A comparative analysis on housing policies in Turkey and Lithuania.

ABSTRACT. The housing sector is a very important sector in the national economy worldwide. The greater importance of the housing sector is broadly defined, to include financing, upgrading, repairs, management, valuation, taxation and population. The article presents a comparative analysis on housing policies in Turkey and Lithuania. The housing strategies--their differences and similarities--of Turkey and Lithuania are presented in the article. Strategic principles and preferences of housing are analysed in the countries under investigation. Some economic aspects are underlined. The policies of social housing of investigated countries are presented. The housing problems of both analysed countries are described. Special attention is paid to sustainable housing and social cohesion in housing.

KEYWORDS: Housing; Housing Policy; Housing Strategy

SANTRAUKA

BUSTO POLITIKOS TURKIJOJE IR LIETUVOJE LYGINAMOJI ANALIZE

Feyzullah YETGIN, Natalija LEPKOVA

Busto sektorius yra labai svarbus sektorius visame pasaulyje. Didele itaka busto sektoriui turi finansavimas, remontai, valdymas, vertinimas, mokcsciai, gyventoju skaicius. Straipsnyje atliekama busto politikos Turkijoje ir Lictuvoje lyginamoji analize, pateikiami Turkijos ir Lietuvos busto strategiju bendri bruozai ir skirtumai, analizuojami strategiju principai ir prioritetai. Analizuojama gyventoju skaiciaus itaka busto sektoriui. Akcentuojami tam tikri ekonominiai aspektai. Istirta ir pateikta socialinio busto politika nagrinejamose salyse. Pateikiamos busto problemos dviejose analizuojamose salyse. Atskiras demesys nukreiptas i subalansuota busta ir socialine sanglauda busto srityje, taip pat apzvelgta busto nuomos rinka bei susijusios problemos. Pateikiama Turkijos ir Lictuvos SSGG analize.

1. INTRODUCTION

Numerous studies have been made concerning housing markets. However, when we look into the related literature we find out that there are few comparative studies between countries, and those that we have are generally focused on the cases observed in the developed countries.

Comparative studies provide general information on the concerned countries and detailed information on their social and economic situations and government policies. The information obtained from results of such studies has shown the way to the application for other countries.

Lithuania, which is among the countries subjected to such studies, regained its independence in 1990 and since then it undergoes a new transformation process. After its accession to the EU, implementation of an integration process started as a rapidly developing dynamic structure among the Baltic Countries. On the other hand, Turkey is another country, which achieved an important success on its way to EU membership on 17-12-2004 and which accomplished an important stage in the negotiation process.

Turkey is among 25 leading world countries according to its economic growth and is an important country due to its geopolitical position. It is also a continuously growing country open to outside policies, which have been applied after 1980.

Although economic and demographic dimensions of the mentioned countries differ, such common existing issues like corporal infrastructure and socio-economic aspects made it necessary to take certain similar measures with respect to the housing shortage and policies in particular, and it was the essence of this study.

Comparative studies between Lithuania and Turkey showed that both countries have developed policies according to their demographic and economic characteristics. Different strategies have been introduced according to government policies. It was observed at the end of the study that various financial and corporal institutions were established in both countries in order to satisfy housing shortage. By means of joint cooperation of the public and private sectors, studies on the housing shortage have been carried out and certain aids have been provided to help lower income groups to obtain dwellings. The housing shortage issue is a priority in order to ensure social justice and to meet housing needs, which is a constitutional right as well. However, in Lithuania, satisfaction of housing needs has a lower priority among other problems dealt with by the Government of Lithuania.

There are numerous studies about the housing sector and policies of different countries, for instance, Houston (2005) analysed theoretical aspects of housing and housing problems. Kim (2004) explored the nexus between housing and Korean economy. Lahr and Gibbs (2002), Cutts and Olsen (2002), Nothaft and Perry (2002), Ortalo-Magne and Rady (2002), Seko (2002) provided economic analyses of policy initiatives pertaining to housing vouchers, homeownership, and housing finance reform. Gallent (2005) concentrated on regional housing figures in England-policy, politics and ownership. Most of these studies deal with housing policies of various countries but there are only a few comparative studies between countries. The existing comparative studies aim at understanding the dynamics and features of various national housing policies. For example, Wong's (2004) study compares Hong Kong and Singapore and examines and compares the role of governments, private and public sectors of the said countries in matters related to housing sector. Belniak (2004) studied the situation of Polish real estate markets and housing sector in the European Union process. Ivanicka and Spirkova (2004) examined housing financing system of Slovakia in the process of EU integration. Housing policies are discussed in the studies of Keivani et al., (2004). The "Report of the Regional Workshop on Housing and Environment" of the United Nations Centre for Human Settlements (HABITAT) (UNCHS, 2000) is a very detailed work examining different countries on their environment-friendly construction practices and the role of private sector on housing supply in these countries; the report also examines housing policies of the countries, the situation of housing markets and reform efforts in these countries. In order to obtain information about countries and their housing policies, the role of the private sector is examined and housing markets of the countries are analyzed in detail in this report.

All of these studies provide a great deal of information about various countries. They give good examples on housing markets of some countries in the EU membership process; the examples could be very useful to Turkey, which is also in the EU membership process.

However, in contrast to the above-mentioned studies, this article contributes by investigating Lithuania, an EU member, and Turkey, a country in EU membership process, and deducts information by comparing these two countries.

2. HOUSING SITUATION

2.1. Housing situation in Turkey

Turkey has been facing a housing shortage since the 1950s when the industrialization process led to rapid urbanization. Low-income levels and poor living standards in the countryside and social and political disorder in certain rural areas forced a large number of people to migrate to large cities.

Until 1980, the government policies related to housing focused on encouraging the construction of social housing with government loans, providing tax exemptions and discouraging luxury houses via additional taxes. Unfortunately, the government was not successful in increasing the number of dwellings; the shanty house areas could not be improved and infrastructure remained insufficient.

Economic steps taken by the government in 1980 in order to improve the Turkish economy negatively affected the housing sector. Consequently, the housing deficit increased and investment in this sector decreased. However, the importance of the housing sector was realized when more than 300 sectors, which provided input for the housing sector, were also affected. From then on, government policies were changed towards the improvement of the sector, and investment in housing increased substantially. Some important steps taken to support this change were the establishment of the Mass Housing Fund and certain changes to encourage new dwelling unit construction.

In order to increase the number of homeowners, the government has provided loans for mass housing projects through social security institutions (such as SSK, Bagkur) as well as Turkiye Emlak Bankasi (Emlak Bank). Although this policy increased dwelling construction, it has not been successful in increasing the number of homeowners. In the 1980's, for the purpose of encouraging the construction of small houses, the loans given by SSK and Bagkur were contingent upon the fact that the houses to be constructed would not be bigger than 100 sq. meters. This policy could not be implemented successfully, and in 1998 this policy was abolished. During the recent bank restructuring, Emlak Bank was shut down and all banking functions merged with Halkbank. All real estate related activities are continuing under Emlak Reic.

Given the rapid urbanization of the population, the aggregate demand for housing has exceeded the aggregate supply. The government has failed to solve the housing problem, although improvements have been made. Today, the government is still working on the problem with various approaches but the number of luxury and shanty houses is increasing more rapidly than the needed social and mass housing.

Turkey's population is estimated to be 69,63 million by mid-2002 and the population growth rate is approximately 1,5% per year. The local civilian work force is about 22,4 million. The population is much younger compared to European countries. Approximately 70% of the population is below the age of 35 (see Table 1).