Document Produced under Technical Assistance

Project Number: 47039-001 December 2016

Mongolia: Urban Planning Improvement (Financed by the Fund for Poverty Reduction)

Part 1: Urban Planning Manual (Chapters 1–4)

Prepared by:

ALMEC Corporation and Oriental Consultants Global Japan

For: Municipality of Ulaanbaatar

This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents.

НЗДТГ ADB‐ТA 8467MON: Ulaanbaatar Urban Planning Improvement Project

Urban Planning Manual

CONSULTANT COMPANY: ALMEC CORPORATION ORIENTAL CONSULTANTS GLOBAL

ULAANBAATAR CITY, 2016 Ulaanbaatar Urban Planning Improvement Project (UBUPI) Project Office: Room #408, 1st City Own Building, Cultural Palace, Sukhbaatar District Tel: (+976) 9413-0365

PREFACE

We, UBUPI Project Team, are very pleased to compile this knowledge product for urban planners and/or government officials who devote themselves to administrative services related to urban planning and urban development implementation, in particular, for the Ulaanbaatar City. This is partial accomplishment to fulfill the requirement to be undertaken under the Ulaanbaatar Urban Planning Improvement Project, funded by the Japanese Fund for Poverty Reduction under the Asian Development Bank (ADB-TA 8467 MON).

This knowledge product is titled “Urban Planning Manual”, however, this is not a full textbook which covers all the professional knowledge and information useful for urban planning work. This manual is edited to provide basic, fundamental and indispensable knowledge/expertise for those who are obliged to work for urban planning administration in the government sector or those who are learning theories and practical experiences for urban planning at academic institutions.

This manual includes selected teaching materials utilized at a series of classes under the comprehensive training program to enhance human capacity development for urban planning. This also compiles training materials used for GIS skill-up training program and topics of discussions on how to build an urban database-sharing system at Ulaanbaatar City.

It is believed that this knowledge product is subject to being gradually improved by the users from time to time, depending upon planning issues crucial along the time, and this will function as a core of such knowledge accumulations.

We, UBUPI Project Team, express our sincere gratitude and appreciations for all those who extended their supports for success ofthis project. Our special appreciations should go to ex-Governor of Capital City, Mr. Bat-Uul and ex-Deputy Governor, Dr. Ochirbat who initiated this Project, and the Governor of Capital City, Mr. Batblod and the Deputy Governor, Mr. Bayarkhuu who continuously supported this Project to the end. Under their official orders/instructions, a total of 35 officials from Master Planning Agency, Urban Planning and Architecture Design Institute and others were benefited from the Project.

Lastly, we acknowledge all the ADB officials concerned, in particular, Mr. Arnaud Heckmann, the project manager, who had patiently supervisedthis Project, providing appropriate advice and instructions to the project team, and the Japanese Government for its financial support.

Ulaanbaatar, 2016

Katsuhide NAGAYAMA, Ph.D.Leader UBUPI Project Consultant Team

ADB TA-8467MON: Ulaanbaatar Urban Planning Improvement Project Urban Planning Manual

Table of Contents

Part 1: Urban Planning Manual

0. Introduction - How 0.1 Outline of the ADB Project to Use This Manual? 0.2 Objectives of the Urban Planning Manual 0.3 Objectives of the GIS Manual 1. Overall Urban 1.1 Emerging Urban Issues in Ulaanbaatar City Planning Process 1.2 Role of Urban Planning 1.3 Objectives and Structure of the Urban Planning Manual 1.4 Outline of Urban Planning Process

2. Social & Economic 2.3 Rationale Development 2.4 Key topics Framework (SEF) 2.5 Visioning 2.6 Urban Population Forecasting 2.7 Projections of Economic Activities 3 Land Use and Zoning 3.1 Rationale (LUZ) 3.2 Key topics 3.3 Urban Growth Management and Land Use Plan 3.4 Land Use Plan Formulation 3.5 Zoning system: Means to realize Landuse Plan 4 Housing Planning 4.1 Rationale and Development 4.2 Key topics (HPD) 4.3 Housing Issues and Policies 4.4 Housing Demand Forecast 4.5 Comprehensive Housing Development Measures 4.6 Social Housing and Financing

5 Urban 5.1 Rationale Transportation (UT) 5.2 Urban Transportation Planning Process 5.3 Transport Network Planning 5.4 Transport Modelling for Demand Forecast 5.5 Public Transport 5.6 Approach to Transit Oriented Development (TOD) 5.7 Approach to Strategic Transport-Landuse-Environmental Planning

6 Urban Design (UD) 6.1 Rationale 6.2 Key topics 6.3 Elements and Process of Urban Design 6.4 Health, Safety, and Welfare (HSW) in Urban Design 6.5 Preservation of Natural Resources 6.6 Preservation of Cultural/Historic Resources 6.7 Urban Design towards Sustainable Eco City

7 Environment and 7.1 Rationale Disaster 7.2 Key topics Management (EDM) 7.3 Air quality control, monitoring and management 7.4 Protecting Water Resources 7.5 Greening Action and value of ecosystem approach 7.6 Safeguard policy on environmental and social impacts 7.7 Disaster Management

8 Urban Engineering 8.1 Rationale (UE) 8.2 Key topics 8.3 Supply-demand gap analysis for urban utilities 8.4 Proper Operation and Management System 8.5 Tariff Structures, pricing and financial management

9 Urban Finance and 9.1 Rationale PPP 9.2 Key topics 9.3 Municipal financing issues for urban planning and development 9.4 PPP in Urban Infrastructure 9.5 Practical PPP model for Public Transportation Development 10 Urban Planning 10.1 Rationale Institutions and Legal 10.2 Key topics Framework (ILF) 10.3 Good Governance for Urban Administration 10.4 Overall Legal Structure for Urban Planning 10.5 Urban Planning Tools for Growth Management 10.6 Organizational Structure for Coordination from Planning to Implementation Part 2: GIS Application in Urban Planning Manual 1. Introduction of GIS 1.1 Rationale to Urban Planning 1.2 Methodology 1.3 Planning Formulation Process and GIS Application 1.4 Needs Assessment Survey and System Installation Plan 1.5 Set-up GIS Installation 2. Database 2.1 Rationale Development 2.2 Methodology 2.3 Common Standards for a GIS Database 2.4 Baseline Indicators to Identify Urban Planning Issues 2.5 Thematic Mapping 3. GIS Application in 3.1 Rationale Urban Planning 3.2 Methodology 3.3 Environmental Zoning and Definition of Urban Planning Area 3.4 Primary Analysis 3.5 Secondary Analysis 3.6 Preparation of Urban Planning Map 3.7 Applications in Master Plan Formulation 4. Data Dissemination 4.1 Rationale and Updating 4.2 Data Dissemination System 4.3 Development of a Shared GIS database

Introduction – How to Use This Manual? -

Introduction - How to Use This Manual? -

0.1 Outline of the ADB Project

The Municipality of Ulaanbaatar (MUB) requested (iii) full engagement of government and Asian Development Bank (ADB) to provide a nongovernment stakeholders, private sector, and technical assistance (TA) that enhances its in-house communities in the planning process through resources, capacity, and institutional arrangements participatory planning methods; and related to urban planning for better delivery of (iv) enhancement of environmental and safeguard master and local plans and efficient plan skills and mechanisms to lay the foundation for implementation. After the TA fact-finding mission on green development as well as strategic 28 November–12 December 2012, Mayor of environmental assessment with measurable Ulaanbaatar and Ministry of Economic Development indicators. signed a memorandum of understanding on the implementation of this Project titled “Ulaanbaatar This Comprehensive Training Program was prepared Urban Planning Improvement Project (UBUPI)”. especially for officials and professionals who are

working for urban planning services in the MUB and The objective of the project is to strengthen relevant agencies. I really hope all assigned trainees Ulaanbaatar’s development strategies and plans by make best use of this opportunity to be further building MUB’s capacity and mechanisms in urban capable and knowledgeable to uplift the quality of planning based on international standards. The urban planning services for citizens. It is also project involved provision of training materials, expected that after this project, a number of core working group, and workshops focused on trainees will become reliable trainers to educate disseminating methodologies for and experiences in and train their followers. Such a sustainable strategic planning processes. capacity development system should be established Improvement of master and local planning capacity in close collaboration with the ADB consultant team. will specifically emphasize: (i) strengthening the critical links between (a) the The project is mainly divided into 4 seasons urban infrastructure sectors—e.g., water, including: transport, and energy—in integrated urban 1) Season 1: Training sessions from September to planning and development processes; and (b) November 2014 economic development and physical and 2) Season 2: Workshops and Training Sessions from infrastructure planning, urban laws and policies, February to July 2014 poverty reduction, and environmental improvement; 3) Season 3: Workshops and Pilot Planning Program from September to December 2015 (ii) financing requirements of investment plans, revenue generation from different urban 4) Season 4: Development of City Partnership infrastructure services, and implications for local Platform from April to September 2016 government debt, budget, and other key financing indicators;

Intro-1 Introduction – How to Use This Manual? -

0.2 Objectives of the Urban Planning Manual

This manual is prepared based on the contents and functionally related with are normally involved in results of overall training and other activities of daily planning administration. UBUPI. Those who are officially working for urban planning This manual aims to provide basic knowledges and are requested to have basic issues at least and as practices related to urban planning, development much practical knowledge as possible, for all the and management activities especially for experts sectors. Through this manual, you will be able to who work for urban planning and management touch all the key issues at basic level and/or at an sectors, including central and local governments, advanced level, if they want further pursue. private sectors, university, etc. International experiences are introduced to share Though this manual doesn’t explain technical urban experiences from other countries and cities. While planning process in detail, it covers a wide variety of institutional basis is differed among areas, users will professional discussions for policy-making of future be able to grasp lessons learned for effective city development. Eight (8) sectors which are application to your city.

8. Planning Administration

Figure 0.2.1 Eight (8) Professional Sectors Related to Urban Planning

Intro-2 Introduction – How to Use This Manual? -

Table 0.2.1 Key Topics for Urban Planning and Management Sector Key Topics 1. Social & 1.1 Socioeconomic status analysis & quantification theory Economic 1.2 Socioeconomic dynamic forecasting and simulation of urbanization Development Framework (SEF) 1.3 Planning framework for social and economic development 1.4 Demand-supply gap analysis for social services, utilities and urban infrastructures under assumed targets 1.5 Development visioning (use of scenario modelling) 1.6 Urban polices and strategies towards development targets and/or visions 1.7 Urban planning and alleviation of urban poverty 2. Land and 2.1 Urban growth management with land use control Housing (LH) 2.2 Zoning and monitoring of land use and environmental management 2.3 Zoning and monitoring for building construction control 2.4 Zoning for strategic urban projects (industrial zone, logistic center, historical conservation, urban park, etc.) 2.5 Comprehensive planning of new satellite towns 2.6 Overall housing policies for demand and supply management by income group 2.7 Housing status analysis and future demand forecast 2.8 Housing for low income households and social housing policy (roles and functions of “Housing Corporation” to be newly organized) 2.9 Housing banking and financing policies and measures 2.10 Underground usage for urban utilities, infrastructures and commercial activities 3. Urban 3.1 Inter-modality and multi-modality for urban transportation network Transportation 3.2 Public transportation network planning and measures (BRT, UB-Metro) (UT) 3.3 Traffic management and Parking control 3.4 Transportation modelling for traffic simulation and demand forecasting (Basic) 3.5 Transportation modelling for traffic simulation and demand forecasting (Advanced) 3.6 Transport Demand Management (TDM) and Intelligent Transport System (ITS) 3.7 Transportation-oriented Development (TOD) 3.8 Introduction of New Urban Transit System 3.9 Practical PPP model for public transportation development 4. Urban Design (UD) 4.1 Urban design policies to create a city, Ulaanbaatar: Basic concepts and visions 4.2 Spatial design concept for open space and landscaping 4.3 Eco-city policies and urban design 4.4 Design management and control for buildings, streets, parks, advertising boards, public facilities, etc. 4.5 Universal design standard for disabled people 4.6 Culture and historical assets and Conservation Policy 4.7 Tourism promotion and Urban Environment 5. Environment 5.1 Greening action plan to be coordinated with the Master Plan and Disaster 5.2 Protecting water resources and soil: interactions between urban projects and Management river protections management (EDM) 5.3 Value of ecosystem approach in urban planning

Intro-3 Introduction – How to Use This Manual? -

5.4 Risk management : environmental and social impacts 5.5 Air quality control, monitoring and management in urban planning 5.6 Vulnerability maps and risks prevention mapping 6. Urban 6.1 Supply-demand gap analysis for urban utilities in medium- and long-term Engineering (UE) 6.2 Spatial planning for infrastructure planning and investments 6.3 Appropriate tariff structures, pricing and financial management 6.4 Usage of GIS techniques for facility/assets management and CRM (Customer Relationship Management) 6.5 Appropriate systems for services and infrastructure extension in Ger areas 6.6 PPP in urban infrastructure: lessons for Ulaanbaatar 7. Legal, Institutional 7.1 Review of the overall legal framework to regulate urban planning: current status and Organizational and needs for legislative strengthening (LIO) 7.2 Ulaanbaatar City Ordinances related to urban planning and projects implementation for Ger areas housing, roads and streets, sanitary and utilities, transportation, greening, solid waste management, etc. 7.3 Participation methods and urban redevelopment (experiences of the ADB projects) 7.4 Land value assessment mechanisms and database building 7.5 Taxation and municipal financing issues for urban planning and development 7.6 Review of current organizational issues in terms of: 1) urban planning; 2) project implementation; 3) private sector’s development management; and 4) monitoring 8. Planning 8.1 Ethical issues for planners and planning administration Administration 8.2 Transparency and accountability of procurement of goods and services (PA) 8.3 Career promotion system for planning administrative officials and specialists 8.4 Prioritization and budgeting of projects/program to implement the UB Master Plan 8.5 Monitoring and evaluation of detailed plan and private-driven urban projects 8.6 Requirements of ODA projects and external financial aids

Intro-4 Introduction – How to Use This Manual? -

0.3 Objectives of the GIS Manual

The City Master Plan, indicating future directions of actual development, should guide Detail Plans Table 0.3.1 GIS Application for Urban Planning and/or Action Plans. The Shared Urban Database and Management needs to be workable for this purpose. While the Purpose Use implementation of Detail Plans or Action Plans should be periodically and occasionally monitored. Administ Develop topographic maps through public This planning management system is of critical part rative surveys, manage urban infrastructures such as roads, water supply, drainage, etc. of urban planning administration. Urban Manage and provide urban planning Planning information or assistance to decision making as a support tool.

Monitori Monitor and improve safety of store branches, ng and construction and buildings, service zones, manage office , and underground facilities; Figure 0.3.1 Shared GIS-based Urban Database ment monitoring of risks, environment, study of for Urban Planning Management towns/villages, forests and seas, and radio waves access; improve efficiency of data update; reduce costs to save maps GIS is one of the most powerful tools for decision making and planning. Its capability to handle large Policy Get information about accidents and natural develop disasters, develop customer relations policy volumes of spatial and attribute information has ment and sales strategy after determining threats made it an essential tool in urban planning, as well as and difficulties through study of regional in other disciplines such as environmental or natural marketing or market scale and percentage of resources management, tax mapping, and facilities/ certain area, select the best location, design utilities management. the most efficient transportation routes, and study driving safety, performance and comfort of vehicles etc. The GIS manual aims to strengthen the capacity for Data Determine current locations; find location of data processing using GIS in urban planning sharing branch closest to a customer; deliver management. This chapter describes GIS and its information on building and construction, application in urban planning; the plan formulation traffic, and leisure and recreation centers. process including GIS application, needs assessment survey, and GIS installation plan; and setting up of a Private Analyze trading and marketing areas for new costumers; for car navigation systems based GIS. on global positioning system (GPS), etc.

To this end, this manual contributes to improve capacities of city government officers including GIS experts to expand the basic knowledge level of GIS and integration of database over urban planning officials.

Intro-5 1. Overall Urban Planning Process

1. Overall Urban Planning Process

1.1 Emerging Urban Issues in Ulaanbaatar City

Ulaanbaatar City, the capital of , has  Infrastructure gap expanded rapidly as its population reached 1 million  Hazard risk in 2010 and increased even more in a decade. At  Worsening living environment present, the population is about 1.2 million with half  Pollutions of the population of Mongolia living in the capital city.  Inappropriate urban management

The urban characteristics of Ulaanbaatar are unique Particularly in UB City, the “ger area” is a unique and different from other developing cities in feature of the city where it expands to suburban with regard to cold climate, history of nomadic life, areas not suitable for living because of hazard risks socialistic-based urban planning system, etc. After (land slide, flood, etc.) and beyond the coverage of democratization and reform to the capitalist urban utilities (no connection of water, drainage, economy in 90’s and land privatization to citizens, UB sewerage, heating, solid waste collection, etc.). City has faced various urban issues similar to other During winter time, air pollution is spread in the developing cities: whole city from the smokes generated by the low-quality heating system of those in the ger area.  Uncontrolled expansion of urban areas

 Traffic congestion  Unstable urban economy and market

1.2 Role of Urban Planning

For the citizens, the city is the place to live, work, The city grew through the activities and efforts of enjoy and do many other activities. Urbanization is citizens, industries, and governments. The urban plan the process to formulate a specific place where should guide the following: various people live together and communicate by i) To define the area under the management of sharing common properties such as road, urban plan infrastructure, urban facilities, and public spaces. ii) To identify current conditions of the city and Without proper management based on common urban issues to tackle rules and guidance, it is difficult to ensure iii) To share the vision and development framework sustainable development of the city. of the city among stakeholders

iv) To consolidate urban growth scenario and urban The rationale of urban planning is to (a) ensure a structure healthy and safe environment for all citizens, (b) v) To formulate development orientation and plans manage uncontrolled urban expansion and sprawl to protect environment, and (c) improve amenities and of various sectors in integrated manner comfortability of urban space. vi) To formulate urban development program for implementation For this, the role of the urban plan is to define the common guidelines and rules to manage and control vii) To monitor and assess urban plan to manage freedom of individual properties for public profits in urban growth of the city to envision the shared the limited land and space of the city. vision and plans

1-1 1. Overall Urban Planning Process

Figure 1.2.1 Urban Issues in Ulaanbaatar

Socio-economic gaps between central area and Ger area has widened.

Air pollution in winter has worsened.

Transport issues in central area and ger area are completely different.

1-2 1. Overall Urban Planning Process

1.3 Objectives and Structure of the Urban Planning Manual

This manual aims to share common understanding of urban planning and provide basic theories, knowledge, and methods on urban planning for local governments being the main target, as well as private sectors and citizens who are involved and interested in urban planning and development. Urban planning work needs to cover a wide variety of professional discussions for policy-making of future city development. Eight (8) sectors are covered in this manual with related functions that are normally involved in daily planning and administration. Based on general urban planning processes, specific issues and topics that UB City needs to tackle are elaborated and focused in each sector of this manual. Furthermore, a GIS manual is independently developed to strengthen the data processing capacity with GIS to apply in urban planning and management processes.

Contents of Urban Planning Manual Part I: Urban Planning Manual 1. Overall Urban Issues and Planning Process 2. Social & Economic Development Framework (SEF) 3. Land Use and Zoning (LUZ) 4. Housing Planning and Development (HPD) 5. Urban Transportation (UT) 6. Urban Design (UD) 7. Environment and Disaster Management (EDM) 8. Urban Engineering (UE)

9. Urban Finance and PPP (UF) Figure 1.3.1 Overall Flowchart of Urban Planning 10. Urban Planning Institutions and Legal Framework (ILF) Part II: GIS Application Manual to Urban Planning 1. Introduction of GIS to Urban Planning 2. Database Development 3. Application of GIS in Urban Planning Process 4. Data Dissemination and Update System

1-3 1. Overall Urban Planning Process

1.4 Outline of Urban Planning Process

1. Define of Urban Planning Area 2. Situation Analysis Urban Planning Area is designated to cover lands/ To understand the condition of the city and identify facilities required for urban activities at present and urban issues, a situation analysis is required. In this future and manage the urban planning area to process, four key tasks are to be conducted: develop, manage, and protect in an integrated i) Data collection: Review of existing data that manner. includes policies and plans, statistical data, maps, To analyze land availability and environmental etc. If updated and reliable data is limited, conformity, Environmental Zoning is conducted by supplemental surveys would be conducted such application of GIS to categorize protection areas. as traffic, household interview, and environmental surveys among others. ii) Database building: Based on collected data, urban database is established including shared

GIS database system.  Refer to “GIS Manual.”

iii) Situation analysis: Main scope for the analysis

include position of the city in the region, demography, social conditions, economic development, environment, spatial structure and land use, transportation, technical infrastructure, social infrastructure, living conditions, housing,

park and green space, landscape, and municipal finance and administration, among others. Figure 1.4.1 Layers of Environmental Zoning GIS-based thematic maps, urban indicators, and SWOT analysis are applied to the framework of Urban Planning Area is elaborated from remaining situation analysis. area with justification of the following criteria: iv) Issue identification: There are various urban issues in developing cities, such as uncontrolled i) Land use condition expansion of urban areas, traffic congestion, ii) Natural condition and land feature vulnerability to hazards and risks, degrading iii) Coverage of urban services and facilities living environment, threat to economic iv) Coverage of transport services and network competitiveness, widening infrastructure gap, v) Social and economic integration and pollution, inadequate urban management, etc. unification Issues must be identified with regard to (i) competitiveness and sustainability of the city vi) Administrative units and management economy, (ii) effective urban management and  Refer to chapters of “SEF,” “Land and Housing (LH),” growth management, (iii) safe and attractive and “EDM.” living environment, (iv) conservation and restoration of natural resources, and (v) cultural and historical values.  Refer to chapters of “SEF,” “LH,” “EDM.”

3. Vision and Development Framework Formulation Common vision of the city provides broad orientations for overall city development, which is

1-4 1. Overall Urban Planning Process useful for city management and, at the same time, A vision needs to be elaborated into strategies to can provide a more solid basis in formulating the ensure sustainable development in terms of Master Plan in coordinated and integrated manner economic, social, environmental, physical, and between spatial development and socio-economic institutional aspects. development. Development strategies are translated into a basic Visioning is the process where a city develops a development framework, which provides future vision and translates it to action plans. Public quantitative indicators on which plans are participatory promotes linkages between sectors and formulated. traditional culture.  Refer to chapters of “SEF,” “LH,” and “EDM.”

Table 1.4.1 Development Framework and Indicators (Example) Objectives Description Development Indicators Economic sustainability  Accessibility to main gateways and market GRDP, labor, labor To establish a competitive economic  Competitive industries to support the increasing productivity, vehicle development base and ensure its population ownership growth.  Provision of support services in the region  High productivity  Trained labor sources Social sustainability  Inclusive and equitable society Population, poverty rate, To establish a livable city for both  Cohesiveness of community rate, enrolment rate, residents and non-residents without  Safety and hospitality coverage of healthcare, poverty and disparity.  Attractive living environment gender balance  Unique features (culture, history, environment, etc.) Environmental sustainability  Preservation of natural ecosystem and landscape Coverage of green and water, To establish a pollution-free,  Reduction of pollution hotspots area for preservation, suitable disaster-resistant, and  Mitigation and adaptation towards natural disasters land for development, flood environmentally rich urban system.  Response to climate change affected area  People’s awareness to environmental issues Physical sustainability  Access to basic urban utilities and transport Coverage of urban service To provide the city with efficient  Affordability of basic urban services for all (electricity, water supply, urban utilities and transport at  Mechanisms to promote economic use of resources drainage, sewerage, solid affordable levels in harmony with  Conformity with environment protection and waste collection, internet) landuse and the environment as well preservation measures Road density, pavement rate as in integration with regional  Shared responsibilities for environmental protection structure. and preservation  Sustainable implementation mechanism Institutional sustainability  Management capacity of the government Investment per capita, city To establish competent organization  Competitive investment environment budget, FDI and urban management system to  Stable funding sources and balanced expenditures promote sustainable urban including availability of own funding and development. from higher level budget and overall  competitiveness for development  Transparent and accountable institutional framework  Inclusive participation of stakeholders in the development process

1-5 1. Overall Urban Planning Process

4. Urban Growth Scenario and Urban Structure  Efficient Supply of Social Infrastructure and Urban growth scenarios are formulated to justify Public Services: Energy-saving/efficient and appropriate growth management in the next 20–30 resource recycling-oriented urban systems are years with the use of existing trends and other pursued. development scenarios. For example, alternative  Adequate Institutional Framework for scenarios of future spatial development patterns are: Private Sector Investment: Properly managed (i) trend (urban sprawl), (ii) compact with mono-core and active private sector participation in center, and (iii) compact with multi-centers developing a compact city is essential. development. Other alternative scenarios based on population growth are: (i) base case (trend), (ii) Growth boundary is designed to specify the area existing plan, and (iii) proposed scenario where urban development will be encouraged and priority is given for land use management, transport and infrastructure development in line with a proposed socio-economic framework in the city. The growth boundary should specify the (i) Urbanization Promotion Area where urban development should be promoted, and (ii) Urbanization Control Area where urban Figure 1.4.2 Alternative Scenario of Spatial development should be restricted. Development in Development areas outside the growth boundary is restricted in order to prevent urban sprawl and for natural Based on alternative urban growth scenarios, urban environment conservation. structure concepts are also different. Spatial structure is defined with consideration on the following issues: i) Spatial integration of city and surrounding region including environmental conformity, transport connectivity, and functional role-sharing ii) Environmental preservation based on environmental zoning iii) Hierarchical transport network development orientation iv) Functional zoning of urban areas with CBD, Figure 1.4.3 Urbanization Promotion Area and suburban centers, and environmental zones Urbanization Control Area

Proposed key planning elements for a Compact City  Refer to chapters of “SEF” and “LH.” are as follows:  Quality Mass Transit Corridors: An efficient public transportation system that comprises of mass transit as backbone and effective feeder systems is established.  Integrated Urban and/or Land-use Development and Revitalization of Inner City: High-dense habitation and intensive land use for commercial and business activities need to be promoted.

1-6 1. Overall Urban Planning Process

5. Development Orientation and Plan  In “Chapter 4 Housing Planning and Based on selected urban growth scenario and urban Development,” the following topics were discussed: structure, sector plans are formulated in line with the 1) Housing policy and legal framework development orientation of the city. 2) Housing status analysis and demand forecast Land Use and Zoning 3) Housing planning and development The land use plan aims to realize urban structure 4) Social housing and financing concept and facilitate actual land use and control inappropriate urban sprawl. Based on the urban structure concept, land use demand is analyzed by Urban Transportation Plan comparison of present and future socioeconomic Transport network is the backbone of the city to and land use demands. facilitate effective land use and environmental In the master plan, the land use plan indicates the protection. Transport plan is an integral part of spatial plan together with land use, technical categorization of general land use types (residential, infrastructure, and environmental plans. commercial, industrial, environmental, infrastructure, etc.) that conforms to environmental zoning and The urban transportation plan includes the following transport network and fulfills the land use demand in order: (a) regional transport connectivity, (b) urban based on socio-economic framework. transport network structure, (c) road development For actual land use and development control based plan, (d) public transport development plan, and (e) traffic management. on land use plan, an institutional arrangement is required to apply for a zoning system, which a legal  In “Chapter 5 Urban Transport,” the following framework for has been discussed in Mongolia. topics were discussed:  In “Chapter 3 Land Use and Zoning,” the following 1) Strategic urban and transport planning and topics are discussed: development 1) Urban growth management with land use 2) Transportation modelling for traffic control simulation and demand forecasting 2) Land use planning 3) Public transport network system 3) Zoning for building construction control 4) Approach to Transit Oriented Development (TOD)

Housing Plan Housing provision and development is one of the Urban Design most critical issues in developing cities to ensure Urban design is becoming important to render the safety and security of citizens. Housing policy is vision, philosophy, and concepts expressed in urban important to be able to provide appropriate housing plan into more concrete and tangible image and to all citizens with urban infrastructure, facilities, and concepts to bridge urban planning and actual transportation access. development. However, as it is not practical nor It starts on demand and supply gap analysis with possible to conduct urban design for the entire city, necessary areas are identified. consideration to income levels of citizens and financial capacity of governments and private sectors.  In “Chapter 6 Urban Design”, following topics are The rehabilitation and renewal of existing built-up discussed: area (old apartment reconstruction, redevelopment 1) Elements and process of urban design of degraded area, etc.) is also required besides 2) Health, safety, and welfare in urban design provision of new housing in new areas (new town 3) Natural resources preservation development). Institutional arrangement for housing provision, such as housing corporation for provision 4) Cultural/Historic resources preservation of low- and mid-income households, is therefore 5) Urban design towards sustainable eco-city indispensable.

1-7 1. Overall Urban Planning Process

Environmental Management Plan 6. Urban Development Program for Environmental issues in the urban plan vary including Implementation measures for pollution control (air pollution, noise, The vision must be realized and development plan soil pollution, etc.), green and open space, disaster must be implemented. The urban development management (flood, land slide, etc.), and program for implementation is indispensable environment-friendly systems (energy saving, new including legal, organizational and financial environmental technology, etc.). These arrangement. In compliance with the master plan, to environmental issues contradict with and are difficult manage appropriate urban development and to incorporate in urban development without preservation, the following elements/ tools are appropriate environment management. designated with legal binding if possible.  In “Chapter 7 Environment Management Plan,” Zoning is meant to prevent any conflict among the following topics were discussed: different land uses, control volume of development, 1) Air quality control, monitoring, and and provide a legal framework for regulating management in urban planning development projects. 2) Water resource protection Key Urban Facility is designed to ensure main infrastructure (trunk roads, public transport network 3) Greening action and value of ecosystem and facilities, main urban engineering facilities and approach pipelines, main social facilities, etc.). By indicating the 4) Safeguard policy on environmental and exact location and scale of facilities, development social impacts activities can be restricted on designated land that 5) Disaster management will be acquired or protected from the aspects of public benefits so as to ensure enough land resource Urban Engineering Plan for basic infrastructure construction and city level public works. Urban engineering plan covers water supply, waste water, solid waste, electricity, heating, and Urban Development Project is a measure to telecommunication subsectors among others. The comprehensively implement an area-wide project. It common issues of urban engineering are the includes new area development (new town, industrial physical improvement to expand capacity, area, etc.) as well as redevelopment of built-up area. management improvement including tariff structures, The advantage of urban development project is the and technical system (central supply system, cluster/ comprehensive integration of housing provision, independent system, etc.). infrastructure development, urban facility development (commercial, educational, social, etc.),  In “Chapter 8 Urban Engineering Plan,” the and environmental improvement with participatory following topics were discussed: process. 1) Supply-demand gap analysis for urban Institutional arrangements are necessary, so as to utilities implement proposed plans and projects. 2) Proper operation and management system Legal basis: The three main urban-related laws are, 3) Tariff structures, pricing, and financial in order: the Urban Development Law (UDL), which is management due for amendment, followed by Urban Redevelopment Law (URL), which undergoes further drafting, and New Town Development Law, which will be drafted in the near future. These laws must comply with the principles of the Mongolian Constitution and Civil Code. The UDL shall be the overarching document that covers the basic policies and legal framework, responsibilities, and duties of the government sector on urban planning, land use, and urban development. URL that is meant to be the

1-8 1. Overall Urban Planning Process administrative document on urban redevelopment 8. GIS Application to Urban Planning projects should be enacted under this umbrella GIS is one of the powerful tools for decision-making policy. and planning. The capability of GIS to handle large These urban-related laws are interrelated and volumes of spatial and attribute information makes it cross-referenced with other relevant laws such as for an essential tool for urban and regional planning as land, housing, infrastructure, and environment. well as for other disciplines such as environmental or  In “Chapter 9 Legal, Institutional, and natural resources management, tax mapping, and Organizational,” the following topics were facilities/utilities management. discussed: When extended further to various aspects in the 1) Overall legal framework to regulate urban urban planning process, GIS will be of great help to planning achieve a more objective understanding of planning issues. Planning work would be implemented more 2) Organizational issues rationally and scientifically and would help ensure 3) Participation planning and implementation more effective results. mechanism  Refer to “Part II: GIS Application Manual to Urban 4) Land value assessment mechanisms Planning.” 5) Taxation and municipal financing issues

7. Periodical Monitoring The main purpose of this step is to provide a systematic feedback mechanism throughout the implementation of a plan through programs and projects. When properly established, the supervised results will directly contribute to the evaluation of programs and projects at different levels—inputs, activities, outputs, products, and influence. Implementation may possibly be modified per the supervised results and evaluation. Doing supervision well also provides valuable data inputs, especially if the data is designed to support existing databases. To implement policies, plans, and projects, the “PDCA Cycle” is appropriate to clarify necessary actions for public participation. From the start of planning stage (“plan”), the City Government needs to demarcate information and discuss with citizens the contents of plans and projects. During implementation stage (“do”), the agreed plans and projects should be implemented, not only by City Government, but also by local communities and private sectors. After plan and project implementation, the results and impacts should be analyzed and assessed (“check”) with the listening voices of citizens. Thereafter, the City Government needs to take actions to improve and amend policies, plans and projects (“action”).

1-9 2. Social and Economic Development Framework

2. Social and Economic Development Framework

2.1 Rationale

A social and economic development framework In arguments on building a social and economic needs to be discussed in the beginning of the urban framework, important is pursuance of the terminol- planning work to get insights into the reality of the ogies of “optimal”, “rational” and “efficient” in the current situation and prospects of the future situa- quantitative indicators. tion in the city, because the planning must be the bridge between present and future. What will the Box 2.1: Mongolian Law of Urban Planning future conditions change in terms of population, Article 1: Purpose of the Law employments, economic products and quality of people’s living, given a case of “Do-nothing”? This is 1.1 The purpose of this Law, hereunder, is to regu- late relations between the state, economic entities, and the first question. After knowing such a basic case, citizens in rational and purposefully planned utilization of development targets shall be discussed towards the land and territories of towns and villages with the aim of future, based on another scenario with available de- establishing optimal structure for regional development velopment policies and strategies. A series of that is capable to lead relatively self-sustained, inde- “quantitative analyses” with some statistical meth- pendent development and settlement of the population, odologies shall be conducted to respond to such and principles to be pursued in planning of towns, villag- significant questions in the urban planning process. es, and their infrastructure in the framework of urban development of Mongolia. 1) Objectives of Urban Planning Article 3: Definition of Terminologies The quantitative indicators presented as a so- 3.1.2 “Urban planning” shall mean planning spe- cio-economic framework are utilized to identify the cialized activities with certain phases aimed for creating magnitudes spatial and/or physical development to optimal social, economic and infrastructural services be accorded with the objectives of urban planning, through implementing land utilization, urban construc- tion and urban development activities with the purpose of which are normally addressed in the Law of Urban future development of particular towns, villages. Planning. The Mongolian Law of Urban Planning stipulates the purpose in Articles 1 and defines the 2) Three Main Factors of Framework meaning of “Urban Planning” in Article 3, as shown in Three factors are scrutinized for the socioeconomic Box 2.1. In summary, the Law addresses three pur- framework building. The three are all relevant to the poses of the Law with three optimal and rational objectives of the urban planning as discussed above. elements of 1) relations with citizens, 2) land and 3) settlements, as follows:  Population/Households: Basic factor to deter- mine sizes of urban space/land use and magni-  Regulate relations among three groups: state, tude of urban activities, and scales of need of economic entities, and citizens social services and infrastructures.  Promote rational land use  Employments/Jobs: Vital element to determine  Recommend optimal structure for self-sustained the social and economic stability. settlements  Economic Products: Critical element to determine Then, Urban Planning is defined as guidelines to urban affluence and growth potentials and create three optimal elements of 1) public services, 2) Economic land use and 3) future development as follows: Products mobility and people’s quality of living. Demands  Create optimal social, economic, and infrastruc- Employ- ment for industrial and com- ture services Population mercial land use and utili-  Promote efficient land utilization ty services are implied  Prepare for future development with these indicators.

2-1 2. Social and Economic Development Framework

2.2 Key Topics

In general, planning work is conducted with a five (5) its economic feasibility. This is based on a simple step process, as shown in Figure 2.2.1. Planning work logic that the investment on a project must be eco- in each process is always related to or supported by nomically feasible in the society and the project with some quantitative analyses with statistical meth- the highest feasibility should be given the highest odologies and/or economics as planning tools. priority. As this is a qualitative evaluation process without any political intention and intervention. Urban planning starts with “visioning” in the future. What city do we have to build for the future genera- Based on the result in the preceding process, a mat- tion? An ultimate feature of the city will be imagined ter of concern in planning discussions will focus on and shared with all stakeholders. In this process, the how the priority project shall put into action, or “ac- future projection in terms for socioeconomic tion planning.” Two aspects need to be explored in framework may be a significant input for the vision- this process, that is, one is financing or budgeting, ing. The vision shall be translated into some numer- and another is an executing mechanism, taking into ical targets to be achieved. account capacity of the implementing body/entity. Given rational and persuasive ideas on these two The status analysis is usually conducted in parallel issues, the plan will be implemented. Otherwise, the with the visioning in use of a SWOT analysis and plan would stay on bookshelves. several statistical methodologies. This is a bridging work to connect the present and the future, because it will be identified in this process how much efforts will be necessary for us to reach the vision in future Planning Process Planning Tool from now on. Visioning Future Projection This argument should be continuously facilitated to seek for appropriate development activities to be undertaken by stakeholder groups. What and how Status SWOT Analysis do we have to set forth a “roadmap” to reach the Analysis Statistical Methodologies goal? This is a question in this process which is called Development Framework “programing”, the most important part in the plan- Programing ning work. For this discussion, detailed quantitative Supply-Demand Analysis and qualitative analyses in terms of gap between the Cost Estimate demand and supply should be presented to identify Prioritizing Cost/Benefit Analysis what projects needs to be prepared for the roadmap. The forth step is to objectively and rationally evalu- Action Financing ate the priorities of all projects listed in preceding Planning Executing Mechanism process. This is called “prioritizing” under a ques- tion of what should be executed first. Several criteria Figure 2.2.1 Urban Planning Process and Planning Tool are conceivable to support such a decision, i.e., ur- gency, critical necessity, implementability, readiness, social acceptance, so on. The most rational tool, however, is the cost/benefit analysis which indicates

2-2 2. Social and Economic Development Framework

2.3 Visioning

1) Visioning on Future velopment” (24%) and “environmental protection” (17%) and “security and safety” (10%). In this survey As mentioned in the preceding section, planning in 2009, the transportation issue was not recognized may start with visioning, and the isionng process as a very serious urban issue, compared to the other should be managed in a proper manner, otherwise, issues. If the same survey is conducted at present, the plan would lose principles and belief to be some different results will be induced due to more shared with citizens. congested urbanization process. On discussions of the future, the current reality is often highlighted. In UB City, seriousness of ambient air pollution in winter is one of the most concerned Public information issues. The reality is mirrored by two photos below. Telecommunication Traffic management

City administration and services

Sewerage/Drainage

Land and housing

Electricity

Road infrastructure and facilities

Public transport

Garbage collection

Recreation and sports facilities

Water Supply

Neighbourhood security

Education

Health/welfare services

Urban AirUrban Quality air quality 0 500 1,000 1,500 2,000 2,500 3,000

No. of answers

Poverty Alleviation

5% 5% Economic Development 8% Environmental Beautiful Summer around the Gandan Temple 34% Protection Beautiful Summer around the Gandan Temple 10% Security and Safety

Land and Housing 17% 21% Transportation

Urban services

Based on answers from 4,500 households (2% of the total)

Source: JICA UBMPS, 2009 Figure 2.3.1 Results of Questionnaire Survey in UB City

AwfulAwfull Winter around with Air the Pollution Gandan Temple around the Gandan Temple Based on people’s perception of the A questionnaire survey is often conducted in the current situation, a planning process to identify the people’s opinions practical exercise of and voices for current problems. Figure 2.3.1 shows “visioning” shall be the results of a typical questionnaire survey con- conducted, promot- ducted in UB city in 2009. The upper figure is the ing stakeholders’ ranking of current serious problems that citizens had participation. Now- faced. The ambient air pollution was pointed at the adays, such a par- HowHow to Improve improve the Living Environment?the living environment in highest rank. On the other hand, the lower figure Ger ticipatory approach is very popular over the world to shows the result of important urban issues to be assure citizens’ ownership of the planning itself. It tackled by the government. 34% of people pointed has been recognized that the plan is likely to be un- out “poverty alleviation”, followed by “economic de-

2-3 2. Social and Economic Development Framework

eventfully implemented when the plan’s ownership is The Q4 is to identify the priority activities to make a assured with citizens’ participation steady first step towards the visioned goal. Priority projects and/or actions are compiled for priority 2) Visioning Process programs which should be starategically executed in Figure 2.3.2 shows a visioning process and topics of the short- or medium-tem, including a possible discussions in each step. Basically, this process is budgeting scheme. similar to the planning process mentioned in the 3) Strategic Supply to Meet Demand preceding section 2.4. A visioning session is facili- tated with raising four (4) questions to participants With regard to Q2, it is important in the urban plan- as follows: ning process how the Government fulfills a gap be- tween people’s needs (demand) and public services,  Q1: What shall we be in the future? including infrastructures (supply). As shown in Fig-  Q2: Where are we staying? ure 2.3.3, the demand curve, in general, is continu-  Q3: What paths will be available to reach the ously incremental as time passes. However, the vison? supply curve cannot be depicted in continuity, but is  Q4: What shall we start with? stepwise-shaped to meet the demand at target time. There are two alternative paths to enhance the sup- ply side capacity, or Path 1 or Path 2 in the figure. The Path-1 is outside enveloped with the demand curve, while Path-2, inside enveloped. Given Path-1, no congestions take place until the time just meeting the demand, as long as an over-supply condition continues. On the other hand, Path-2 allows congestions or a shortfall of the ser- vice until the new supply facility is provided to meet Figure 2.3.2 Visioning Process of Discussions the demand. The Q1 is to delienate future images of the city and It is obvious that Path-2 is surely recommendable citezons’ living conditions and evironment for the from the urban planning viewpoint, however, from next generaion in the long-term. In particular, the the economic feasibility point of view, Path-2 will be discussion is uselaly facilitated, asking a question of definitely recommendable because the supply ca- what city shall be built for your children? pacity is fully utilized during the project life. The Q2 is to know the current status of the city Capacity based on analytical tools in statsitics or ecnomics. Many argments take place viewing their daily lives. Supply Path １ Complains agaist the gvernment activities are often generated in this session, but all those are valuable Supply Path ２ to identify the present situation and what issues to be solved in the planning. Demand Curve The Q3 is to find alternative roadmaps to reach the vision, say Path-A, Path-B or Path-C in general. Each path has a different pattern of resource allocation. Time T1 T2 For insitance, significant resources for development shall be allocated in the early stage, when Path-A is Figure 2.3.3 Two Alternative Paths for Supply taken. On the other hand, Path-C needs more Which supply path should be adopted for provision intensive resoruces in the late stage rather than in of public services? The economic efficiency of the the early stage. A strep-b-step approach is taken public investment should also be taken into account for Path-B. The most appropriate path should be in the urban planning process. discussed in consideration of the city’s budgeting and human capacities and availability.

2-4 2. Social and Economic Development Framework

2.4 Urban Population Forecasting

Technical aspects for forecasting future socioeco- certain period. Figure 2.4.3 shows historical changes nomic activities are discussed in this section 2.4 and of general fertility rates in Mongolia. The fertility to Section 2.5. curves are getting gentle gradually and the peaks are shifting lower towards higher aged, as time goes 1) Evolution of Urban Population through. This means the fertility rates are definitely Looking into historical changes in UB from 1926, decreasing over the nation. rapid urbanization has been taking place in UB city since 2000, as shown in Figure 2.4.1. This momentum will still continue and 50% of the population will concentrate into UB City in near future.

Figure 2.4.3 Changes in General Fertility Rates, Mongolia As for the mortality rates, as shown in Figure 2.4.4, the curves are shifting downward, meaning the gen- eral mortality rates are decreasing, thereby leading to the aged society steadily.

Figure 2.4.1 Overlook of UB City Population The urban population will change with two reasons; one is “natural increase”, and another is “social in- crease” or urban migration (see Figure 2.4.2). The urban population is composite of these two types of population changes.

Emigration

Future Present Social Increase Population Population Figure 2.4.4 Changes in Mortality Rates , Mongolia Natural Increase 4) Rural-to-Urban Migration It is generally observed that the urban migration is Immigration caused by two kinds of effects: one is “push-effect” Figure 2.4.2 Two Causes on Urban Population which is a pressure originated at rural areas; and Changes “pull-effect” which is an action empowered by the city itself. 3) Natural Increase The urban planner may well know the natural in- City crease mechanism. Given a hypothesis that the city is Push Pull closed, the population will increase by the difference between numbers of births and deaths during a

2-5 2. Social and Economic Development Framework

It is observed that the UB population significantly thousand increased in the year when “zodo” (seriously cold 2,000.0 winter) took place in the country side. This is a typical 1,800.0 push-effect phenomenon. On the other hand, UB city is attracting 15,000~20,000 young people from 1,600.0 the country side annually to obtain higher education. 1,400.0

This is also a typical pull-effects phenomenon. 1,200.0 y = 72678ln(x) - 551620 5) Time-series Regression Model Analysis 1,000.0 R² = 0.9983 In order to foresee the future population, a 800.0 time-series regression model analysis is often 600.0 adopted as the most popular methodology. This is 400.0 based on a statistical technique called “Least Square method”, which is a mathematical procedure for 200.0 finding the best-fitting curve to a given set of points 0.0 by minimizing the sum of the squares of the offsets 2000 2005 2010 2015 2020 2025 2030 2035 ("the residuals") of the points from the curve. Notes: Based on a time-series regression model

Figure 2.4.5 Population Forecast in Ulaanbaatar City

6) Cohort-based Projection Model The dynamic trend of population can be analyzed in use of cohort-based projection model.

Least Square Method “Cohort” was originally one of the ten divisions of a legion in the Roman army, and the most common The linear least squares fitting technique is the sim- use of cohort today is in the sense “group” or “com- pany”. Demographically, “cohort” is defined as the plest and most commonly applied form of linear re- natal group of those who were born in a certain pe- gression and provides a solution to the problem of finding the best fitting straight line through a set of riod, or 5 years. points, however, some standard forms for exponen- A well-known model of the cohort analysis is a tial, logarithmic, or power laws are often explicitly pyramid of the population structure as shown in computed. Figure 2.4.6. By this figure, a change of the demo- Figure 2.4.5 shows the case of the UB City. Assume graphic composition can be foreseen, which implies that y is the future population in year x, the equation some social aspects such as: of y=72,678*ln(x)-551,620 is fitting the statistic facts  The shape implies social stability of the country; 2 with the vertical deviations, R = 0.9983. This means  The composition of “economically active popula- that by using this regression equation, a considerably tion” presents whether or not the society is vig- reliable projection will be obtained. It should be orous and dynamic. noted that this equation is a first degree linier equa-  The compositions of “aged groups” and “young tion, but the logarithmic factor is used. population group” may imply a degree of the forthcoming aging society.

2-6 2. Social and Economic Development Framework

Time Effect < 2000 > < 2005 > < 2010 > Male Female 0 ~ 4 yrs 0 ~4 0 ~4 5 ~ 9 5 ~ 9 5 ~ 9 10 ~ 14 10 ~ 14 10 ~14 Aging Effect 100 ~ 100 ~ 100 Cohort Effect

Figure 2.4.8 Cohort Shifting Dynamics Knowing this trend of cohort changes or co- hort-shifting dynamics, a future population compo- sition can be foreseen in consideration of the demographic factors such as mortality, fertility, re- productive female population, so on. The basic Figure 2.4.6 Cohort Structure of Mongolia mechanism is illustrated on Figure 2.4.9. Those who These social issues can be prospected in comparison are interested in the detailed methodology are rec- with other countries, like Japan and as seen in ommended to should study demographics. Figure 2.4.7. It is obvious that Japan has faced a serious aged society because of too large share of aged group and a small share of children group. year t Cohort Population in the year of t: N(x,t) China cannot be expected as a stably growing soci- ety because of decreasing population of the young Future Fertility Rates: f(x,t) Future Life-table group. based Mortality Rates: S(x,t)=Lx+1/Lx Future Sex Rates Male Female Male Female of Birth: SRB(t)

0~4 5 ~ 100 years old

year (t+5) Cohort Population in the rear (t+5): N (x+5, t+5)

85~ 80-84 75-79 Japan China 70-74 65-69 60-64 Figure 2.4.7 Cohort Structures of Japan and China 55-59 50-54 The mechanism of a cohort analysis is understanda- 45-49 40-44 ble in use of the following chart, Figure 2.4.8. Given 35-39 every 5 years statistical data is available, say, 2000, 30-34 25-29 2005 and 2010, the cohort of 0~4 years old in 2000 20-24 shifted to the cohort of 5~9 years old in 2005, and 15-19 10-14 this cohort shifted to that of 10~14 years old in 2010. 5-9 Needless to say, the statistical difference of the cor- 0-4 responding cohorts was caused by mortality. Nor- Cohort Population in 2010 mally, the higher mortality rates take place for the Assumed Population 2015, based on the Cohort Analysis higher aged cohorts. Census Population 2015 Social Increase 2010-2015

Source: Project Team Figure 2.4.9 Projection of Future Population Based on Cohort Analysis

2-7 2. Social and Economic Development Framework

7) Multivariate Regression Model UB Population UB Population Forecast 2010 1,173 2011 1,221 A multivariate regression model is often used to seek 2,500 2012 1,227 2013 1,271 for a projection model of the future population. 2,000 2014 1,273 2015 1,325 2016 1,326 1,500 A hypothesis is given: The population of UB City shall 2017 1,374 be determined by its economic magnitude (pull ef- 2014 actual 2018 1,424 1,000 data: 2019 1,472 2020 1,538 fect) and the increase of the national population 1,247,703 2021 1,596 500 2022 1,657 (push effect). This hypothesis can be represented as 2023 1,721 0 2024 1,789 the following function: 2025 1,860 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2026 1,934 2027 2,007 Pt = f (Gub(t), M (t)) = αX1 + βX2 2028 2,084 2029 2,165 where, 2030 2,249

 Pt : UB City’s population in year t Source: JICA UBMPS 2009  Gub (t): UB City’s gross regional product in year t Figure 2.4.10 UB city Population Projection based on  M(t): Mongolian population in year t Multi-regression Model Fitting the statistical data in UB City and Mongolia 8) Limit of Growth (nine (9) data sets up to 2005) for such a mul- ti-regression analysis, the multi-regression model for All creatures have a limit of growth. Alike, the pop- the UB City population was derived and the results ulation is the case at a certain level. This can be were as follows. The multi-correlation (R) is as high represented by a mathematic function, “logistic as 0.9998, and deviations (R2) is 0.9997. This means curve”. As far as the population is growing exponen- this multi-regression equation can explain the UB tially, such a limit cannot be depicted. However, city’s population to a considerably certain level. some gradually diminishing curve is given in the population changes, a logistic curve may be fitted as Regression Statistics// a regression function. Multi Correlation ( R) 0.9998388

( R2) 0.9996777 In the case of UB City, K Standard Error 18.22895 a level of more or Growth Limit Data 9 less 2.5 million is thought to be a Coefficient Deviation t -value P-value growth limit, taking α（X1) 0.1712111 0.019218605 8.908612519 4.55826E-05 into account availa-

β（X2) 0.7192954 0.073924735 9.730104523 2.56156E-05 bilities of resources t such as water and Controlled Growth on a Logistic Curve The UB City population curve was delineated as land. shown in Figure 2.4.10. This model was made, using data sets up to 2005. Nevertheless, comparing the actual statistic data in 2014 with the projected pop- ulation, the difference is remarkably small, that is, actual data was 1,247,703, while the projected pop- ulation in 2014 is 1,273,000.

2-8 2. Social and Economic Development Framework

2.5 Projections of Economic Activities

This section focuses on how to foresee economic In order to foster such diversified city economy in the activities in the country and city in the urban plan- City, the most important government role is to pro- ning process. The economic analysis herewith is vide a variety of support tools such as tax-incentives based on long-term perspectives, not short-term as provision, deregulation to encourage the free market analyses. economy, special policies on human resource de- velopment and R&D enhancement in the promising 1) Economic Growth Scenarios business sectors. What activities will be a growth engine for the city? 2) Economic Growth Projection In what sectors/business will people work to manage their lives? How much affluent will people become in How much will the growth rate be obtained in the the future, compared to the present situation? Ur- ling-term? ban planners keep these basic questions in mind. Review of the past performance of the economic Leading industries to drive the city economy should growth is a ley to respond to this question, and an be discussed at first. For the UB City, five types of estimate of growth potential of the leading industries industries were evaluated potential and promising: is another key to discuss this issue. Usually, the value of elasticity of the related service industries to  Mining related business; the leading industries is thought to be 1.2~1.5. This  Tourism and tourism-related; means that given a 1% growth in the leading sector,  Value-added Cassimere and leather products; its related service sector will get a 1.2 ~1.5% growth.  ICT business and BPO (Business Process Out- sourcing); and Knowing these factors, alternative scenarios are usu-  Agricultural and food processing. ally set forth as follows: If these leading industries can drive the UB City, a  Scenario 1 (base-case): the likelihood growth rate number of related service industries will be encour- based on evaluation of past performance; aged. The most possible industries are usually  Scenario 2 (high growth): expectedly higher commercial, trading, banking, construction sectors. growth rate due to preferable achievement of the Intellectual services such as R&D, computer-related, leading industry and its related service industry; and business-supporting services will be extended  Scenario 3 (lower growth): unexpectedly lower through market-mechanism and inter-industrial rela- growth rate due to failure in the leading sector’s tionship. growth.

Leading Industries Related Service Industries

 Support Industries for Mining  Wholesales, retailing and trading  Tourism and Tourism-related  Banking and Insurance  Value-added Processing of  Construction Cassimere  Manufacturing of construction materials  ICT and Business Processing Out-  R&D services sourcing (BPO）  Others  Agricultural and food processing

 Incentive Provisions  Neutral Position for Market-driven  Deregulation Gover’t Economy  HRD Support Supports  Support for HRD and R&D  R&D Enhancement

Figure 2.5.1 Leading Industries and Support System for UB City

2-9 2. Social and Economic Development Framework

Looking into GDP of UB City, a 7.0~8.0% p.a. growth Source:JICA UBMPS 2009 has been recorded since 2010 up to 2014. However, such an economic performance is evaluated too high to keep in the long-term. As for Scenario 1, a

5.0~6.0% growth is thought to be a rational estimate. While, a 7.0~8.0% p.a. growth can be expected as for Scenario 2. Figure 2.5.2 shows an economic projec- tion, based on Scenario 2, for a reference. Changes in the national GDP and the UB City’s GDP are de- picted in this figure, and a growth curve of the GDP per-capita of UB City is also indicated. In this case, UB City GDP will be growing at the average of 7.15% p.a. and GDP in 2030 will reach the 2.8 times as much as that in 2015. Given a 3.0% growth of the popula- tion, the per-capita GDP in 2030 will be 1.8 times as high as that in 2015.

As for a scenario analysis, different estimates of growth rates made by different organizations can be referred for a comparison, as shown below. Table 2.5.1 Different Estimates of GDP Growth Rates

Middle-term Target Long-term Target 14 % Not less than 12% MDG based NDS (2007-15) (2015-21) 7.5% 5.1% IMF (2006-11) (2012-26)

Notes: MDG stands for “Millennium Development Goal”

8,000 2,500.0

7,000

2,000.0 6,000

5,000 1,500.0 4,000

1,000.0 3,000 GDO Mill.Tg.(2000) GDO

2,000 500.0 CapitaPer(2000) GDP UB '000 Tg.

1,000

0 0.0 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 National GDP UB GDP UB GDP Per Capita Figure 2.5.2 Projection of Future Economic Growth

2-10 3. Landuse and Zoning

3. Landuse and Zoning

3.1 Rationale

Landuse Plan their land, which is beyond the government control City planning aims at creating an orderly city space to realize the landuse plan. On the other hand, urban where people enjoy safe, peaceful, amenity and public facilities are more likely to be developed, convenient city life and functional urban activities. A because they are to be developed by the city plan proclaims a future vision of the city in the government or governmental authorities who plan future and Landuse plan is made to achieve city’s the facilities even though it is subject to their budget future vision in spatial term, and lead to possible availability. Accordingly, private land-related rights ideal future land use by controlling landuse which on usage and form shall be controlled to realize the gives adverse effects in economic, social, and future landuse as planned unless the land is at the environmental aspects, and further inducing a better government command. To this end, in some combination of landuse. It indicates the land use countries like and France, adopt a categories, area, and location of a future land use of two-tiered plan system: a general, structure plan for a city. A future spatial structure of a city is formed a city wide land use plan and a detailed district or mainly by land use plan and other urban facilities, local plan for a smaller zones in the city and control especially urban transportation plan. land and building development activities strictly according to the local plan. In such cases, A city will function efficiently and soundly when land development, in principle, is not permitted without use is controlled, guided and developed based on its precise development plan. landuse plan, which serves as tools to deal with the following points: • Realize future vision and policies of Master Plan, Landuse of MUB • Guide urban spatial structure and urban design, MUB has been suffering from a rapid urbanization accompanying uncontrolled sprawl of ger area • Manage urban growth, and expansion as immigrants flock into MUB every year. Share he future image of the city with citizens, • This ensues various urban problems like and the private sector, and so forth. sub-standard living conditions in the area of Landuse plan and Public facility plan under-services of most of public facilities and There are two types of landuse plan. One is that infrastructure, which further cause air pollution, soil regarded as a part of city planning in parallel with contamination, and other environmental problems. other public facility plan, coordinating and feeding Such unorderly expansion must be controlled by back among the related sector plans, like that in USA; proper land use plan and its realization. In UB City, and the other is landuse plan which functions as in the past when the planned economy was adopted, comprehensive basic plan including transportation planning meant realizing urban development. After and other facility plans in it, like those of German, or the country adopted the and the France. land privatization policy, the city planning has Landuse and Land use control dramatically changed to make it difficult to realize. A landuse plan envisions a long-term intention of MUB is expressing a sense of crisis in this situation, city development policy, and it does not show what and the UBMP2030 describes that UB is suffering is surely realized as planned. A landuse plan will be from over-concentration of socio-economic activities, realized by indirect means of zoning policy. Land use and cannot afford to accommodate and serve such a is planned by the government, but decided by land large influx of population unless the government owners and possessors on when and how to use shall control immigration into UB city.

3-1 3. Landuse and Zoning

3.2 Key Topics

Land use planning contains planning steps as shown in Figure 3.2.1 below. This chapter briefly explains the following key topics on Landuse plan.

（1） Urban Growth Management with Land Use including alternatives; (3) space (land) Control requirement forecast, (4) allocation of each land A land use plan of a city shall comply with a use types; (5) feed-back and consistency with land management policy in wider area at higher infrastructure plan, especially, transportation level. And in order to make an efficient public facility, and other social/community facilities in investment to accommodate and serve neighborhood area development concept and increasing and developing urban area, urban service areas of each facility. growth boundary shall be delineated. （3） Means to realize Land Use Plan: Zoning （2） Land use plan formulation within City planning （control on buildings） area Unless the land is not exclusively planned and A land use plan of a city is made to achieve a developed by government, the land use plan is city development vision and illustrates the land not likely to be realized easily. Accordingly, use types, location. It takes the following steps many countries adopt and enforce measures to to be made: (1) Land available and suitable for control activities related to land development development delineating; (2) density plan in land so that the land use plan is to be realized accordance with the urban structure policy, as planned. Such measurers includes

Socio-economic Development Development Vision, goals Framework at City

Socio-economic Development Spatial Structure Policy Framework by Zone National/regional Land use policy/plan Development framework by alternative scenario Transportation Plan Land condition/ suitability Formulation of Land use Plan Other infrastructure • Urbanization Promotion/control Plan Area Existing • Land and Location Requirement Landuse Large approved dev. Plan Realization of Landuse Plan • Landuse zoning control • Building control District plan •

Figure 3.2.1 Land use Planning Flow

3-2 3. Landuse and Zoning

3.3. Urban Growth Management and Land Use Plan

Issues and Objectives

Land is a limited resource and should be utilized in a In order to provide adequate urban services to balanced and efficient manner in a wide area context. residents in the ger are, urban growth shall be Also in order to secure to keep living environment at managed properly. Because of the magnitude of a certain level or better, development area shall be the migrants, land area wise, in the capital city area manage so that people can enjoy a good quality of of MUB, with 9 districts, from 2008 to 2009, life. For this purpose, land use for a city is planned agricultural land decreased by 5,000Ha, and the in compliance with a land use plan of a wider area, forest land, 75Ha while human settlement area and also delineates urban growth area or increased 4,950ｈａ, road space, 9Ha. urbanization promotion area to ensure adequate public facilities. Objectives

Urban growth management and land use plan aim Issues in MUB to: MUB is suffering from an unorderly sprawling of ger - Ensure a proper land management in a regional area spreading, which causes a various urban context, problems which is caused mostly by migrants from - control unorderly expansion of ger area and rural area, as MUB cannot control immigration. The better living environment, and magnitude of immigrants is huge, with more than 300,000 people came to the capital city of UB from - realize a Compact City as envisioned in the MP outside during 2000 to 2012, and many of them have settled in ger area, according to UBMP2020, Vol.1. In this section, urban growth management is briefly explained. Approaches

（1） Hierarchical Landuse management and For example, in Japan, city planning area is Landuse Plan decided from a larger context of land A landuse plan at a city level must be decided management at national and prefectural levels from land management in a larger area context by delineating land into five land categories, from national, region, and . The land namely: (1) Natural conservation area, (2) use plan should be consistent with a higher National park area, (3) Forest area, (4) level landuse plan at a larger, regional area. Agricultural Area, and (5) City Planning Area.

National Land Use Planning Law (NLUPL) Five Separate Laws

City Planning Area National Land Use Plan

National-level Plan Agricultural Area General Land Use Plan By Each Prefecture (1) General Land Use Plan Map Forest Area Prefectural-level Plan (Five Categorized Areas) (2) Planning Document Natural Park Area Land Transaction Regulation Municipal-level Plan (1) Permission Standard Natural Conservation (2) Recommendation Standard Legends Area City Planning Area Agricultural Area Forest Area 4 Natural Park Area Natural Conservation Area

Figure 3.3.1 Land Management in Japan Figure 3.3.2: Example of National Land Use Plan (Japan) 3-3 3. Landuse and Zoning

（2） Urban growth boundary - urbanization procedure is described in detail in the GIS promotion and control areas manual. As described in an introductory part of this Table 3.3.1 Environment Zoning and Urban manual, to control urbanization in a proper Planning Area manner, urban growth area, or urban growth Environment Urbanization City Planning boundary is to be established to provide Zoning Area adequate public facilities to serve development Natural the areas not to be Outside Urban at a predetermined service level. Preservation urbanized Planning Area Area the areas to be subject Urban Planning Urbanization promotion area is an area to major urban Area delineated in a city plan within which urban activities only with development is encouraged and outside of strict controls which urban development is discouraged. Development The areas have already Potential urbanized or are

Area potential development (1) Situational analysis of the planning area To start with formulation of land use plan, firstly, (2) Urban Promotion Area and Urbanization land suitability analysis should done to Control Area understand the land characteristics and Once spatial framework based on environmental availability for development potential and zoning, Urbanization Promotion Area or urban constraints. growth area is delineated in the planning area by For drawing up a landuse plan, many data must (1) Forecasting socio-economic framework for be prepared in advance, as summarized in the planning area, (2) developing regional section 2.5 “Baseline indictors required for density targets or estimates, and public service urban planning issues identification,” in GIS standards, and (3) estimating residential and manual. nonresidential land required to accommodate Required information and maps are listed in future urban growth, and (4) Future public Table 3.4.2. In addition to these data, building investment of public facility service area. survey also should be done to information on

Building Use, Structure, Total floor City Planning Area area, ,Building area, Site area Forest Area (1) Spatial framework based on Environmental Natural Conservation Area Urbanization Zoning Control Area (UCA) Growth In order to formulate land use plan in a proper Agricultural and Rural Village Area boundary and most suitable way, land is analyzed to Disaster and Flood Prone Area

identify land suitability, or development Growth Boundary Urbanization Promotion Area potential and constraints. Land is broadly (UPA) Existing Built-up Area categorized into two uses as natural preservation area and development potential area from New Development Area

environmental point of view. Environmentally sensitive area in principle should be restricted Figure 3.3.3 Concept of Urban from development. On the other hand, development potential area could be used for human settlement and urban activities. For this spatial framework analysis, GIS technique is used and precise technique and

3-4 3. Landuse and Zoning

Table 3.3.2 Baseline Information and Thematic Maps required for ATLAS No. Category Thematic Maps 1-1 Satellite Imagery 1 Base Map 1-2 Topography 2-1 Elevation 2 2-2 Natural Condition Water System (Rivers and River Basins) 2-3 Geology 3 3-1 Reservation Areas Environmental Preservation Areas 4-1 Geology by Softness 4-2 (1) Identified Active Faults and Liquefaction 4-3 by National Earthquake-triggered Landslide Agencies Tsunami-Prone Areas 4-4 Flood Hazard Area 4-5 (2) Identified Lowland Hazard Area (less than expected Tsunami heights) Hazardous 4 4-6 based on Slope Hazard Area (more than 18%) Areas 4-7 Topographic Flood Hazard Area 4-8 Map Landslide Hazard Area 4-9 Building Area Ratio 4-10 (3) Social Informal Settlement Area 4-11 Constraints Areas Difficult to Access by Emergency Vehicle in Urbanized Area 4-12 Fire Hazard Area in Urbanized Area 5-1 Existing Land Use 5-2 Existing Urban Land Use 5 5-3 Land Use Development Suitable Area and Urbanization 5-4 Location of Industrial Zone, EPZ 5-5 Location of Housing Development Area 6-1 Transport System 6-2 Existing Road Network by Type 6 6-3 Urban Transport Existing Road Network by Width of Carriage Way 6-4 Existing Road Network by Number of Lanes 6-5 Existing Road Network by Existence of Median 7-1 Administrative Structure 7-2 Population (Density, Growth Rate, Nighttime, Daytime) 7-3 Urbanized Communes . 7-4 Socioeconomic Condition Employment by Industrial Sector

7-5 Average Household Income 7-6 Car Ownership 7-7 Distribution of Workers at Residence and at Workplace 8-1 Average Housing Floor Area per Capita 8-2 Land and House Ownership 8 Living Conditions Ownership of Electrical Equipment (i.e. Air conditioner, Washing Machine, 8-3 Refrigerator, Radio, TV, Satellite TV, Mobile Phone, PC, Internet, etc.) Connectivity of Urban Infrastructures (Piped Water Supply, Sewage, Solid 9-1 Waste Collection, Electricity, Fixed Telephone, etc.) 9 Urban Services Location of Public Facilities (City Hall, Fire and Police Station, Hospital, 9-2 Shopping Mall and Bus Terminal, School, etc.)

3-5 3. Landuse and Zoning

(a) Urbanization Promotion Area of MUB Urbanization Promotion Area of MUB, 35,206 Green Zone is determined to prohibit activities, Ha, has been established as , based on such in land to be protected. The Green Zone protected area or other areas not suitable for includes: development, and the following decisive factors: • Agricultural Land • Land features • Country side settlement • Ecological factors • Summer Camp • Disaster vulnerability • Leisure/recreation area • Existing settlement • Green zone forest • Future development of infrastructure • Region with Ecological protection area

• Protected Area This area includes the rivers of Tuul, Selbe,

Uliastai, Environmental Protection Area, and

apartment area and ger area.

Figure 3.3.4 Green Zone structure

Figure 3.3.5 Urbanization Promotion Area of MUB

3-6 3. Landuse and Zoning

International Experiences

Japanese case Under the area division system in a city planning area is classified into Urbanization Promotion Area and

Urbanization Control Area so that public Urbanization control Area investment for the development of such urban infrastructure as roads, parks and sewerage can be efficiently made to create a high quality urban area. If an area which has no prospect of future adequate infrastructure development is designated as an Urbanization Promotion Area, a poor-quality built-up Urbanization Promotion Area area may result due to uncontrolled and unplanned developments. Urbanization Promotion Area is Figure 3.3.6 Image of UPA and UCA defined by City Planning Law as: “Already built-up area and area which is to be built up in a well-planned and positive manner with priority in about ten years.” It is, however, pointed out that the most of the urbanization promotion areas in Japan are set too large because many land owners did not want their land categorized as urbanization control area, otherwise, their development are strictly controlled. Review of the Urbanization Promotion Area The UPA should be reviewed, to avoid a poor performance; therefore the following are to be Figure 3.3.7 Example of UPA and UCA, conducted: Regular Review: Sets out the basic framework for Kamakura Area Division by calculating a suitable population and industry for the future based on the findings of a Basic City Planning Survey which is conducted approximately every five years and incorporates such population figure into City Planning while coordinating the competent authorities for agriculture and forestry, etc. Occasional Review: In addition to the regular review, an occasional review is conducted for a specific district within the set framework for population whenever the prospects for systematic development, Figure 3.3.8 Photo Image of UPA and UCA etc. become clear.

3-7 3. Landuse and Zoning

Source: http://chatterbox.typepad.com/.a/6a00d8341c86d053ef0148c6911ee5970c-popup, (photo courtesy Google) Figure 3.3.9 Example of Growth Boundary, Portland Oregon, USA

3-8 3. Landuse and Zoning

3.4. Land Use Plan Formulation

Issues and Objectives

A land use plan shows how to use the limited lack of public facilities, even worse give adverse resource of land for future growth and renewal of a impact on environmentally sensitive zone. city by allocating land among competing land uses Not only they suffer from lack in infrastructure properly and functions as a long-term picture provision, but what’s worse, some 30,000 households towards which to guide the city’s development. It live in a dangerous area like area near hi-voltage is noted that a land use plan is not necessarily able to transmission line, flood prone area, valley, and be achieved. remote area for emergency cars to reach. Land use issues in MUB Since turning to market-oriented economy and Objectives: adoption of land privatization policy, the situation Land use plan in MUB aims: completely has changed and city planning work has • to realize the MP vision towards a sustainable become really difficult to realize. In the past years Compact City, when MUB adopted a planned economy system, • to accommodate all the socio-economic MUB planned. Nowadays, uncontrolled expansion activities in a proper land use in connection with of ger area without proper urban services provision is public facility , provision, and one of the most serious issues in land use in MUB. Recently, urban developments have been found • To achieve proper combination of protected, more in the south of , around Zaisan area, unchanged, renewal/redevelopment, and new and along the Chingiss Avenue to the Chingis development areas. International Airport, and in-fill developments in court yards of the apartment complexes. Such In this section, a brief process of land use planning developments has led to over-supply of apartments, will be explained. Approaches

(3) Land use planning process A planning area at a city scale is broadly classified as A broad process of land use planning is shown in follows: Figure 3.4.1. Table 3.4.1 Broad Land use Category Residential Basic Survey Public Facility Buildings Industrial Urban Business area Planning Land Commercial Area Green/open space Urbanizati Present Status Future Development on history Analysis Vison, goal Infrastructure: Transportation, and others Agriculture Other area Waterbody

Development Planning Development Framework standard strategies Land use is determined for economic, social, and public interest reasons. In a market-oriented society, economic reason is one of the strongest causes to Space requirement Land condition determine land use. From public interest aspect, by landuse category safety, health, convenience, and amenity, further welfare, comfort, culture are important. Public Landuse Plan investment efficiency is also important. Figure 3.4.1 Land use planning Process Land use Furthermore, environmental sustainability is one of categories

3-9 3. Landuse and Zoning the most important points to be considered in land area. Apartment area is originally built up in high use planning as public interest. density area, while ger areas is rather less dense. However, in recent days, even apartment areas, there (2) Space (land ) requirement have happened many in-fill developments and old low-rise apartments have been reconstructed into According to the future socio-economic framework, high-rise apartment buildings, which bring more space/land required for each activities are to be population than planned, which thus cause a estimated. Sections that follow briefly explain shortage in community facility provision including general methods to estimate the space requirement education facility, urban park, citizens community for each land category. center, and so on. On the other hand, ger area is As seen below, landuse intensity, or amount per unit originally low density area with around 50 area (density) is the key to estimate land requirement persons/ha, with mostly detached simple houses or to accommodate the soci-economic framework for ger (movable felt house). Community facilities are the master plan. absolutely in short in ger area. (a) Residential Area Community facilities or social facilities, such as Residential area is usually the largest land use for a educational facilities (, elementary, city. Residential area includes: houses, community secondary schools, park, playground, community hall, facilities, and access roads. library, etc.) should be planned and designed based Future Land Requirement is estimated as sown below, on the service area in neighborhood area based on Population, number of HH, average size of development approach HH, housing types by planning zone. This should be estimated by referring the housing policy. Present facility inventory

Future population Population by age, by zone

Future population by zone Planning standard

Household size Future demand

Housing types forecast Facility service area

Population density Facility Plan

Residential land requirement by zone Figure 3.4.3 Land Requirement Estimate of Community Facility Area

Land availability (b) Commercial Area Residential Area Plan Area required for commercial activities is estimated as shown in the flow below. Commercial area is estimated by using statistical data on population, Figure 3.4.2 Land Requirement Estimate of number of commercial facilities, sales amount, Residential Area commercial facility floor area, and commercial area.

In MUB, regarding the density of the residential areas is characterized largely by apartment area and ger

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Commercial facility service Based on the estimated number of office workers, area and area required per a worker, total floor area required for offices is estimated. And then office Population in the service area area will be estimated by using the total floor area and estimated floor area-building area ratio. Forecast average income These statistical data to be used for this estimation should be acquired from office survey including, Consumption propensity number of offices, number of office workers, floor area of offices, building area. Consumption amount est.

(e) Industrial Area Consumption amount in the service area Area required for the industrial sector is estimated as shown in the flow in Figure 3.4.6. Land for industrial Sales per floor area est. use is estimated based on land requirement per employees and/or sales of industrial categories Average FAR est. which are targeted and envisioned in the city master plan. Land availability for such industrial uses in Commercial Land target zone in the city is also examined. Requirement

Figure 3.4.4 Land Requirement Estimate of Est. employment, production of industrial sector Commercial Area

Sub-sectors (groups) of selected industries (d) Office area Area required for office space is estimated as shown Est. employment, production of industrial sub-sectors in the flow below.

Available Land Average space requirement Est. population Office Survey for each industrial group Location characteristics

Office worker rate No. of to population Office Allocation of industrial area

Est. Number of No. of Office Office workers Industrial Land Plan workers

Office floor/office worker est. Figure 3.4.6 Land Requirement Estimate of Office Floor Office Floor Area Area Industrial area Requirement (3) Location requirement Average FAR est. It is pivotal to locate land required for planning land Office Land uses onto properly. For this, based on the following Requirement characteristics and functions of each land use Figure 3.4.5 Land Requirement Estimate of category, Offices • Future urban structure towards Compact City • Existing, on-going, and planned infrastructure development plan, especially transportation facility

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• Neighborhood development concept and community facility development plan • Land use • Land use intensification, by in-fill development, renewal, redevelopment, reconstruction in the apartment area • Land use change: Development of sub-centers near transportation nodes, relocation of factories, relocation of education institutes, m etc. Figure3.4.8 Micro Planning Zones of UBMP2020 • Improvement of adjacent land use conflict like industrial area and residential area (c) Residential area • Geographical feature, slope, safety of land Residences are located in exclusive residential area or • Relocation of people living on dangerous areas mixed use area with commercial, business, small like disaster prone area and restricted area factories. Location of houses are properly planned for apartment or non-apartment houses in the • Approved development projects present ger area. Residential area should be (a) Planning Zones in MUB located on safe and convenient areas, considering UBMP2020 divides MUB into eight planning zones the geographical characteristics, transportation based on the area characteristics as follows: (1) East, facilities, and neighborhood commercial facilities, (2) Central, (3) 1, (4) West 2, (5) South-west, (6) and so on. New planned zone, (7) North-west planned zone, (d) Neighborhood Planning Unit and (8) North planned zone. And sub-centers are planned in these zones. In MUB, in the apartment area, public facilities area provided based on Russian standards. However, ger area is not provided with adequate public facilities. When ger area as residential area is planned to be developed, neighborhood planning unit, is proposed by Clarence A. Perry, is one of the planning approaches to adopt. In this concept, public facilities are planned by serviced almost 5,000 to 10,000 people of neighborhood area with an area of some 1km2, stretching around 1 km by 1 km, as

shown in figure below. Figure 3.4.7 Planning Zones Neighborhood Planning Unit : One primary school district is a neighborhood residential area unit, (b) Planning unit micro districts with 7,000 to 10,000 people, in which necessary public facilities are planned with a certain service In UBMP2020, 47 planning unit micro districts are catchment area. established, which area categorized into 22 of Community center Commercial center School complex (elementary, apartment area, 10 of public, 10 of ger area, and 5 of secondary, high schools) industrial area. Kindergarten Neighborhood park Children’s park/playground

Trunk road District collector/distributer road App. 1km Pedestrian road Figure 3.4.9 Concept of Neighborhood Planning Unit

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To plan these community, social infrastructure, it is Large commercial area/center and neighborhood useful to use GIS techniques. commercial area shall be planned differently. (e) Ger Area Development Commercial facilities like large shopping malls, Ger area is largely divided into three areas, namely: warehouses, markets, and so on should be planned central, middle, and peri-urban ger areas. In taking account of land use efficiency in the central UBMP2020, these areas are planned by delineating area, and adverse effect of traffic congestion. urban promotion area. The central ger area will be UBMP2030 plans sub-centers with commercial connected to the central infrastructure network; functions, based on the present land use and the middle ger area will be developed with the commercial facilities concentrations and future central water supply and sewerage and local cluster development of commercial and business functions heating system. with the future transport facilities of road network

Non-urbanization Area (out of and public transportation network. urbanization boundary): Urbanization Promotion enforcement of resettlement and boundary no public services provided

Low-rise Residential Area (Middle and peri-urban Ger area): Central Comprehensive living condition Local improvement (land readjustment, supply cluster cluster infrastructure network network development, social housing provision, etc.)

High& Mid-rise Residential Central Area (Central& middle Ger area): network high-mid rise apartment and Urban redevelopment connected with central infrastructure Water Heating / networks Sewerage Figure 3.4.12. Sub-center Development

Figure 3.4.10 Ger area development concept

As shown in Figure 3.4.12, the closer to the central area, the higher the density of the residential area in ger area is planned.

Figure 3.4.13 Future Road Network

Figure 3.4.11 Ger Area development policy

(d)Commercial area Commercial area is formed around the central area Figure 3.4.14 Public Transportation Network which contains Central Business District (CBD), transportation hubs, administrative facilities, except for neighborhood commercial area.

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(e) Industrial Area In land use planning, the three major land uses, Industrial activities are important to generate sales namely: residential, commercial, and industrial uses and employment. However, location of the industrial shall be planned taking account each characteristics, area shall be planned from the following points: so that land is used efficiently and each land use area functions as expected to create a good urbanized • Environmental consideration and treatment, in area with a good living environment. order not to give any adverse effect on environment, like pollution, Furthermore, alternative landuses are prepared to check and select best landuse plan which meets the • Relocation of the factory from viewpoints of development vision and urban spatial structure environment and efficient/intensified use of policy. land, In the process of making land use plan, it is • Possibility of consolidation of factories in indispensable to maintain consistency with other industrial park or so, for efficient, better plans, most importantly with transportation facilities management in terms of business efficiency and plan which will determine the urban spatial spine, environmental aspects, thus most influential location of social and economic In MUB, there are industrial zones in the southern activities. Of course, other utility plans also should area along the Chigis Avenue and the eastern area. be taken into consideration in land use planning. And environmental adverse effect area pointed out Consistency should be confirmed and feedback to each other in both special and time frames. (f) Green and open space plan (h) UB’s land use plan Geen and open spaceis is very important to Practicing the above, the MUB has formulated a land functions as follows: use plan for the year 2030 as follows: • Maintenance of natural environment and ecology • Good landscape and vista • Buffer zone to control expanding urbanization • Natural disaster prevention • Space for recreations and outdoor sports • Urban amenity

Land requirement and location requirement should follow the planning design norm and standard. Green and open space is described in Chapter xxx Environment and Disaster Management.” Figure 3.4.15 Landuse Plan of MUB in 2030

(g) elation among the various landuse

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International Experiences

JICA Study for UBMP 2030 JICA Study for UBMP2030 conducted land suitability analysis in the following conditions. Table 3.4.2 Conditions for Land Suitability Analysis Natural Conditions Infrastructure Conditions Socio-economic

- Steep Area - Road Access Accessibility to OVERALL EVALUATION - Water Resources Availability of - CBD Preservation Area - Heating Supply - Sub-centers - Railway Stations - Water Cultivation Area - Water Supply Socioeconomic - Bus Routes Conditions - Groundwater - Sewerage Accessibility to Sub-center - Schools Accessibility to Central Business District Contamination-prone - Electricity Network - Parks Area - Telecommunication - Religious - - Water Kiosk Infrastructure Natural Preservation Facilities Conditions Availability of Heating Supply System Area (Legally Accessibility to Road Network Designated)

- Fertile Land Suitable Natural for Agriculture Conditions Water Resources Preservation Area - Forest Land Steep Area - Flood-prone Area

Land Development Suitability based on Natural Conditions (UB Development Potential Analysis based on Trend City) Urbanization (UB City)

Sui Un tab sui le tab le

Most Unsui table Development Potential based on Existing Development Potential based on Adequate Land Infrastructure Conditions (UB City) Utilization (UB City)

Figure 3.4.16 land Suitability analysis of JICA UBMPS2030 Alternative development Scenarios: Trend vs Compact City

Table 3.4.3 Comparison of Growth Patterns between “Trend” and “Compact City”in Year 2020 - 2030 Projected Population Distribution Unit: persons Present Trend Compact City Area Year 2007 Year 2020 Year 2030 Year 2020 Year 2030 CBD 77,800 98,400 107,200 108,200 134,900 Central 469,100 567,400 588,100 592,300 657,400 Urban 243,200 371,800 394,800 469,400 547,800 Suburban 155,600 397,400 648,900 265,100 398,900 Total 945,700 1,435,000 1,739,000 1,435,000 1,739,000

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Table 3.4.3 Comparison of Growth Patterns between “Trend” and “Compact City”in Year 2020 - 2030 (con’d) Projected Employment Distribution Present Trend Compact City Area Year 2007 Year 2020 Year 2030 Year 2020 Year 2030 CBD 76,500 109,700 146,400 115,500 174,500 Central 200,800 312,100 390,800 320,200 415,400 Urban 63,800 191,600 245,900 218,300 297,400 Sub-urban 25,700 168,600 356,900 128,000 252,700 Total 366,800 782,000 1,140,000 782,000 1,140,000 Projected Urbanized Area Unit: ha Present Trend Compact City Area Year 2007 Year 2020 Year 2030 Year 2020 Year 2030 CBD 540 570 570 550 570 Central 4,490 5,480 5,690 4,690 4,800 Urban 4,300 5,850 6,130 5,530 5,950 Sub-urban 6,590 9,600 12,670 6,990 8,010 Total 15,920 21,500 25,060 17,760 19,330 Projected Unit: persons/ha Present Trend Compact City Area Year 2007 Year 2020 Year 2030 Year 2020 Year 2030 CBD 144.1 172.6 188.1 196.7 236.7 Central 104.5 103.5 103.4 126.3 137.0 Urban 56.6 63.6 64.4 84.9 92.1 Sub-urban 23.6 41.4 51.2 37.9 49.8 Total 59.4 66.7 69.4 80.8 90.0 Note: Urbanized Area for “Compact City Scenario” includes urbanized area in the outside of Urbanization Promotion Area (UPA). Total area of UPA of Zoning Map is about 18,500 ha. Source: JICA Study Team

Figure 3.4.17 Urban Structure Model of the Compact City, Ulaanbaatar

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3.5. Zoning system: Means to realize Landuse Plan

Issues and objectives

General deciding details as is adopted in Germany, land use plan is more likely to be realized including local plan. In order to materialize the landuse as planned, landuse control, or development permit should be Issues in landuse control in MUB adopted, by limiting private right for public interest. At this moment, Mongolia fails to control land use In particular, Mongolia has shifted from planned because: economy to market-oriented economy and adopted • No landuse zoning system land privatization policy, land use plan is hard to be • No building bulk control, like BCR, FAR, height materialized, even though the detailed development plan system exists as it does not seem to function • Not well functioning building construction properly. control in restriction area, Private-centered city planning system like those of • Poor enforcement of approved detailed area Japan and USA, the minimum level of urban development plan, including building permit development is secured by indirect control systems In such a situation, zoning system or other land use of landuse zoning related control system. In this control system that works is strongly needed. sense, land use plan is a kind of vision. On the other hand, public-led, rigorous city planning system In this section, some landuse zoning related controla systems are introduced. Approach

(１) Landuse control systems Land use zoning system usually controls the following: The following are major control systems of land use: • Type of land uses allowed • Landuse zoning • Type of buildings allowed • Policy zoning, Special zoning Intensity or density of development • District plan • • Height, building coverage ratio, total floor area For example, in Japan, as shown in figure below, ratio to land plot Urbanization promotion Area has land use zoning, • Setback, or placement of structure other policy zoning, and further district plan, which are all regulated land use and development in Buildings are usually controlled in building area and designated zone with legal power. volume to the site land on which they stand. The following indicators are used to control building size and location.

District Plan • Building Coverage Ratio (BCR)=Building area/plot area • Floor Area Ratio (FAR)=Total floor area / site Other Zones and district land area • Building set-back Land Use Zones • Etc.

Urbanization Control Area (UCA) Urbanization Promotion Area (UPA) City Planning Area Figure 3.5.1 Concept of Land use planning system in Japan (２) Landuse Zoning

3-17 3. Landuse and Zoning

location may be part of more than one overlay district. C

B (４) District Plan A In Germany, Two-tiered land use system is adopted. D (Land area) There are a general land use plan (F plan), and district plan (B plan) which is made based on F-plan. BCR= Building area (A)/site area (D) In order to keep living environment at a certain level FAR= total floor area (=A+B+C)/site area (D) Figure 3.5.2 BCR and FAR or better, any B-plan must set out the use for land and buildings, designate land on which development may take place and areas that are reserved for Zones are basically categorized into three basic infrastructure. The B-plan is also permitted to zones of “residential”, “commercial”, and “industrial”, address issues such as plot sizes, building lines, which are further divided into sub-categories. For building heights, roof forms, areas for communal example, in Japan, a total of 12 zone categories, facilities, affordable, sheltered or assisted housing, namely: 6 residential zones, 3 commercial zones, areas of private and public open space, the maximum and 3 industrial zones are used. In USA, depending number of dwellings, and more recently, ecological on cities, New York City has 10 residential zones, 8 requirements. commercial zones, and 3 manufacturing zones in its zoning system. Each zone has its own controlling items of allowable In Japan, according to local circumstances at a building type, size, and other. district level, municipalities lay down a District Plan. The Plan shows not only the future vision（Policy These are illustrated late in the international Directions ） of the district but also provides the experiences. regulations（District Improvement Plan）relating to detailed matters, such as site, use, construction and (３) Special zoning building. The Plan also shows individual features that In addition to the ordinary zoning, special zoning reflect the views of the local community. The systems are also used. For example, in Japan, there following area regulated in the district plan area. are policy zones to regulate other aspects of land use, • Location of public facilities (local roads, small covering not every land use zones but limited areas. parks, open spaces, footpaths, etc．） The zones indludes.: • Building control and regulations land use, • Fire prevention zone floor-area ratio, building coverage ratio, scale of • Intensive use zone building lot, setback of building from the boundaries, design, hedge, green space ratio • Special block development zone etc.） • Green area preservation zone • Preservation of green areas • Green promotion zone In USA, there is a Planned Unit Development (PUD) Scenic Landscape zone • Districts. These are overlay districts providing • Historical heritage conservation zone flexibility to allow for the integration of a variety of • Green productive zone land uses and densities into multi-site phased • Parking area development zone developments. A developer may choose to conform to the PUD controls in lieu of the base district • Logistics zone requirements. Likewise, in the USA, overly district zoning is adopted, which modify the regulations of the base zoning (4) Zoning Approach proposed by MUB district in different ways as set forth in the ordinance. MUB has proposed to adopt a zoning system in the Not every location is within an overlay district, but a city as shown in UBMP2030.

3-18 3. Landuse and Zoning

MUB has proposed the following 7 categories: • Residential apartment zone • Public business zone • Industrial zone • Green facility zone • Combined utilization zone • Engineering pipeline network zone • Special purpose zone

These zones are further divided into 22 sub-zones as shown in Table 3.5.2.

Figure 3.5.4 Landuse Sub-Zones in MUB Proposed in UBMP202

Figure 3.5.3 Landuse Zones in MUB Proposed in UBMP2030

Table 3.5.1 Area Composition of Main Zones in UBMP2030 2010 2020 2030 No Classification area /ha/ % area /ha/ % area /ha/ % 1 Residential apartment zone 11,147.83 31.66 9,886.20 28.08 9,280.46 26.36 2 Public business zone 930.36 2.64 2,955.38 8.39 2,774.32 7.88 3 Industrial zone 2,024.77 5.75 1,326.97 3.8 1,245.73 3.54 4 Green facility zone 17,549.81 49.85 1,2875.39 36.57 1,2875.39 36.57 5 Combined utilization zone 623.11 1.77 520.95 1.48 489.01 1.39 6 Engineering pipeline network zone 2,431.86 6.91 7,087.87 20.12 7,987.85 22.69 7 Special purpose zone 498.31 1.42 553.24 1.56 553.24 1.57 Total 35,206 100 35,206 100 35,206 100

3-19 3. Landuse and Zoning

Table 3.5.2 Proposed zoning in UBMP2020 № Zone Major Zone Sub-zone FAR BCR 1 Residential 1 Residential 1.1 Private house with allocated private land 0,4 0,2 building, building zone 1.2 Low rise building zone 0,6 0,2 public 1.3 Medium rise building zone 1,2- 2,1 0,4 1.4 High rise building zone 3,2 0,4 1.5 Ger district zone 0.1-0.25 0,125 2 Public business 2.1 Public business zone of the city 10 0.5 zone 2.2 Public business sub zone of the city 5 0,5 2.3 Micro district’s trade and business zone 2,5 0,5 2.4 Industrial zone 2,5 2 Industrial 3 Industrial zone 3.1 Light industry zone 2,4 0,6 3.2 Specific industrial zone 2,4 0,6 3.3 Transportation and wholesale center 2,4 0,6 3 Green 4 Green parks zone 4.1 Open area - - parks, 4.2 Park, green zone - - leisure and tourism zone 5 Mixed zone 5.1 Industrial and settlement mixed zone 2,5 0,5 5.2 Industrial and trade mixed zone 2,5 0,5 5.3 Trade, industry, and public zone 2,5 0,5 4 Engineering 6 Engineering 6.1 Engineering pipeline network zone - - pipeline pipeline network 6,2 Engineering facility zone - - network, zone road and transportatio n zone 5 Special 7 Special purpose 7.1 Special purpose zone - - purpose zone zone 6 Summer 8 - - - - camp zone 7 Agriculture 9 - - - - zone Note: FAR is the ratio of a building's total floor area to the size of the piece of land upon which it is built.

3-20 3. Landuse and Zoning

International Experiences

Japanese land use zoning system In Japan, twelve categories of Land Use Zone provide industrial uses. Each Land Use Zone has a pattern for land-use zoning in each of urban area, specifications concerning the uses of buildings with urbanization promotion area. These can be generally can be constructed in the zone. The following is an categorized into residential, commercial and image of 12 Landuse zone regulated in Japan.

Category I exclusively lo-rise residential zone Category II exclusively low-rise residential zone Category I mid/high-rise oriented residential zone

This zone is designated for low rise residential This zone is mainly designated for low rise This zone is designated for medium to high buildings. The permitted buildings include residential residential buildings. In addition to elementary/ residential buildings. In addition to hospital and buildings which are also used as small shops or offices junior high school buildings, certain types of university buildings, certain types of shop buildings and elementary/junior high school buildings. shop buildings with a floor area of up to 150m2 with a floor area of up to 500m2 are per- mitted. are permitted.

Category II mid/high-rise oriented residential zone Category I residential zone Category II residential zone

This zone is mainly designated for medium to This zone is designated to protect the This zone is designated to mainly protect the high rise residential buildings. In addition to residential environment. The permitted residential environment. The permitted buildings hospital and university buildings, the permitted buildings include shops, offices and hotel include shops, offices and hotel buildings as well buildings include certain shops and office buildings with a floor area of up to 3,000m2. as buildings with karaoke box. buildings with a floor area of up to 1,500m2 to pro- vide conveniences for the local community.

Quasi-residential zone Neighborhood commercial zone Commercial one

This zone is designated to allow the This zone is designated to provide daily shop- Banks, cinemas, restaurants and department introduction of vehicle-related facilities along ping facilities for the neighbourhood residents. In stores are constructed in this zone. Residential roads while protecting the residential addition to residential and shop buildings, small buildings and small factory buildings are also environment in harmony with such facilities. factory buildings are permitted. permitted.

Quasi-industrial zone Industrial zone Exclusively industrial zone

This zone is mainly occupied by light industrial Any type of factory can be built in this zone. This zone is designated for factories. While all facilities and service facilities. Almost all types of While residential and shop buildings can be types of factory buildings are permitted, factories are permitted excepting those which are constructed, school, hospital and hotel residential, shop, school, hospital and hotel considered to considerably worsen the buildings are not permitted. buildings cannot be constructed. environment Source: MLIT, Japan Special Land Use District A Special Land Use District is designated as a supplement to the land-use regulations on the Land Use Zone. It is designated within a Land Use Zone aiming at specific purposes, such as achieving more effective land use or a more pleasant environment. Regulations under Land Use Zone are applied uniformly nationwide. However, in the Special Land Use District, Land Use Zone regulations can be modified by municipal bylaw. In correspondence with the local characteristics, each municipality can stipulate the strengthening or relaxation of Land Use Zone regulations.

Figure 3.5.5 Image of Landuse Zones in Japan

3-21 3. Landuse and Zoning

Category I exclusively lo-rise residential zone Quasi-residential zone

Category II exclusively low-rise residential zone Neighborhood commercial zone

Category I mid/high-rise oriented residential zone Commercial one

Category II mid/high-rise oriented residential zone Quasi-industrial zone

Category I residential zone Industrial zone

Category II residential zone Exclusively industrial zone

Source: MLIT, Japan Figure 3.5.6 Land Use Zoning in Japan (Twelve categories)

can be built usually cannot be built

Categroy I Categroy II Categroy I Categroy II Exclusively Exclusively Exclusively Exclusively Categroy I Categroy II Quasi- Neighborhoo Quasi- Excusively med/high med/high Commercial Industrial Examples of buildings low-rise low-rise residential residential residential d commercial industrial industrial rise-oriented rise-oriented zone zone residential residential zone zone zone zone zone zone residential residential zone zine zone zone

House, Houseis with other small scale function (store, office, etc. )

Kindergarten, School (Elementary Junior High, Senior High)

Shrine, temple, church, clinic

Bowling, Skating rink, Swimming pool, Golf driving range, baseball batting practice, etc.

Hospital, university D

Stores (mainly selling daily commodities), restaurants withh floor spacce of 150 D m2 max. on the first or second floor (excluding category *) Stores, restaurants withh floor spacce of 500 m2 max. on the first or second A B floor (excluding category *)

Stores, restaurants not specified above (excluding category *) A B

Offices, etc. not specified above. B

Hotels, inns

Karaoke boxes (excluding *) C

Theater, Movie theater (excluding *)

* Theater, Movie theater, stores, amusement facilities, and so on, with more than 10,000m2 of floor area

Bathhouses with private rooms

Independent garage with floor space of 3002 max. on the first or second floor

Warehouse of warehousing company, Independent grage of other types than specified above

Auto repair shop E E F G G

Factory with some possibiity of danger and environmental degradation

Factory with strong possibiity of danger and environmental degradation

Note: A: must not be built on the third floor or higher,. Must not exceed a floor area of D: Stores and restaurants must not be built 1,500m2. B: Must not exeed a follor area of 3,000m2 E: Floor area must not exeed 50m2.

C: Audience seating floor area must not exceed 200m2. F: Floor area must not exeed 150m2. G: Floor area must not exeed 300m2. Source: MLIT, Japan Figure 3.5.7 Example of Buildings allowed in each land use zone in Japan

3-22 3. Landuse and Zoning

Category of Land Use Zone Max. Floor-Area Ratio (%) Max. BCR (%) Categroy I Exclusively low-rise residential zone 50 60 80 100 150 200 30 40 50 60 Categroy II Exclusively low-rise residential zine 50 60 80 100 150 200 30 40 50 60 Categroy I Exclusively med/high rise-oriented residential zone 100 150 200 300 400 500 30 40 50 60 Categroy II Exclusively med/high rise-oriented residential zone 100 150 200 300 400 500 30 40 50 60 Categroy I residential zone 100 150 200 300 400 500 50 60 80 Categroy II residential zone 100 150 200 300 400 500 50 60 80 Quasi-residential zone 100 150 200 300 400 500 50 60 80 Neighborhood commercial zone 100 150 200 300 400 500 60 80 Commercial zone 200 300 400 500 600 700 800 900 1000 1100 1200 1300 80 Quasi-industrial zone 100 150 200 300 400 500 50 60 80 Industrial zone 100 150 200 300 400 50 60 Excusively industrial zone 100 150 200 300 400 30 40 50 60 * BCR: Building Coverage Ratio Figure 3.5.8 Example of BCR and FAR by Landuse zone in Japan

https://www.google.com/search?q=%E3%83%8B%E3%83%A5%E3%83%BC%E3%83%A8%E3%83%BC%E3%82%AFzoning+table&espv=2&biw=1024&bih=697&source=lnms&tbm=isc h&sa=X&ved=0ahUKEwji3vbOiLbNAhUBnJQKHQXVBqUQ_AUIBigB&dpr=1.25#imgdii=6WJuVYudCskHYM%3A%3B6WJuVYudCskHYM%3A%3BAZhnRjsxxpiadM%3A&imgrc=6WJuVYud CskHYM%3A Figure 3.5.9 Example of Zone Map of New York

Zoning District Overlay Zoning Planned Unit Development (PUD)

Figure 3.5.10 Example of Zoning district, Overlay Zoning, and PU, Cambridge, Massachusetts, USA

3-23 3. Landuse and Zoning

Use Group

Community Residential Use Gen. Manufacturing Zoning District Facility Use & Commercial Use Groups Group Service Use group Group

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Residential District

R1, R2 Single-famil detached R3A, R3X, R4A, Single- & two-family detached R5A Single- & two-family detached & R3-1, R4-1 semi-detached Single- & two-family detached & R4B semi-detached & attached R3-2, R4, R5B, detached & semi-detached & R6~R10 attached Commercial district

C1 Local retail

C2 Local service

C3 Water frront & ercreation

C4 Central commercial

C5 Central commercial (restricted)

C6 Central commercial (general)

C7 Commercial Amusement

C8 General service

Manufacturing district

M1 Light Manufacturing

M2 Medium manufacturing

M3 Heavy manufacturing

Use Group 1. Detached house 7. Maintenance, repair service 13. Open amusument facility 2. All types of houses 8. Local amusement service 14. Boat related facility 3. Local facility (Community facility) 9. business and other service 15. Large open amusement 4. Mainly Local facility (Community facility) l10. arge scale retail 16. Auto-related service, light manufacturing 5.Temporary Accommodation facility 11. Ordermade production 17. Manufacturing 6. Local retail, service 12. Large amusement facility 18. Heavy manufacturing Figure 3.5.11 Example of Zone Table of New York

3-24 3. Landuse and Zoning

Height of buildings is Construction of low buildings is not to be regulated permitted here.

Oak trees are to be protected. This is designated as a shopping The location and width of roads are mall, so a shop is to be created at decided through discussions. street level.

Construction of new buildings on a This is a residential district, so a site proposed for a road/park is to be factory should not be located avoided. here. Buildings should be set back from the road to create a wide pavement.

The ratio of green space to the building site is to be regulated.

A hedge should be The site should not be divided into pieces for created here small-scale developments. The layout of the instead of walls. Construction of high buildings should not be over the proposed buildings is not road. permitted.

Figure 3.5.12 Image of Regulation in District Plan, Japan

Vauban, Freiburg Detail of B-plan Kirchsteigfeld, Potsdam Extract of B-plan

http://www.rudi.net/books/15903

http://www.rudi.net/system/files/images/BB-high-res.jpg

Figure 3.5.13 Example of B-Plan Map, Germany

3-25 4. Housing Planning and Development

4. Housing Planning and Development

4.1 Rationale

Needless to say, housing is the basic need for all These plans will influence the housing market in the citizens, and the Government has to take care of both sides of supply and demand. The government people’s living conditions, although the housing needs to watch carefully the market situation all the units are provided through the market. However, time. This section discusses a general manner of the housing market is often not perfectly working planning of the housing sector in the urban planning because of speculation and distorted information. administration. The Governmental interventions, therefore, are Basic Policy: sometimes essential to be undertaken at rational Realization of Livable City for All Citizens ground. To Assure Stable Housing To Uplift Quality of As illustrated on Figure 4.1.1, the basic housing pol- Provision Living icy addresses to realize livable city for all citizens, which must be the urban planning policy as well. This basic policy consists of two objectives: one is to as- Governments’ Roles and Housing Market sure stable housing provision; and another is to uplift Responsibilities quality of people’s living conditions. As mentioned above, the housing market shall function largely to achieve these objectives, but the governments’ roles Comprehensive Housing and responsibilities are indispensable through Plans providing comprehensive housing plans. The plans need to present the guidelines for housing supplies Figure 4.1.1 Structure of Housing Policy Formulation in terms of both qualitative and quantitative targets of housing units to be supplied and special measures to enhance the demand side such as financing sub- sidies.

4-1 4. Housing Planning and Development

4.2 Key Topics

Three (3) topics related to housing planning are im- 2) Quantity Satisfaction: It is a planning target portant to be treated by urban planners (see Figure that all citizens are satisfied with their housing 4.2.1): units. The market can provide a variety of hous- ing units, responding to the customers’ afforda- bility, looking into the balance between supply and demand. However, because of the construc- tion booming and price-speculation, the market Quality Products easily becomes imperfect and distorted, thereby leading to an over-supply situation. The gov- ernment has to provide the guidelines for the demand side condition such as the number of For All housing units to be developed or constructed in the short- and medium-run. In particular, the Quantity governments have to take responsibility for Satisfaction housing provision for the low income group that cannot make access to commercial banks. So-called “social housing”

Figure 4.2.1 Three Main Topics for Housing Planning 3) Quality products: It is ideal that all citizens live at quality house and enjoy their livable condi- 1) For all: The urban planning must deal with the tions, but the reality is not the case. Quality policies and plans for all citizens, regardless of housing products should be encouraged in the the poor or the rich. This must be the substan- construction sector, providing tax and/or fi- tial aim. The housing market is often likely to nancing incentives for developers as well as provide salable housing units for the most de- construction material suppliers. The housing manding segment groups, not for the low in- quality for social housing is also an important come groups. Urban planning, therefore, take a topic in the urban planning administration. special attention to housing conditions for the poor.

4-2 4. Housing Planning and Development

4.3 Housing Issues and Policies

ing units for the low income group as a public 1) General Planning Process corporation, but its substantial financing func- The normal planning work starts with the current tion has not been performed. status analyses in the housing sector. The observa-  The Government efforts have been focused on tion should be made from different viewpoints, in- housing development (supply side), but still in- cluding effectiveness of the available legal and sufficient for housing finance and affordability of institutional systems. people (demand side) Based on such fact finding activities, several planning  The Government policy for “the 8% housing loan” issues need to be identified to address through the has been successfully undertaken, and benefited urban planning administration or by planning tools. many households to purchase their houses, but The planning issues identification process is the cru- not sustainable financially in the long-run, and cial milestone, because wrong issue-setting will lead the beneficiaries do not include the low income to wrong directions of policies/measures. group people who have no stable salary base. In respond to the issues, housing measures should  There are no institutional systems to provide be examined for both the supply side (the construc- with low-cost social houses for low income tion sector) and the demand side (households re- households. quiring houses).  A lack of effective guidelines for quality control A typical planning process is introduced as shown in for housing construction has made it difficult to Figure 4.3.1, which may be applicable to Ulaanbaatar implement the objectives of housing policies. City.  The real estate market is likely to be speculated due to susceptible material market. 1. Increasing demands for housing It should be noted how the housing market is work- Present 2. Shortage of Housing Stocks 3. Degraded Housing Quality and Environment ing, or what issues are vividly taking place in the Status 4. Insufficient Legal and Institutional Framework market. If price escalation is significantly occurring, for Housing its exact reasons should be explored, that is, is it 1. Sound-functionalization of housing market caused by demand-increasing, construction cost Planning 2. Improvement of ger-housing environment rising, or market speculation? Since the housing Issues 3. Improvement of decrepit/aged housing units market in UB City is comparatively small, even a tiny 4. Government Interventions for social housing factor may influence to the balance of the market to 1. Supply Side Measures: considerable extent. For a reference, Table 4.1  Incentives to encourage construction shows whether main construction materials can be  Provision of infrastructures procured at the domestic market or imported. Most Measures  Support to production of construction materials 2. Demand Side Measures: of valuable materials are still imported from Chi-  Subsidy provision for housing financing na/, thereby resulting in high construction cost  Special Support for Social Housing nature. Figure 4.3.1 Planning Process for Housing Sector

2) Observation of Present Status In Ulaanbaatar City, the followings are taking place:

 Steep price-rise in construction costs is taking place at the market.  Only high and middle income households can be accessible to commercial banks’ long-term housing loans or mortgage loans.  National Housing Financing Corporation (NOSK at present) was established for providing hous-

4-3 4. Housing Planning and Development

Table 4.3.1 Procurement of Construction Materials ventions are necessary to be addressed for pro- vision of social housing for low-income house- Construction materials holds. This is one of the significant urban

Wall materials 100% Domestic 100% Domestic planning mandates to achieve an equitable so-

Glass 100% Imported 100% Imported ciety. There are three (3) directions for inter- Window frame and 100% Domestic 100% Domestic ventions: i) one is to direct the housing market Roof materials 10% Domestic, 90% imported 10% Domestic, 90% imported to provide the low-cost housing and rental

Majority of fixtures imported; some housing units; ii) another is to provide finan- Water pipeline 30% produced by Chinese and produced by Korea/Chinese- Korean plants in Mongolia operated plants in Mongolia cial subsidies directly for the eligible house-

Paint 100% Imported 100% Imported hold; and iii) the other is to have public entities

Concrete and brick 100% Domestic 100% Domestic to provide public rental houses at affordable

Electric cable 100% Imported rents. Limited Domestic Production Precast concrete In the past, produced, but the plant closed at present 4) Historical Review of Past Housing Polices Source: ADB Project Team It is important to review the past housing polices and 3) Housing Planning Issues and Measures measures in terms of their relevance, appropriateness effectiveness and achievement level to the original As mentioned in Figure 4.3.1, the planning issues will targets. This process is indispensable to seek for the be summarized with the following four (4) in UB City: future. 1. Sound-functionalization of housing market: Figure 4.3.2 shows a summary of housing polices A sound-functioning market is hard to be cre- formulated by the national government and the UB ated even in large-mega cities. Governments city government from 2006. always need to watch and monitor the balance between the supply and the demand, and At the earlier stage, the government launched a price-changes at the real-estate assets. numerical target of housing constriction, or the “40,000 Housing Units Program”. To achieve the taret, 2. Improvement of Ger-housing environment: this program composed of five (5) strategies: (1) New The Urban Redevelopment Law, which was Town Development; (2) Densification of Urban Cen- newly enacted in 2105, addresses social norms ter; (3) Ger area improvement; (4) Housing market and manners of the process for Ger area de- financing; and (5) Construction materials production. velopment in terms of Ger-to-apartment pro- Since then, the housing policies have always been jects and land readjustment projects. The law focusing on three targets projects: (1) development still has room to be improved to meet the reality of new towns; (2) improvement of ger-areas; and (3) on the practical ground. This improving process redevelopment of the central areas. These direc- shall be facilitated based on a number of pilot tions for the policy building seem rational and ap- projects which shall be conducted in compliance propriate, looking into the reality of UB City. The with the law. big issue is “how to do?” 3. Improvement of decrepit housing units: Old apartment buildings have been waiting for be- As a reference, the historical process of housing pol- ing rebuilt or redeveloped, because of dangers icies in Japan is introduced as shown in Figure 4.3.3. of destruction. The Housing Law and the Urban For more than one decade after the WW-II, the Jap- Redevelopment Law address a legal system and anese government undertook strong interventions manners of the implementation to respond to to overcome an extremely serious shortage in hous- this requirement. It is legislatively guaranteed ing stocks and restoration of the damaged urban that the apartment owner can keep his/her right housing areas. The measures are strategically pre- to freely obtain at least the same floor area as vailed, say, promotion of mortgage loans and rental present even after the new apartment is given. houses by the public for the housing supply; and In fact, this condition inherently makes the old facilitation of land readjustment projects for rehabil- apartment re-construction project difficult fi- itation and restoration of deteriorated urban housing nancially. areas. 4. Government interventions for social housing: Such a government-driven police continuously lasted As described earlier, strong government inter- up to the beginning of the 1970s to functionalize the

4-4 4. Housing Planning and Development housing market and the financial mechanism, but policy focus also changed from the quantitative shifted substantially from the public to the private supply side management to the quality housing ser- sector based housing provision in 1970. The major vices by the private sector.

2002 UBMP2020 (82% of HH live in apartments with engineering infrastructure) UBMP2020 (82% of HH live in apartments with engineering infrastructure)

2006 40,00040,000 Housing Housing Units Units Program Program

Strategy 1: New Strategy 2: Strategy 3: Ger Strategy 4: Strategy 5: Town Densification of area housing market construction development urban center improvement and finance material and capacity dev’t

2008 Detailed Master Plans by UB City Resolutions for mitigating air Detailed Master Plans by UB City pollution from Ger area (No. 27, 4 New Towns 1 central area 7 Ger areas No. 46, No. 218)

ProgramProgram for for Developing Developing UB UB Ger Ger areas areas into into apartment apartment residential residential area area (draft) (draft) Phase 1 Phase 2 Phase 3 (2016- (2008-2012) (2013-2015) 2020) 3 areas, 5 areas, 14 areas, 24,500 housing units, 19,900 housing units, 89,400 populations 103,000 populations (not planned)

Figure 4.3.2 History of Mongolian Housing Policies, Plans and Programs

Million housing unit 35 10 Million Units 30

25 7 Million Units Gov’t Guidelines: • Promotion of Housing Ownership; 20 • Commercial Housing Development; 4 Million Units • Commercial Mortgage Financing, 15 etc. Strong Gov’t Interventions: • Public Mortgage Finance; • Local Affordable Housing 10 Provision; Strong Gov’t Interventions: • New Town Developments, etc. • Land Readjustment for War- Provision 5 of damaged Urban Areas; temporary • Public Mortgage Finance; housing • Public Rental housing, etc.

1945 1948 1950 1958 1960 1968 1970 1978 1980 WW II ended Figure 4.3.3 History of Japanese Housing Policies after WW-II （A Reference）

4-5 4. Housing Planning and Development

5) Planning of Ger-area Development bilities to the centralized engineering utility networks and housing types, that is, Central ger-area, Mid- Tremendous efforts have been made for planning of dle-ger area and Outskirt ger-areas, as shown in ger-area development by the UB City government Figure 4.3.4. The three models are designated and since 2002 when the urbanization process signifi- distributed with implication of development phasing cantly started in UB. Urban planners are required to as shown in Figure 4.3.5. hold some physical and spatial images for the de- velopment need to be delineated. This planning direction is assessed to be appropriate. The remaining issue is “how to realize it?” UB City defines three physical models of Ger-areas development depending on their locations, accessi-

Central ger area Middle ger area Outskirt ger area

High and Medium and low Improved ger medium rise rise residential housing district residential district district

Source: UB City Figure 4.3.4 Physical Images of Three Types of Ger-area Development

Source: UB City

Figure 4.3.5 Development Phases of Ger-area Development

4-6 4. Housing Planning and Development

4.4 Housing Demand Forecast

Thousand 1) Housing Demand Structure Units 300 As discussed in the preceding section, the housing market should be carefully watched and monitored 250 Public House from the viewpoint of the balance between supply 200 Detached and demand. In addition, the urban planning ad- 150 Apartment ministration should foresee the future market situa- 100 tion to undertake appropriate housing polices and Ger measures to be geared with financial needs. 50

0 To this end, the housing demand projection should 2000 2010 be made under a standard methodology, as shown in Figure 4.4.1. Demands for housing stocks are de- Source: UB City rived from increased number of households which Figure 4.4.2 Changes in Housing Sock by Type in UB accrues from not only immigrated but also divided City households due to downward family size.

Meanwhile, the demand of new housing construction 푡 is not equivalent to the demand for housing stocks. A future pattern of housing stocks (퐻푖 ) is projected, New housing units to be constructed are calculated as a function of four (4) parameters: to add the numbers of housing units to be con- 푡 푡 푡 푡 푡 퐻푖 =f (ℎ , 훼푖 , 훽푗푖, 푝푖 ) structed or replaced through three projects: i) old apartment reconstruction; ii) ger-to-apartment pro- Where, jects; and iii) individual housing reconstruction. 푡 퐻푖 : Housing stock of i-type in year-t The demand for housing construction is usually ℎ푡 : Households in year-t much greater than that derived from increased 푡 훼푖 : People’s preference to i-type in year-t households. 푡 훽푗푖: Replacement from j- type to i-type in year-t 1. Housing demand for increasing 푡 푝푖 : Policy factor on i-type housing in year-t households by:

 Immigrated households  Division of households due to the It is noted that 푝푖 is assumed to be an intentional downward family size Total housing construction factor on i-type of housing like a policy, for instance, 2. Housing demand for Reconstruction demands and/or Replacement due to: that the number of “ger” shall be decreased at 10%  Needs of old apartment reconstruction per year and the number of apartment shall be in-  Requirement of “Ger-to-Apartment” creased by 10% per year.  Desire of new housing units Based on the equation above, patterns of housing stocks by type in UB City in 2020 and 2030 were Figure 4.4.1 Elements of Housing Demand Forecast- ing projected as shown in Figures 4.4.3 and 4.4.4. In this projection, a definite policy factor is considered, 2) Projection of Future Housing Stocks that is, ger-housing stocks shall be mitigated by 2030. Figure 4.4.2 shows the past changes of housing stocks by type (detached, apartment and ger) in UB City during the period between 2000 and 2010. Interestingly, each type of housing stock was increas- ing equally, although the number of “ger” is expected to decrease due to the government’s efforts.

4-7 4. Housing Planning and Development

Forecast of Housing Stocks by Type in 2020 & 2030 Change in Housing Units by Type

200,000 450,000 4,540 27,190 Homeless 180,000 400,000 Ger 160,000 Simple house w/o infra 350,000 147,800 29,330 Detached with Infra 140,000

300,000 47,730 Apartment (High-rise) 120,000 Apartment (Mid-rise) Apartment (Mid-rise) Apartment (High-rise) 250,000 100,000 86,720 Detached with Infra 86,040 80,000 200,000 56,100 Simple house w/o infra 60,000 Ger 150,000 57,250 74,280 40,000 100,000 1,960 20,000 25,830 178,670 50,000 127,190 0 60,260 2007 2020 2030 0 2007 2020 2030 Source: JICA-UBMPS 2009

Figure 4.4.4 Changes in Housing Stocks in Future Source: JICA-UBMPS 2009

Figure 4.4.3 Projection of Housing Stocks in Future,

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4.5 Comprehensive Housing Development Measures

As mentioned earlier, the housing policy should be income groups on the vertical axis. Available and/or comprehensive, taking into account both the supply considerable housing measures are located in this side and the demand side. The supply side includes coordinate. The measures enclosed with dotted lines activities by the construction sector, developers or indicate newly proposed ones and the measures with providers, while the demand side includes those who solid lines are currently existing or available ones. intend to purchase some housing units, or looking Practical measures particularly for the low and mid- for rental houses. Another attention should be dle-low income households are proposed in this placed on difference in affordability among income matrix. groups. It should be noted that the high- to mid- Ger area residents, who may belong to the low- and dle-income households can normally make access to the middle-low income group, must be eligible to commercial bank loans or some institutional privi- get access to a micro-finance scheme for the im- leges provided by the public sector, while the low provement of their living environment, and govern- income households have no access to them, because ment’s subsidies to acquire new housing units. For of no stable income sources for loan-repayment. the supply side, special financing supports with low Figure 4.5.1 shows a housing policy matrix which is interest rate should be provided for developers who proposed by the Project Team in collaboration with construct low-cost housing for the poor. This issue the JICA MUGCUP Team. This matrix is a coordinate (social housing issue) will be elaborated in the fol- with the supply and demand sides (or different play- lowing section. ers) on the horizontal axis and three (3) levels of

Source: JICA MUGCUP

Figure 4.5.1 Housing Policy Matrix (proposed)

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4.6 Social Housing and Financing

1) Target Group Percentile 100%

Social housing is an umbrella term, referring to 90% rental and/or low-cost housing which may be pro- 80% vided and managed by the state, by non-profit or- 70% ganizations, or by a combination of the two, usually with the aim of providing affordable housing for the 60% low income households. Social housing can also be 50% seen as a potential remedy to housing inequality. 40% Although the common goal of public housing is to 30% provide affordable housing, the details, terminology, definitions of poverty and other criteria for allocation 20% 700,000 MNT vary within different contexts. 10%

0% Target groups should be defined for UB City, know- 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 ing the income distribution pattern as shown in Table MNT/month 4.2. Under division of five (5) groups, the very low Source: Delineated from Table 4.2 income households, falling in the 10th percentile, get Figure 4.6.1 HH Income Percentile Curve for UB City less than 470,000 MNT/month, while the moderate th th income households, belonging to the 40 ~70 per- 2) Affordable Housing (Simulation Model) centile zone, get 700,000~1,100,000 MNT/month. A model calculation is made to examine what house Based on the percentile curve is illustrated on Figure a targeted low income household can purchase at 4.6.1, the target group is defined to be households in th the housing market. It is assumed that the household 30 percentile from the bottom, and their incomes master can access to a mortgage loan with special are less than 600,000~700,000 MNT/month. If the th low interest rate of 8% p.a. The following prerequi- target group is assumed to be less than 20 percen- sites for this simulation analysis are assumed: tile, the income will be around 500,000~550,000 MNT/month. 1. Model HH income: 700,000 MNT/month 2 Table 4.6.1 Household Income Distribution in UB City 2. Standard housing floor area: 35m with 2 bed rooms Percentile HH Income Range 3. Construction cost: 350 ~ 550 USD/m2 High (90th % ~) 2,800,000 ~

Middle (70th ~90th %) 1,100,000 ~ 2,800,000 4. Market sales price: 1.8 times of the con- struction cost, or 630~990 USD/m2 Moderate (40th ~70th %) 700,000 ~ 1,100,000

Low (10th ~40th %) 470,000 ~ 700,000 5. Assumed housing loan conditions: Very Low (~ 10th %) ~ 470,000  Maximum LTV (loan-to-value): 70% Source: Quoted from “Affordable Housing Strategy for UB,” 2012  Down-payment or cash-payment: 30% Household Socioeconomic Survey, Adjusted 20% upwards for  Max. repayment term: 20 years underreporting,  Interest rates: 8% p.a. A question is what housing units this model house- hold can purchase under these conditions? An im- portant criterion for the decision-making is the acceptable DTI (debt-to-income) ratio which must be less than 45%, otherwise the household could not manage its living due to too heavy burden for the repayment of housing loan.

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Table 4.3 shows a result of the simulation analysis. As houses at affordable prices of the target group, in- far as this household keeps such a criterion of DTI at jecting government subsidies, cutting speculated less than 45%, it can purchase housing units of market prices, promoting value-engineering to save Model-A and Model-B. the construction costs, and rationalizing profits and management costs. The sales price of Model-A is about 44 million MNT (about 22,000 USD), while that of Model-B, about Meanwhile, another subsidy is provided on a special 50.4 million MNT (25,200 USD). Converting to the loan scheme, just same as “8% housing loan policy” unit sales price, Model-A is 1.26 million MNT (630 which has currently been prevailed in Mongolia. As USD/m2), while Model-B, 1.44 million MNT (720 examined above, the loan interest rate significantly USD/m2). Unfortunately, such a low price apart- influence the repayment burden of borrowers. The ment will be difficult to find at the current housing difference between the subsidized rate and the market. However, it is the simulation result that the prime rate or commercial banking rates should be affordable housing unit price for a household with fulfilled with the government budget, which may the income level of 700,000 MNT/month is less than impose a great financial burden on the government 720 USD/m2. sector.

Speculative The interest rate is a significantly influential parame- Price

Speculative Market ter. Assuming the higher interest rate of 10% p.a., Profit Distortion this household can purchase only Model-A. Given a Market Price Profit - Technology Speculative Profit Cost - Subsidy 12% p.a. loan, it cannot purchase any housing model Increase Cost Administrative at the market. Cutting Costs

Affordable Price Table 4.6.2 Affordability Check of Low Income Cost Cost for Low Income HH Cost Cost Household to Purchase a Housing Unit

Financial Conditions Normal Speculative Social Housing Corporation Interest Rate 8% Housing Unit 35 Market Market Model Repay't Term (year) 20 Area (m2) Armotization Rate 0.00836 Source: JICA UBMPS (2009) Exchange Rate (MNT/USD) 2,000 Figure 4.6.2 Subsidy for Housing Cost Reduction Model-A Model-B Model-C Model-D Sales Price (MNT) 44,100,000 50,400,000 56,700,000 63,000,000 Construction Unit Cost (MNT/m2) 700,000 800,000 900,000 1,000,000

Construction Unit Cost (USD/m2) 350 400 450 500 Subsidy Interest Interest Sales Unit Price (MNT/m2) 1,260,000 1,440,000 1,620,000 1,800,000 Payment Interest Payment Market Price Payment Affordable Loan Repayment Price for Low Profit Affordable Income HH Loan Amount (MNT) 70% 30,870,000 35,280,000 39,690,000 44,100,000 Price for Low Income HH Monthly Repayment (MNT) 258,200 295,100 332,000 368,900 Housing Principal Principal Principal Loan Payment Payment Payment

DTI (Debt-to-Income) Ratio: Cost HH Monthly Incom (MNT) = 700,000 37% 42% 47% 53% Own Fund Own Fund Own Fund Own Fund Subsidy Only these cases are affordable Purchase Finance Repayment Interest Down Price (Market Level) Subsidy Payment Model Subsidy Model 3) Subsidy Schemes for Low Income Group Source: JICA UBMPS (2009) Subsidiary schemes for low-income group are avail- Figure 4.6.3 Financial Subsidy on Interest Rate able in any country. In general, there are two alter- These two options were historically adopted in Japan, native measures to be provided by the government as shown in Figure 4.6.4. For the sake of housing sector, that is, one is subsidy on the housing cost development, the Japanese government established reduction, and another is subsidy on the interest rate two public entities, that is, one is the Public Housing for the mortgage loan. Corporation responsible for the housing supply at Figure. 4.6.2 indicates a mechanism of the cost re- rational prices, and anther is the Housing Financing duction subsidy through interventions by some pub- Corporation responsible for provision of compara- lic entity, temporally called “Social Housing tively lower interest mortgage loans than that of- Corporation (SHC)”. The SHC shall provide low cost fered by commercial banks.

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well as urban redevelopment projects. Moreover, the 4) Rental Houses Provision Housing Financing Corporation was also liquidated Another important measure for the low income and its roles have been transferred to commercial group is to facilitate development of rental houses. banks. As Japanese model shows, the most popular policy is provision of rental housing units, under so-called “Social Housing Program”. This program was exe- Supply side Demand side cuted by both the Public Housing Corporation and • Provision of affordable • Low interest & long term local governments. In comparison, the rent of the Middle housing by public housing mortgage loan by Housing income HH corporation (local financing corporation local government-initiated rental houses is compara- government-owned) • Provision of provident saving • Provision of affordable scheme with special mortgage tively lower than that of the Public Housing Corpora- housing and rental housing by loan by Central government Lower the Japan housing tion. This means that the local governments target at middle • Housing allowance from corporation (state-owned) company (loan interest, rent) poorer households. income HH

Nowadays, the Public Housing Corporation has been Low income • Provision of rental housing by • Provision of rent-subsidy by HH (under Local government Local government reorganized to become the Urban Renaissance 25 %) Agency, which has no longer responsibility to pro- vide housing units, but manage only rental houses as Figure 4.6.4 Overall Housing Policies in Japan

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