Alternative strategies for urban redevelopment: A case study in a squatter housing neighborhood of Ankara

• Urban redevelopment is the policy focus for informal housing in Turkey since 1980s.
• However, implications were disinvestment and socio-economic problems.
• This paper investigates the role of changes in ‘institutions’ for better results.
• House-builders and households were interviewed and permit records were collected.
• The results indicate authorities can create desirable results for neighborhoods.

Since the 1980s, the redevelopment of squatter housing settlements has been a primary policy focus of the local and central authorities in Turkey. Their strategies have adopted two different models: one approach was not effective at generating redevelopment activity and produced low quality living environments, and the other approach resulted in dislocation and gentrification. The literature stresses three issues. First, redevelopment sites are areas where market forces failed; thus, they are perceived as high risk, low-demand, and low-return investments with high transaction costs. Second, institutions that lower transaction costs boost market forces and increase economic performance in property development. Third, local authorities remain active in urban redevelopment; despite having no direct tools for local economic development, they do have tools for urban development. This study reformulates the basic transaction cost thesis and hypothesizes that local authorities can boost urban redevelopment by making changes to institutions or ‘the rules of the game’ by increasing information flow, positive externalities and perceived returns and by decreasing transaction costs, negative externalities and risks, all of which motivate land owners and house-builders. To test this hypothesis, I have conducted household surveys and semi-structured interviews with house-builders in a squatter housing neighborhood undergoing a gradual transformation. The goal of this study was to search for the impacts of the local authority’s strategies on homeowner inertia, private sector disinvestment and the implications of urban redevelopment. My findings revealed that the local authorities can produce desirable results for less attractive neighborhoods with the help of marketing, institutional strategies and effective land use planning without leading to dislocation and gentrification. Overall, this study suggests that ‘institutional’ strategies are crucial for urban policies and future urban redevelopment activities.