX LOW INCOME HOUSING PROJECT IN SOUTHEASTERN TURKEY ENVIRONMENTAL IMPACT AND MITIGATION EXISTING CONDITIONS The client (Housing Development Administration) has carried out preliminary environmental impact assessments in the four project cities. The main characteristics of the four development areas are: - In Adana (population around 2,000,000), the development area is situated south of the city center, in the Yuregir district where low income people generally settle. The area is surrounded by Saricam Creek in the northwest, suburban settlements in the north, E5 highway and an irrigation canal in the south, and the meat-fish corporation facility in the west. The site is 65 ha. in area and is planned for development to accommodate 19,000 people. The land was formerly used for agricultural activities. - In Sanliurfa (population around 750,000), the development area is situated west of the city, 6 km from the city center, south of the Urfa-Gaziantep highway. The area is close to a small artisanal/industrial zone situated on the other size of the highway. There is a quarry in the adjacent area to the west. There is no settlement or activity east and south, where the area is surrounded by low limestone hills. The area is 73 ha. and is to be developed for 18,000 people. Currently, it is used as pasture. - In Gaziantep (population around 1,200,000) the development area is located 3 km from the city center in a development zone already accommodating 7,500 housing units. There is a trade and industrial zone to the east, and an organized industry zone south of the project area. The area is 26 ha. and will be developed for 10,000 people. There is currently no activity on this land. - In Diyarbakir (population around 1,000,000 ), the development area is located within a development zone of 120 ha. (shanty prevention area # 5), of which 40 ha. have already been developed. The proposed area is bounded by the military airport to the south, undeveloped areas north and west, and a tributary of the Dicle (Tigris) River to the east. Parts of the site are currently being used for agriculture. The expected population for the developed zone is 30,000. MAIN ASPECTS TO TAKE INTO ACCOUNT IN THE DEVELOPMENT - Adana: the development area is well connected to the city, and the infrastructure services (electricity, telephone. water, sewerage) are available nearby. The climate is Mediterranean. The city is in a 3rd class (moderate risk) earthquake region. There are no valuable flora or fauna. -4-  The area is planted with trees, which are to be retained to the extent possible; and if not possible, new trees are to be planted. Stormwater management is important since the area is very flat. The final architectural design should also take into account the hot summer climate. - Sanliurfa: the development area is far from the city center, and the development plan is expected to create future links with the city. Water supply requires sharing the existing constrained resources of Urfa, which are due to be improved under the ongoing GAP project. Climate is mainly continental, with hot summers. The city is in a 3rd class earthquake region. There are no valuable flora or fauna. The existing stone cistern and the remains of stone excavation will be incorporated in the final design through creation of a recreation area. The final architectural design of individual houses has taken into account traditional house designs to cope with the hot summer climate. - Gaziantep: the development area is well connected to the city, and basic facilities and infrastructure are available. The city is in a 4th class (low risk) earthquake region. There are no valuable flora or fauna in the urban environment. The final design will incorporate a 22 m wide road in the northern part of the development area. - Diyarbakir: the development area is near the Tigris river, and susceptibility to flooding is to be investigated. The soil is prone to erosion. The climate involves hot summers and cold winters. The winds are predominantly north-westerly. The final design will look for solutions to cope with the road traffic on the site borders, high voltage electricity lines crossing the site, and industrial activities in the dominant wind direction. IMPACTS OF THE PROJECT The project will provide houses to low income people in the four project cities, and have positive effects on the local economies in these cities. In addition, the following local impacts are expected: - Adana: The area selected is well-suited for development. Social facilities (health care center, schools) will be provided as well as space for commercial activities. There is no negative impact expected other than temporary nuisances (dust, noise) during the construction period. - Sanliurfa: The housing development is consistent with the Urfa development plan. It will provide social facilities (health care center, schools), and space for commercial activities. The current pastoral activity (very limited) will be relocated. - 5 -  - Gaziantep: There is no negative impact expected other than temporary nuisances during the construction period. Social facilities (health care center, schools), and space for commercial activities will be included to the extent needed. - Diyarbakir: Social facilities (health care center, schools), and space for commercial activities will be included to the extent needed. The current limited agricultural activity will cease. MITIGATION MEASURES AND MONITORING OF THE PROJECT As mentioned above, there are no significant negative impacts linked to the development of these areas. Physical and environmental characteristics of the sites will be taken into consideration in the design to ensure the project success. The negative impacts of the construction phase will be limited through proven means of controlling noise, dust, and traffic. The monitoring of the project will be ensured through an active beneficiary participation during the implementation phase. - 6 -