A NEW APPROACH TO CONFRONT THE HOUSING CHALLANGE: HOUSING DEVELOPMENT ADMINISTRATION (HDA)

In order to solve the housing problem and to increase housing production at national level, the Housing Development Administration Fund Law (No: 2487) was passed in 1981. Three years later, in 1984, Housing Development Administration Law (No: 2985) came into force which allowed for keeping the already established Fund outside the regular budget allocating its comprehensive sources of income which were integrated to the economic activities, aiming at expanded practices in credit provision for housing and housing production. In the same year a new and legal entity, the Housing Development and Public Participation Administration was also established with Law No.2983 to ensure that the system was adequately operating.

Since the Housing Development and Public Participation Administration had to undertake two different functions, in 1990 Housing Development Administration was transformed into a separate entity with Governmental Decree No:412.

The Housing Development Law, numbered 2985, is a framework law, which sets the basic principles, which would give direction to the solution of the housing problem in Turkey whose provisions are particularly relevant in terms of organizational and financial aspects. The basic goal in establishing the Fund was to provide the required public support through revenues earmarked for this purpose and to provide the required services through an administration created for this purpose in order to meet the housing needs at the national scale and to achieve an orderly process of urban development.

Duties of the Housing Development Administration (HDA) are as follows:

Issuing internal and external bonds and any kind of stocks with or without state guarantee.

Deciding upon receiving credits from foreign resources to be used for the expenditure relating to its scope of activity upon approval of the Undersecretariat of Treasury.

Taking actions aimed at ensuring participation of the banks in financing housing; providing banks with credit to this end; and establishing procedures relevant to enforcement of this provision.

Supporting the industry related to housing construction or those who are involved in this field.

Establishing companies related with housing sector or participating in those that have already been established.

Subcontracting any research, projects and commitments, where deemed necessary,

Granting individual and mass housing credits; granting credits for projects intended for improvement of rural architecture, transformation of squatter areas, preservation and restoration of historical and regional architecture; and making interest subsidies for all such credits, where deemed necessary,

Developing projects both in Turkey and abroad directly or through the agency its participations; carrying out or appointing others to carry out applications for housing, infrastructure and social facilities,

Implementing or appointing others to implement profit-oriented projects to ensure sources to the benefit of the Administration,

Building, promoting and supporting construction of housing units as well as social facilities and infrastructures in locations where disasters take place, if considered necessary,

Fulfilling duties imposed by laws and other legislation.

Since the date of establishment of HDA, the priorities through the context of the solutions of housing and urbanization problem have been changed. In this framework, new functions were added to the Housing Development Administration Law numbered 2985 due to changes by law (No:4966) on 06/08/2003. These functions are:

Establishing companies related with housing sector or participating in those that have already been established (by the law on 05/05/2004, numbered 5162).

Granting individual and mass housing credits; granting credits for projects intended for improvement of rural architecture, transformation of squatter areas, preservation and restoration of historical and regional architecture; and making interest subsidies for all such credits, where deemed necessary.

Developing projects both in Turkey and abroad directly or through the agency its participations; carrying out or appointing others to carry out applications for housing, infrastructure and social facilities.

Implementing or appointing others to implement profit-oriented projects to ensure sources to the benefit of the Administration.

Building, promoting and supporting construction of housing units as well as social facilities and infrastructures in locations where disasters take place, if considered necessary.

In parallel, under the Law No:5162, dated 05/05/2004 which amends the Housing Development Law;

HDA is authorized to realize all kinds and scales of development plans, to have made all these type of plans and to alter these plans in areas determined as the mass housing settlement regions.

HDA is authorized to expropriate all the annexes and buildings on or inside the lands and areas owned by real and legal entities, within the framework of its duties under Law.

HDA is authorized to develop renovation of squatter areas for eliminating or regaining via rehabilitation to make construction implementations and to perform financial regulations. Also, in this framework, HDA is authorized to determine the construction prices under the realized construction costs, considering the income status of squatter areas regions' residents, current construction costs, natural disasters and current economic status of the provinces in which implementation is made.

After November 2002, HDA is affiliated with the Ministry of Public Works and Settlement. Then, in accordance with its founding Law, HDA is affiliated with the Prime Ministry under the Presidency's approval dated 15/01/2004.

Thus, with the latest legal regulations, crediting and supporting the projects towards preserving the historical construct and rural architecture are added to HDA's previously existing duty of renovation of squatter areas, which is one of the origins of modern urbanization.

Again, due to the targets defined with the Government's Emergency Action Plan within the context of adequate housing production and planned urbanization, there had been some re-organizational changes in the duties of the public institutions. In this framework, all the duties and the authority of the Urban Land Office have been transferred to HDA, with the Law no: 5273, dated 14/12/2004. Based on this legal arrangement, 64.5 million m2 of land has been passed on HDA's immovable portfolio. This Law will integrate the process of land development and housing production and will facilitate to provide efficiency in the aforementioned housing and urbanization implementations.

Hence, as reflected in its mandate, Housing Development Administration (HDA) is the single responsible public body within the housing sector in Turkey.

Since 1984, HDA has been acting effectively in providing affordable housing for the low and middle-income groups through innovative financial mechanisms. It has provided housing loans to approximately 1,2 million housing units by the end of 2004. Among this number, housing cooperatives have the biggest share. 84% of the housing units that were given credit have been produced by housing cooperatives and housing contractors.

In addition to the loans given to cooperatives, municipalities are also supported by HDA loans - facilitating new housing projects on lands they own for the provision of low-cost owner-occupied housing.