Financialization through regulation: affordable housing production in post-crisis Turkey

Abstract Following Turkey’s 2018 currency crisis, the government introduced four key housing re-regulations which reduced mortgage interest rates, investment-based citizenship incentives, rent increase limitations, and monetary easing to stimulate economic recovery. This study examines how state-led financialization of housing disproportionately favours middle- and high-income groups while limiting access for low-income households. Focusing on Istanbul, the analysis combines policy review with secondary data from 2007 to 2025 and reveals that the state housing agency TOKİ increasingly prioritised middle-income housing production over housing for low-income in Istanbul. Homeownership among the lowest-income groups fell by 25% from 2007 to 2024. Although originally designed to support low-income groups, TOKİ’s housing output for very low-income groups declined after 2019. Furthermore, foreign investment surged due to relaxed citizenship laws, rose housing prices, while 750,000 units remained vacant as landlords anticipated future capital gains. This paper argues that Turkey’s post‑crisis housing strategy has deepened state‑led financialization reinforcing inequality and weakening the social function of housing for low‑income households .