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Istanbul's Suburban Dream Is Fueled by Debt

Economic growth and the rise of consumer borrowing have resulted in booming suburbs on the periphery of the city.

A residential tower being built behind the Mimar Sinan mosque in Ataşehir in 2012. (Murad Sezer / Reuters)

Forty-five years ago, a person could describe Istanbul, looking at its then-suburbs, as a place of gecekondu (informal or squatter) houses. The goal of owning a house was simply to have shelter. Since then, the city and its population have grown exponentially, from less than 1 million in 1950 to about 15 million now. Very soon, Istanbul will become Europe’s most populous metropolitan area, overtaking London and Moscow. Much of that growth has taken place in suburbs on both sides of the Bosphorus.

A new suburbanism began around 2000 and accelerated amid strong economic growth (about 5 percent a year), rising living standards, and the policies of President Recep Tayyip Erdoğan that funneled investment into construction and real estate. Meanwhile, consumer borrowing has exploded. “Today in Turkey, there is a household loaning culture unseen in the period before 2003,” the economist Mustafa Sönmez has written.

This has changed the perception of housing in Istanbul. Now a house is the most important commodity, and the new suburbs are the center of this commodification. The cause and effect of this new suburbanism is the competition of the middle classes to own a house (or multiple houses) as the path to financial security.

My doctoral research consists of investigating the lifestyles of Istanbul’s suburbanites as urban transformation has coincided with the rise of indebtedness and social polarization. They live in suburbs like Kemerburgaz-Göktürk, which has gated communities of manor-style houses as well as luxury condos; and Ataşehir and Bahçeşehir, where many families live in high-rise condo buildings.

Metropolitan Istanbul. (Maximilian Dörrbecker / Wikimedia Commons)

One of my interviewees, a high-ranking construction manager, told me: “It is all about a show of power relations. People are in debt, but what they show to other people is a fake prosperity. Social media nowadays in Istanbul is working as a mask to hide the indebtedness of the new middle classes.”

That is an incredible statement, explaining the current metamorphosis of life in Istanbul much better than any academic work could. Personally, I had never thought in this way, and it prompted new questions for me about the transformation of Istanbul’s periphery.

The agglomeration of gated communities in Bahçeşehir, on the European side of Istanbul. (Murat Ucoglu)

As part of my research, I am investigating two groups of people in the new middle classes of Istanbul. The first group consists of people able to network with the elites of the country. They can play the game of property speculation because they have either a high managerial position or some inherited wealth.

They usually own one house to live in and aspire to buy more and sell them at a profit, since real-estate prices in Istanbul have been increasing by about 20 percent a year (thanks to the rapid commodification of housing and the attraction of capital from the Persian Gulf).

The second group of people are those who are well-educated and work in the corporate sector, usually young professionals or couples hoping to buy a house as soon as possible.

Both of the groups rely on credit in the form of mortgages. The first group is using credit to increase its investment capacity, whereas the latter is using it to buy a dwelling. But the people in the second group may turn to investment once they’ve established a level of financial security.

Indebtedness has brought several effects that are new in Turkish society: a growing interest in investment lending; an increase in risk-taking; and the appearance of gated communities, where people can live in a secured environment.

However, the major effect of indebtedness may be on everyday life.

The manager I interviewed, who is planning to move to a suburb soon himself, said: “Usually people in those new suburban projects buy houses by mortgage credit. They basically work in the financial or marketing industries, and they could be identified as the new middle classes of Istanbul. Their life consists of paying their mortgage debts; that is why they usually stay at home nights and during the weekend. If they need to go out, they simply go to the closest shopping mall or they come together at friends’ houses.”

The new suburbanites are anxious for the maintenance of political stability, because an economic crisis could cause them to lose their jobs and not be able to pay off their debts. Because a home in a suburb requires a car or sometimes two, they will likely need credit for that purchase, as well.

New suburban life in Istanbul means being indebted, and this situation leads to the creation of new debts, in accordance with lifestyle expectations. Other interviews I’ve conducted bolster this conclusion. In the near future, the lifestyle of Istanbul’s suburban residents will become a major factor in Turkish society, because the commodification of housing is driving the social and economic forms of everyday life.

I would like to thank to my colleague Erdem Erok for helping me prepare this article.

About the Author

  • Murat Ucoglu
    Murat Üçoğlu is a doctoral candidate and Trillium Scholar in the Faculty of Environmental Studies at York University in Toronto. His research focuses on the housing market and suburban expansion in Istanbul and urbanization in Turkey.