The urban renewal program has been serving several policy objectives and its scope has been widening for a decade. Urban renewal has been a part of the central governments’ program since 2003. In the period of 2003-2007, the government initially introduced urban renewal projects as a tool to modernize the informal settlements, particularly gecekondu areas in large metropoles.107 Urban renewal legislation was very simple, and implementation was carried out on a project basis. In the next government’s term, urban renewal projects spread across the country. The mass housing administration (TOKI) was the main actor in delivering the urban renewal projects.
These projects were basically government-led, supply-side interventions in the housing market and also promoted homeownership among low and middle-income groups. The period of 2007-2011 is the third term that the central government pursued the urban renewal agenda as a national policy.108 The government started implementing urban renewal policy more aggressively as a part of a broader policy agenda. In this context, the urban renewal program turned into a policy tool for market-oriented economic growth strategy run by investments in urban land, housing, and infrastructure. Revisions in policy objectives over the course of a decade gradually
107 59th Government Program for the period of 2003-2007, page 11.
transformed urban renewal into a national economic development strategy that aimed to build competitive cities and labeling those as the engines of economic growth.109
Rapid transformation of the urban renewal policy objectives stimulated an intricate relationship between the implementation of the projects and the local economy. Urban renewal transformed from a project based modernization/slum-upgrading effort into a nationwide initiative to increase the cities’ competitiveness for business activities. This transformation in policy objectives also involved a significant change in the roles of the state as well as the private sectors and the markets. This evolution of roles attributed to urban renewal also affects how the redevelopment program progress at the local level depending on the local economic circumstances. In this section, the basic economic model and the assumptions that explain the rationale behind the urban renewal program will be presented. Compatibility between the policy rationale and the realities of the local economies of each city on the ground determine the progression of the urban renewal agenda in each case. Attention will be focused on the population growth, employment trends, and housing market dynamics to explain how the local economic trends contradict or enhance the urban renewal agenda to explain how the planning environment of urban renewal is shaped differently across cities with diverse local economic contexts, problems, and priorities.
The central government basically assumes that this urban renewal will trigger economic growth. The process of demolition and reconstruction of large city parts, embroils a wholesale renewal of the living environments that consist of houses, infrastructure systems, and public facilities. This nationwide built environment renewal initiative translates into an urban renewal economy that is expected to cost USD 7 billion annually110 for the next 20-years. The government promotes urban renewal as an economic development strategy to address the rapid urbanization and growth in cities; urban renewal projects are seen as necessary to meet the
increasing housing demand in cities.111 The government’s strategy is to make urban renewal an attractive business activity for investors and thus, it aims to facilitate the private business activity to pursue the policy targets, since the public sector alone does not have enough resources to conduct the redevelopment on its own. In this setting, urban renewal projects have to offer profitable business opportunity to serve the government’s economic growth objectives through the designation of large pieces of urban land as renewal sites to attract private sector investment to deliver wholesale development projects across cities.
The economic rationale behind the urban renewal program is that urban renewal projects become a source of employment within the city. Construction involves a labor-intensive production process, so more urban renewal projects create more jobs, and not only in construction sector but also in several related sectors. The expectation of job creation to some degree explains why urban renewal has become a part of the economic development policy of the national government. Job creation and reduction in unemployment has both direct and indirect implications for the sustainability of the urban renewal agenda as an economic development policy. A high unemployment rate negatively affects the average income level, and it also reduces overall demand for goods and services. Job creation potentially increases the income level and this generates a demand for the new housing units produced by urban renewal projects. If there is no increase in the income levels, the local demand for new housing units is also weak. Therefore, the basic economic rationale behind urban renewal suggests that it has a positive impact on the economic growth performance mainly through job creation, and more broadly it potentially stimulates housing demand.
The basic economic model that rationalizes urban renewal program as an economic development policy relies on four strict assumptions:
1. Companies investing in urban renewal projects employ a local workforce (who will reinvest a share of their income in the new housing produced by urban renewal)
2. Urban renewal creates jobs that generate adequate income (for people to invest a portion of that in housing)
3. Households reinvest a portion of their income into housing that generates an increase in local housing demand.
4. Urban renewal business is sustainable and can be pursued as a stable economic activity
Figure 8.1 Basic Assumptions Behind the National Urban Renewal Program
Figure 8.1 summarizes how the four assumptions relate to each other and how these assumptions connect four fundamental economic indicators. The first assumption is that the redevelopment projects will be conducted by local businesses and they will employ local workers in these projects. However, both the central government and the local government make renewal project deals through national tenders. The larger companies that do business across the country are likely to outperform the smaller local construction firms that cannot compete with these major players in the construction sector. Increase in income is also possible through increasing job opportunities for people from different social and economic backgrounds. First, it is considered as a source of employment and second it is considered as a source of income.
There is concern about the composition of jobs created with urban renewal projects becomes important; what kind of jobs and associated income do these urban renewal programs create? Do that income levels sustain the demand that is necessary for the (new) houses supplied? The second and third assumptions are that the jobs created by urban renewal projects increase income. The growth in income is assumed to be partially reinvested in housing units produced by the renewal projects. The fourth assumption is the sustainability assumption. It proposes that the
Investment
urban renewal business is sustainable and can be pursued for years focusing on different city parts. This assumption is backed by some back-of-the-envelope calculations that rationalize the whole national urban renewal program as a long-term economic development project that generates growth, employment, investment, and income for the next 20 years.112
If these assumptions hold simultaneously both for city economies and for the national economy, only then would urban renewal serve the government’s objectives as a sustainable economic development tool. Only when these strict assumptions hold does the urban renewal program actually improve the physical standards of the living environment, quality of the housing stock, and contribute to the resilience of cities. However, these are strict assumptions, which are hard to meet in reality. If these assumptions do not hold simultaneously, then the implementation of urban renewal slows down and may take years to complete. The basic drawback of this protracted situation is to leave the residents in a state of ‘permanent temporariness’ (Yiftachel 2009, p.244). In this section, the findings will be presented on how this program set by the central government actually plays out at the local level. In addition, the presentation will examine the economic challenges that affect how the urban renewal agendas actually progress in cities and why urban renewal projects progress at a different pace in the cities studied. These insights will help explain the role of the local economy in the development of a new planning environment to address the displacement outcomes of urban renewal. The local economy plays an important role in explaining the potential for an alternative planning vision to deal with the designated renewal area residents’ displacement.
8.4.2 Cross-Case Comparison of the Political Economy of Urban Renewal
Urban renewal projects are essentially about demolishing the existing housing and replacing them with new buildings. These are large scale mass housing development projects that require investment, generate employment, and interact with a variety of market dynamics including supply and demand for housing. In this process, current residents are displaced from their living environments if they cannot afford to pay for the value increase due to the redevelopment that
reshapes their neighborhoods. Delivering those large scale housing projects depend on the feasibility of the partnerships between the public and the private actors from an economics standpoint. Trends in housing supply, employment, and growth in each case study city provide an important benchmark for explaining the progression of urban renewal program in different city contexts. Comparison across cities based on these indicators helps to assess the compatibility between the political will for the urban renewal program with the local economic realities. When the city economies go through a major downturn, the market dynamics do not facilitate the implementation of urban renewal projects. This assessment raises questions about the viability of the urban renewal targets as a nationwide program. When the urban renewal targets are economically unachievable, the program stagnates at the local level without any palpable progress. In planning environments of protracted urban renewal projects alternative planning visions to displacement are unlikely to flourish.
The city of Adana has been going through an economic downturn since early 1990s. The sources of the downturn can be traced to a combination of demographic changes and economic restructuring that affects the composition of employment. There has been a strong wave of outmigration of mainly the young and educated population to larger cities that have outperformed Adana in terms of growing job opportunities with better incomes. Some of the major employers have relocated their production plants and withdrawn their industrial investments in the city (Interview with Zekeriya). Relocation of the major industry triggered a significant increase in unemployment rates that put the city-level unemployment rate above the national averages. The combined effect of the major employers’ flight and increase in unemployment resulted in negative net migration figures in the last decade. There is no recent or impending structural or policy change that can potentially help Adana’s stagnant economy to move forward. This reduces the chances of any positive outlook in terms of growth performance of Adana’s city economy.
The negative economic outlook for the city’s economy directly affects the implementation of the urban renewal agenda in Adana. Considering that urban renewal projects’
basic promise to improve the housing stock both in terms of the quantity and quality of building standards, Adana’s local economic conditions do not necessarily accommodate an ambitious supply-side housing market intervention in the form of neighborhood scale urban renewal
projects. Basically, there is no particularly active demand for new housing development in the city. Residential permits data from 2002 to 2014 show that the private sector has been the major producer of the new housing stock in the Seyhan district, where the public sector and the building cooperatives have been minimally contributing to the housing. The planning process for renewal projects in the last decade indicates that there is a clear political will for redevelopment. Urban renewal has been a part of the city’s development agenda (note the years of the strategic plans that include urban renewal agenda). In the case of Adana in general, and in Seyhan district in particular, there is no viable market demand that will induce high economic returns to large scale housing projects investment. Recent trends in the local economy play an important role in determining the expected returns to redevelopment in designated renewal areas.
In the context of Adana, notwithstanding the decisive political will of the government for large scale urban redevelopment projects, project implementation has not made any substantial progress. When the political will of the government is not backed by basic economic factors, urban renewal program also stagnates, as is the case of Seyhan. The preliminary plans and architectural renderings of projects for renewal in designated renewal areas have been ready for years, but the local government has not been successful in attracting business interests to start investment in redevelopment. This dormant phase of urban renewal in Seyhan reduces the chances for a development of an alternative planning response for the displacement prospects for the current residents of the designated renewal areas. The case of Adana shows that when the urban renewal is a not supported by basic market dynamics, the political will for the redevelopment is not enough to pursue the renewal program. In Adana, residents in designated renewal areas do not develop any critical or supportive response to the ongoing urban renewal planning process. Although the residents are concerned about their continued residency at an individual level, the conditions for collective action and active resistance have not emerged under these circumstances.
In contrast, the local economic trends in Bursa in general and in the Osmangazi district in particular, reveal a growing city that attracts both people and investment. Bursa is among the largest metropolitan economies around the world according to dual measure of growth based on GDP per capita change and change in employment (Brookings Institution 2015, p.12). There are major industrial producers operating in the city from various sectors like automobile, textile, and