Does the Upgrading Plan Help to Improve Squatter Settlements? Case Study: Kagithane, Istanbul Terzi, F. and Bölen, F. 1 Does the Upgrading Plan Help to Improve Squatter Settlements? Case Study: Kagithane, Istanbul. Fatih Terzi Department of Urban and Regional Planning Istanbul Technical University, terzifati@itu.edu.tr Phone: +90-212-2931300-2811 Fax: +90-212-2514895 Fulin Bolen Department of Urban and Regional Planning Istanbul Technical University, bolen@itu.edu.tr Phone: +90-212-2931300-2389 Fax: +90-212-2514895 Keywords: Squatter Settlements; Upgrading; Sustainability; Affordability Abstract Throughout the twentieth century, different housing policies have been developed in different countries and they have changed in time in response to the changing housing problems. In industrialized countries after the 1980s, rental housing, rent allowances, owner occupation, mortgage tax exemptions, have been aimed to solve housing problems of low income people in these countries. In developing countries, squatter settlements have grown within the informal housing market. UN and World Bank gave some financial support to the slum upgrading and site and service projects, but these types of projects were not widespread. In Turkey, in 1984, each squatter was given permission to build 4 floors and many squatter areas rapidly transformed and turned into high density areas. More widespread method to upgrade squatter settlements was the Upgrading Plan which was brought into force after 1983 with the 775 act. This paper demonstrates the insufficiency of the regulations to upgrade squatter settlements to improve the building conditions and to provide solutions for affordable housing and sustainable residential areas. The data used in the assessment of this study were collected through research and case study. In this study, two types of analysis have been utilized. The first one is socio-economic analysis the data of which was obtained from the household survey having 10% sampling rate, and the results were evaluated in terms of housing demand and affordability. The second is a physical analysis of the natural environment, building conditions, density and tenure patterns. The results were used to evaluate the improvement of building conditions and the provision of sustainable residential areas after the transformation began in 1986. Firstly, the regulations to upgrade squatter settlements resulted in developments that are harmful for the natural environment due to legalization of the squatter settlements which have developed on lands in excess of 25% slope. This development and planning process also resulted in excessive utility costs and ineffective services and have not been able to provide sustainable development strategies. Secondly, the expectations of households for ownership, providing a house for their children and requesting for adding more storeys on their buildings resulted in high land use intensity. Besides, the upgrading plans have difficulty improving building conditions due to the lack of a financial support system. Lastly, provision of affordable housing has not been achieved, after the transformation of squatters with the upgrading plans. 1. Introduction Housing problem is a phenomenon that is experienced in different countries with different socio-economic development strategies. In developed countries, housing provision was considered as one of the main responsibilities of governments until 1980s when the role of the private sector in the housing market started to be emphasized much more than the public sector (Malpass, 1990; Balchin, 1995). After 1980’s, rental housing, rent allowances, subsidized housing, mortgage tax exemptions, and mortgage refinancing have become some of the instruments for solving housing problems in developed countries. These instruments, especially the mortgage system, have increased the