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Urban Planning and the Development of Tehran

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Urban Planning and the Development of Tehran MUNICIPAL FUNDING MECHANISM AND DEVELOPMENT PROCESS A CASE STUDY OF TEHRAN BY KATAYOUN KARAMPOUR THE BARTLETT SCHOOL OF PLANNING UNIVERSITY COLLEGE LONDON Thesis submitted in fulfilment of the requirements for the degree of Doctor of Philosophy (PhD) from University College London. 2018 DECLARATION I, Katayoun Karampour, confirm that the work presented in this thesis is my own. Where information has been derived from other sources, I confirm that this has been indicated in the thesis. Signature 2 ABSTRACT In the late 1980s, Tehran municipality became financially independent from central government. As a result, the municipality utilised innovative tools to finance the city, such as granting excess construction density to developers, which enabled them to construct taller buildings in exchange for a fee. This financing tool has generated a significant amount of money for the municipality and boosted the housing construction sector but it was the first step towards relaxing planning regulations and giving power to developers to pursue their agendas. The aim of this research is to investigate the impacts of municipal fiscal decentralisation on the development process and planning system of Tehran. The general orientation of this research is qualitative strategy. Primary data was collected by conducting 47 semi-structured interviews with housing developers and planners within both the public and private sectors in Tehran. In order to understand the interest and strategies of housing developers, interviews were conducted with developers working as individual developers or as construction companies. To collect data on various aspects of planning and financing the city, interviews were carried out with key informants who are, or used to be, members or officers of relevant departments in the government or other institutions. By careful analysis of the collected data on the behind the scenes of development and planning process in Tehran, this study argues that the financial dependence of Tehran Municipality on incomes generated from construction density charges, payable by housing construction developers, has resulted in the occurrence of a certain type of market-led growth in specific areas of the city. Although attempts have been made to harness this market-led growth by introducing a new plan for the city this has led to massive alterations and interventions intended to secure the benefit of developers and the municipality’s income. Without providing an alternative source of income for the Tehran Municipality it is unlikely to have much success in planning for Tehran. 3 IMPACT STATEMENT By using empirical evidence from Tehran, this thesis has looked at how the excess construction density charge, which is a revenue-raising tool used by the Tehran Municipality, has influenced the urban planning system of Tehran through its effects on the development process and its impact on the development of the city. Findings of this research inform the institutions currently involved in the planning policy and practice of Tehran. More specifically, the findings of this research could impact the performance and strategies of the following organisations: • Deputy of Urban Development and Architecture of Ministry of Roads and Urban Development • Urban Planning and Architecture High Council • Islamic City Council of Tehran • Architecture and Urbanism Department of Tehran Municipality • Tehran Urban Planning and Research Centre of Tehran Municipality It is intended to translate the analysis and findings of this research to Farsi in order to disseminate those finding in Iran. Dissemination will be done through publishing in Iranian academic journals as well as sending a summary of the findings and recommendations to the mentioned institutions. It is also intended to publish the findings of this thesis in English in international journals which address urban planning and development process. 4 TABLE OF CONTENTS Abstract 3 Impact statement 4 List of tables 13 List of figures 15 Acknowledgements 18 Abbreviations used in this thesis 19 CHAPTER 1 – INTRODUCTION 20 1-1 Research context 21 1-2 Research questions and hypotheses 24 1-3 The structure of the thesis 26 1-4 Protocols 29 1-4-1 Translations 29 1-4-2 Date conversion 30 CHAPTER 2 – A REVIEW OF LITERATURE 31 2-1 Introduction 32 2-2 The Neoliberalism and decentralisation process 32 2-2-1 Neoliberal turn 33 2-2-2 The decentralisation programme 34 2-2-3 The benefits and costs of fiscal decentralisation 36 2-2-4 The design of fiscal decentralisation 38 2-3 Funding municipal expenditure 39 2-3-1 Operating and capital budgets 39 5 2-3-2 Classic financing tools 40 2-3-2-1 Intergovernmental transfers 41 2-3-2-2 Property taxes 41 2-3-2-3 User fees 42 2-3-3 Alternative financing tools 42 2-3-3-1 Development charges 43 2-3-3-2 Value capture taxes 45 2-3-3-3 Relaxing regulation taxes 46 2-3-4 Financing tools affecting urban planning 46 2-4 Urban planning, market forces and the development process 48 2-4-1 The development process 48 2-4-1-1 Development process models 49 2-4-1-2 Development agents: developers and landowners 53 2-4-2 Urban planning in a market economy 55 2-4-2-1 The evolution of urban planning 56 2-4-2-2 Symbiotic urban planning 57 2-4-2-3 Neoliberal planning implications 62 2-5 Conclusions 63 CHAPTER 3 – RESEARCH METHODOLOGY 69 3-1 Introduction 70 3-2 Conceptual basis 70 3-3 Research design 71 3-3-1 Research questions 72 6 3-3-2 Hypotheses 73 3-3-3 Strategy of research 74 3-4 Data collection 76 3-4-1 Data sources 76 3-4-1-1 Primary data collection 77 3-4-1-2 Secondary data collection 81 3-4-2 The politics of data collection 83 3-4-2-1 Power hierarchy 83 3-4-2-2 Micro geographies 85 3-5 Data analysis strategy 86 3-6 Conclusions 88 CHAPTER 4 – URBAN PLANNING AND THE DEVELOMENT OF TEHRAN 91 4-1 Introduction 92 4-2 Portrait of Tehran 92 4-2-1 The formation of a metropolis 92 4-2-2 Spatial structure 93 4-3 The governance of Tehran 97 4-3-1 Governmental institutions 97 4-3-2 The Tehran Municipality 100 4-3-3 Islamic City Council of Tehran 101 4-3-4 The Integrated Urban Management Act 102 4-4 Plans for Tehran 103 4-4-1 Before the modern planning system 103 7 4-4-2 Paving the way: the road widening act and other acts 106 4-4-3 The Tehran Comprehensive Plan 107 4-4-4 ATEC Comprehensive Plan 109 4-4-5 Tehran 80 plan 111 4-4-6 Tehran Structural-Strategic (Comprehensive) Plan 112 4-5 The Tehran Municipality budget and construction density charge 116 4-5-1 Financial independence of municipalities 116 4-5-2 The transformation of a planning tool into a financing tool 118 4-5-3 Attempts to regulate selling construction density 119 4-5-3-1 Commission No. 5 directives 120 4-5-3-2 The Urban Planning and Architecture High Council regulation 121 4-5-4 Dispute over construction density 122 4-6 The housing construction industry 123 4-6-1 Housing developers 124 4-6-2 Investment in housing development 126 4-7 Conclusions 127 CHAPTER 5 – THE DIVIDED CITY 130 5-1 Introduction 131 5-2 Dividing the city 131 5-2-1 Methodology of dividing the city 132 5-2-2 Comparing the regions 133 5-2-2-1 The number of construction permits 133 8 5-2-2-2 Floor areas of permits 135 5-2-2-3 Population growth 136 5-2-2-4 Housing and land price 138 5-2-2-5 Commission No. 5 (CN5) decisions 140 5-3 Selected regions 141 5-3-1 Introducing the five regions 142 5-3-2 Land use 145 5-3-3 Population 147 5-3-4 Property market 152 5-3-5 Construction activities and construction density 164 5-4 Conclusions 175 CHAPTER 6 – MUNICIPALITY FINANCING MECHANISM AND HOUSING DEVELOPERS 177 6-1 Introduction 178 6-2 Tehran Municipality’s finance 178 6-2-1 Tehran municipality’s budget 178 6-2-1-1 Self-sufficiency 178 6-2-1-2 Sources of income 179 6-2-1-3 The amount of the municipal budget 182 6-2-2 The construction density charge 183 6-2-2-1 The importance of the construction density charge for the municipality 183 6-2-2-2 The roots of the construction density charge 184 9 6-2-2-3 Controlling the construction density 185 6-3 Housing developers 189 6-3-1 The characteristics of developers 190 6-3-1-1 Who are the housing developers? 190 6-3-1-2 The developers’ background 193 6-3-1-3 The length of time in the industry 195 6-3-1-4 How does a developer work? 195 6-3-2 The developers’ decisions 198 6-3-2-1 Location 198 6-3-2-2 Moving or staying in a region 202 6-3-2-3 Deciding when to build 204 6-3-2-4 What to build 206 6-3-2-5 Extra density and the developers’ decisions 209 6-4 Dynamics between the Tehran Municipality and housing developers 213 6-4-1 The financial need of the municipality 213 6-4-2 The power of developers 216 6-5 Conclusions 220 CHAPTER 7 – PLANNING AND UNPLANNED DEVELOPMENT IN TEHRAN 223 7-1 Introduction 224 7-2 Tehran Plan 224 7-2-1 Occidental inspirations 224 7-2-2 The process of preparation and approval 226 7-2-2-1 The first stage: 1:10,000 plan 226 10 7-2-2-2 The second stage: 1:2,000 District Plans 228 7-2-2-3 The third stage: updating 232 7-2-3 The plan and the construction density 235 7-2-3-1 Construction density in the plan 235 7-2-3-2 Success in controlling construction density? 237 7-3 Dynamics between the Tehran Municipality and the housing developers which influence the plan 240 7-3-1 The plan disconnected with reality 241 7-3-2 The Tehran Municipality preparing 1:2000 plan 242 7-3-3 Time Gap 243 7-3-4 Amendments 246 7-3-5 The Garden-Tower Directive 248 7-4 The development pattern 251 7-4-1 Spontaneous development 251 7-4-2 The location of spontaneous development 253 7-4-3 Spatial Manifestations 256 7-5 Conclusions 259 CHAPTER 8 – CONCLUSIONS
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