1. AUTHORS Prof. Dr. NIHAT ENVER ULGER Okan University Geomatics Engineering Department M. Sc. BEKTAS CEM ULGER Avrasya Land Management and Urban Regeneration Strategy Development Center M. Sc. CAN IBAN Okan University Geomatics Engineering Department M. Sc. SELCUK AYDEMİR Emlak Konut Real Estate Investment Trust Eng. MURAT KURUM Emlak Konut Real Estate Investment Trust A STRATEGY SUGGESTION: HOW A VALUE – BASED URBAN REGENERATION PROJECT CAN BE RIGHTEOUS IN TURKEY? Prof. Dr. NIHAT ENVER ULGER

2. Turkish Understanding for Urban Regeneration The current urban regeneration legislation does not define necessary terms and indicators, which brings a set of challenges. Yet, urban regeneration should be taken into account in consideration of an implementation of development plans. “Demolition of old buildings and constructing new ones” THIS IS WRONG!

3. Turkish Legislation for Urban Regeneration Expropration Law (#2942) It terminates the property rights. Development Law (#3194) equally proportional land deduction/area equivalence” not comprehensive for unsettlements Municipal Law (#5393) It gives authorization of implementing value-based urban regeneration to municipalities. But it has not got any implementation regulation, so it is impossible to execute. Law of “Regenerating Areas under the Risk of Natural Disasters” (#6306) It has an implementation regulation. However, it states neither a system, a criteria, an indicator, nor a method for the distribution of new properties. In case of any disagreement, it suggests only the expropriation as an alternative solution.

4. Stakeholders in Urban Regeneration Projects Local / Public Administrations Ministries Municipalities Other public administrations Property Right Holders (People) Municipalities Tresurary Persons Others Project Developers Valuation Design Planning Engineering Project management etc. Investors Financiers Financial Institutions Real Estate Investment Trusts

5. Some Numbers… Housing Need of Turkey: 700000 annually. Housing need for low-income: 75000 annualy. Produced: «0» Housing Need of Istanbul: 100000 annually Current Supply of Housing in Istanbul: 125000 annually Circa 140000 buildings have been defined as risky buildings so far. Construction Sector is the most dynamic one in Turkish Economy Why this happens? Because Turkey doesn’t have a land/housing policy!

6. A Righteous Urban Regeneration Strategy Urban regeneration is to define how new properties and property rights will be delivered and registered after implementing prepared development plans. Therefore we need; Urban Regeneration Policy A Law Development Plan Implementation Method Implementation Regulations Implementation Regulations Land Use Planning (Both Rural and Urban) Land Use Planning (Both Rural and Urban) Strong Financial Resources Strong Financial Resources

7. How should we manage the projects? All projects and reserved lands should support an integrative approach in implementation phases Urban regeneration projects will make sense as long as they are discussed in macro scale for all urban extent in an inter-connected approach and they must include a system that embraces other urban regeneration projects in the city Urban Regeneration Projects should be executed in Land Management and Land Use concept. LAND MANAGEMENT (Metropolitan / Provincial Municipalities) Metropolitan / Provincial or District Municipalities URBAN REGENERATION STRATEGY PLANS (1/25.000 scale) Urban Regeneration Project No.1 Urban Regeneration Projects No. 2-3.. Reserved Lands for Housing Implementation

8. Why Value – Based Method? The reason why value-based method is an obligation in urban regeneration implementations is the reality of the illegal settlements and the buildings that do not fit in with development plans in Turkey. fundamental problem: the use of property rights. The government of Turkey has tried to diminish the percentage of illegal settlement by amnesty laws for development rights. These settlements are now legal and their titles are registered, but this amnesty did not avert the violation of development law.

9. Why Value – Based Method? (Ulger Model) The legal and social dimensions! A method that removes the uncertainties about the participation and distribution values! Value-based Ulger method for convincing right holders and agreements (in a democratic way) A valuation method that tries to solve development plan violations / illegal settlements Actually, this is the core of Ulger Model.

10. Ulger Model The process of value-based urban regeneration projects consist of several phases.

11. Ulger Model

12. This redline cannot be crossed, unless all the right holders are satisfied and convinced about their participation values. The participation values here correspond to legal values and help to remove the problem of illegal settlements and development plan violations.

13. Ulger Model The 2 nd phase aims at making the project value definite. In the 3 rd phase the development plan for regeneration is validated principally and distribution values are made definite.

14. Ulger Model In 4 th phase, the development plan for urban regeneration is implemented after the validation of the municipality council. The titles of new properties are registered. The last 5 th phase includes the processes of demolition – construction and consignment of new properties to property right holders.

15. Discussion Urban regeneration in Turkey is a must. The buildings are sensitive to natural hazards (especially the earthquake) and urban risks, without sufficient infrastructure. Most of the buildings in Turkey are illegal and violating development law /plans. What are the current problems in Turkish Urban Regeneration?

16. Discussion Most of the urban regeneration projects do not stand on the decisions of development plans. The legal dimension of urban regeneration activities in Turkey is not sustainable, applicable and it does not embrace all the needs. The current urban regeneration legislation does not define necessary terms and indicators, which brings a set of challenges. Why urban regeneration projects is a must for Turkish cities?

17. Discussion The answer is the value-based method. Independent valuation firms valuate “participation values” of each right holders The sum of all individual participation values is called as “total participation value”. A distribution project must be performed for the whole project area whose results define the total project value for the purpose of distribution. This is called as “total distribution value”. These two terms “total participation and total distribution values”, are crucial and they are sine qua non for all kinds of value-based urban regeneration projects. What is the best method that sets up a legal relationship among investor, owner of property and the public? Which one is more righteous?

18. Discussion Ulger Model investigates deeply the mathematical distribution of project values to all stakeholder and it focuses on resolving the problems related with illegal settlements /development plan violations. This model has a foundation of scientific valuation methods and righteous welfare distribution among all kinds of societal and economic groups. Is ‘value-based Ulger method’ reliable and judicious in Urban Regeneration?

19. Discussion Ulger Model is reliable and judicious for Turkey, because it cares about all kinds of property rights. Especially, as being a country where a mix type of property rights can be occurred, such a system is required in order to combine all types of property rights in an urban regeneration area. Is ‘value-based Ulger method’ reliable and judicious in Urban Regeneration?

20. Discussion In recent years, construction sector has accelerated Turkey’s economic development. All new settlements add new values to right holders’ real estate. Ulger Model consists of the processes of the determination of participation and distribution values. In order to define the total participation value of the project area, the participation values of each real estate should be identified to be used in distribution mass. Therefore it is possible to calculate the rate of participation of each real estate to be the base of the distribution. Distribution value is the maximum possible profit value of the project. Each distribution value corresponding to each right holder can be identified as the value of the independent unit that the right holder would have after the urban regeneration project. Is ‘value-based Ulger method’ reliable and judicious in Urban Regeneration?

21. Discussion A model should be developed to distribute in a righteous manner among project stakeholders! Ulger Model has been developed for this righteous distribution. Is ‘value-based Ulger method’ reliable and judicious in Urban Regeneration? distribution value the sum of the participation value participation rate distribution amount that the right holders obtain DV = PV + PR * DA

22. Discussion Summary of the process of participation-distribution value PARTICIPATION VALUE FEASIBILITY ANALYSISPROJECT VALUE & PLANNINGDEFINING PROJECT NET BENEFIT AND CURRENT VALUE SHARE MODEL FOR DISTRIBUTION DISTRIBUTION VALUE

23. Thanks for your attention!