The Return of the Rental Housing Question: Unpacking Turkey’s Housing Crisis

Following the 2008/09 Great Financial Crisis—characterized by the collapse of the housing market and waves of forced evictions across the Global North—the viability of home ownership ‘for all’ has come under critical scrutiny, both materially and ideologically. On the one hand, the liberalizing credit markets introduced to push homeownership rates further upward have reached their limits; on the other hand, the ideological framing of home ownership as the cornerstone of household economic security over the life course has been critically undermined, revealing its structural contradictions. The political project of promoting homeownership at the expense of other tenures has created an alarming housing crisis, as private renting has become the fastest-growing tenure globally, coupled with increasing unaffordability in a highly unregulated rental markets. Since the late 2000s, rental housing prices have been on the rise, increasing by an average of 1.5 times across OECD countries, while Turkey ranks first, with rental costs surging elevenfold between 2015 and 2024. Furthermore, in the past thirteen years Turkey has experienced the fastest real house price increase among OECD countries where the real price index increased from 83.7 in 2010 to 196.7 in 2023 – with a 135% rise. Due to stubburnly high housing inflation, homeownership rate in the country has decreased 5 percentage points over the past decade, from 61% in 2012 & 2013 to 56% in 2023. Widely discussed in the academic literature, Turkey's housing crisis was primarily driven by a state-facilitated credit boom in the non-financial corporate sector—particularly in construction and real estate companies—unlike the household debt-driven crises commonly observed in Global North countries. Turkey’s high inflation has squeezed the mortgage market as the share of residential mortgages in total consumer credits declined to 31% in 2023 from a peak of 49% in mid-2000s. As a result, both the share of renter households and the share of tenants who pay reduced or free rents (among renter households) significantly increased. A substantial body of critical research has examined the contradictions of financialized homeownership policies, which remain relevant as it is still the most institutionally and financially supported tenure in many parts of the world. Yet, the contemporary housing affordability crisis cannot be fully understood without placing rental housing at the core of political economy analyses. With the aim of addressing this gap in the literature, our research paper explores Turkey’s rental housing crisis as a novel phenomenon in the country’s urban history. It places particular emphasis on the history of the state’s exclusionary policies toward rental housing as a legitimate tenure, the changing character of Turkey’s rental housing stock, and the structural reasons behind rental price increases that surpass inflation and wage growth. This analysis is based on a combination of archival research, including parliamentary documents, historical records, and newspaper archives related to housing, as well as national and international statistical data on rental markets, inflation, and wage growth.