New Geographies of Residential Capitalism: Financialization of the Turkish Housing Market Since the Early 2000s

Abstract

The post-2001 financial crisis era in Turkey gave rise to twin booms in housing construction and credit markets, both of which suffered from the subsequent debt crisis. The financial transformation of the economy in conjunction with state-led urban legislation reform had significant effects on the housing market in terms of commodification of housing, countrywide construction activities and substantial increases in household debt and construction company loans. The changing role and function of the state as a direct provider of housing can be regarded as actually existing neoliberalism providing favourable conditions for financialization, as it ushered in the commodification of housing. The Turkish government, together with the government-backed housing agency, metropolitan municipalities and publicly owned real-estate investment company, has been active in nationwide housing construction and urban regeneration projects. This article argues that there is a lack of synchrony between the commodification of housing and the financialization of the household sector owing to the institutional setting of the mortgage system and structural macroeconomic problems. Rather, housing commodification has been accompanied by the financialization of the corporate sector through a steep rise in the external debt burden of construction companies.

Measuring homeownership affordability in emergent market context: an exploratory analysis for Turkey

“…In this respect, the root of the recent boom in Turkish housing market went to the latest period. Erol (2019) discusses that the state provided favourable conditions for financialisation as it paved the way for the commodification of urban land and housing in Turkey. This rapid commodification of housing resulted in countrywide speculative construction activities and a drastic rise in house prices in the past decade in Turkey.…”

Behind the Scaffolding: Manipulations of Time, Delays, and Power in Tarlabaşı, Istanbul

“…The economic crisis in 2001 was a turning point in Turkish politics, marking the AKP’s rise to power. The AKP swiftly passed a series of laws that would render valuable urban land around the country susceptible to development and profit in an attempt to mitigate the effects of the crisis (Erol 2019; Ünsal & Kuyucu 2010). Chief among these was Law No.…”

“…5366, passed in 2005, which endowed district municipalities (such as Beyoğlu, in which the Tarlabaşı neighborhood is located) with the authority to open “derelict” and “obsolescent” areas to development, regardless of occupancy status (Kuyucu & Ünsal 2010). Many have argued that this law in actuality intended to expropriate urban land of high real estate value (such as Tarlabaşı, with close proximity to Istiklal Street, known as an entertainment hub of Istanbul) to generate profits for companies and political actors alike (Erol 2019; Sakızlıoğlu & Uitermark 2014).…”

Gendered dispossession and women’s changing poverty by slum/squatter redevelopment projects: A case study from Turkey

“…It was estimated that over 50% of the population were living in squatter settlements in metropolitan cities of Turkey (Istanbul, Ankara, and Izmir) at the beginning of the new millennium (Keleş, 2002). As a part of liberalization in Turkey since the early 2000s, the financial transformation of the economy significantly changed the housing market with the increased involvement of the state in urban development projects and the commodification of housing (Erol, 2019). A large number of inner-city squatter settlements that have been part and parcel of cities' landscapes up until the 2000s have been transformed into market-driven profitable estates and the property right holders of squatter settlements have been resettled into mass-housing estates located, in general, in peripheral areas.…”