Quake lends urgency to Istanbul rebuild programme

Turkey hit by earthquake on Wednesday

Istanbul properties most at risk

City in need of renewal

Istanbul, Turkey’s economic hub, has received a timely reminder that it is at the centre of a high-risk earthquake zone, having been rattled by a tremor of magnitude 6.2 on Wednesday. The hope is that the quake will jolt the city authorities into action to speed up a slow-moving building renewal scheme. 

Damage from the quake, which had its epicentre off Istanbul’s coast, was thankfully limited. A single abandoned building in the centre of the city collapsed and about 150 people were injured mainly by jumping out of windows or off balconies in their haste to get outside.

Turkey has a long history of seismic disasters. Most recently twin quakes hit the south of the country in February 2023, killing more than 50,000, with the cost of reconstruction put at $34 billion. 

In Istanbul a major quake is a matter of when not if. Authorities have accelerated programmes to prepare the city of 16 million for disaster, including demolishing and rebuilding structures which fail minimum safety standards. 

More than 260,000 buildings built before 1980 do not meet required levels of resistance, according to the Istanbul Municipality. 

A study by the ministry of environment and urban planning says over 300,000 structures in the city – representing up to 1.5 million residential units – are in “urgent need of transformation”, the term used for those buildings in need of demolition or reconstruction. 

Under the scheme, the state offers direct funding of up to 700,000 lira ($18,000) to homeowners to remediate their houses. A similar amount is available through a low cost loan from state banks, with a 10-year repayment term. To fund the programme, the ministry of treasury and finance has budgeted $16 billion from 2024 to 2027. 

The rebuilding of much of the city is essential, according to real estate economist Dr Ahmet Büyükduman, as the potential losses from a major quake far outweigh the costs of reconstruction. 

“Imagine a big earthquake hitting Istanbul. Even if just 10 percent of the buildings collapsed and 90 percent did not, all the ecosystem, services or industrial producers would no longer be there, nothing would work,” Büyükduman told AGBI. 

“The impact on Turkey’s economy would be massive.”

However, the roll-out of the renewal scheme has been fraught with difficulties. In the case of a building with multiple residential units there must be agreement from all owners in the complex for the demolition and reconstruction process to take place. A single hold-out is enough to stall the project. 

Another issue highlighted by Büyükduman is that much of the reconstruction work being conducted is happening in more affluent districts of the city, where residents can afford to meet the owners’ input costs and can reap the rewards of improved property values.

Neighbourhoods which are most at risk – and most in need of urban renewal – are those with high concentrations of low income earners, and therefore those least able to meet the capital costs, he said. 

“Buildings are a class issue. Poorer areas have poorer quality buildings, and the renewal process does not start where it is most needed,” said Büyükduman. 

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