The Government of Turkey has been working to accelerate urban transformation to increase the resilience of the urban built environment, and in particular housing, to earthquakes and other natural hazards such as floods, landslides, and climate change. Most housing stock in Turkish cities built prior to 2000, when modern seismic building codes were introduced, is highly vulnerable to seismic and climate hazards and requires urgent strengthening. It is estimated that about 6.7 million residential buildings across Turkey require structural retrofitting or reconstruction at an estimated cost of US$ 465 billion. So far, only about 4 percent of these buildings were transformed. Given the scale of the urban transformation goal, available public funding mechanisms to support resilient retrofitting or reconstruction of housing at risk are not sufficient to meet the massive financing needs. There is a need to develop additional financing methods to make resilient housing retrofitting and reconstruction accessible to homeowners, especially those belonging to middle and lower-income groups, so that they too can be a part of the urban transformation process. The World Bank has been providing technical assistance to the Ministry of Environment, Urbanization, and Climate Change (MoEUCC) of Turkey to tackle this important urban resilience challenge.
As part of this technical support, the World Bank organized a Virtual Knowledge Exchange for MoEUCC representatives with the Japan Housing Finance Agency (JHF) on December 21, 2021, with support from the Japan-World Bank Program for Mainstreaming Disaster Risk Management in Developing Countries. The purpose of this virtual event was to share the Japanese experience on providing homeowners with financial assistance for housing upgrading and retrofitting to mitigate the impacts of seismic and flood hazards. JHF is an incorporated administrative agency, owned by the Government of Japan, that provides funds to households in Japan for constructing, purchasing, and rebuilding houses, mainly by purchasing of long term fixed-rate mortgages.
Through the Virtual Knowledge Exchange, the MoEUCC representatives learned how JHF has been contributing to increased resilience and energy efficiency of housing in Japan, by purchasing long-term fixed-rate mortgages applicable to high quality housing from financial institutions which in turn provide such mortgages to individuals for their residential properties. JHF representatives shared their expertise in providing mortgages for post-disaster reconstruction of affected housing and mortgages for seismic and landslide-related housing retrofitting and other works to enhance disaster preparedness. In addition, JHF representatives shared experiences from their financing operations, providing details on eligibility criteria, roles and responsibilities of different agencies involved, JHF’s technical inspections, and lessons learned.
JHF elaborated on how their operations contributed to promoting high quality housing. JHF requires higher technical standards and rigorous inspections, and they have introduced Japanese Government subsidy-applied mortgages, which are interest rate deducted mortgages, to increase high quality housing, not only in terms of resilience to natural hazards, but also in terms of durability, energy efficiency and inclusive design. Past disaster events have proven the effectiveness of JHF’s programs in reducing damage and loss of housing. During a lively Q&A session, JHF answered questions on the loan mechanism, loan application criteria, and technical inspection process of JHF’s long-term fixed-rate mortgages.
Through the virtual knowledge exchange, MoEUCC officials learned about many design features of different financial mechanisms to support seismic- and flood-resilient housing in Japan that are relevant for addressing the challenges faced in Turkey. It provided an excellent opportunity for the Government of Turkey to gain insights into affordable financing options and incentives to retrofit and reconstruct housing to resilient standards while also increasing energy efficiency and improving housing quality. The experience and lessons learned in Japan are valuable to inform Turkey’s path towards developing financing mechanisms to support resilient housing reconstruction and achieving their urban transformation goals.