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So Ali Ağaoğlu is Turkey’s Zuckerberg, eh? 19/11/2012 - Viewed 3329 times

 

A couple of months ago I asked why none of the Mark Zuckerbergs of the world lived in Turkey [1], but I have lately realized that Turkey does have a class of young [2] dollar-billionaire entrepreneurs. So I would like to say a couple of things about Ali Ağaoğlu’s entrepreneurship. The contractor and self proclaimed “architect of life" recently has become a social phenomenon through his advertisement campaigns. I think his story gives us a better understanding of Turkey.

I have nothing to say about Ali Ağaoğlu’s capacity as a contractor. He really does build high-quality houses. So far, his company has finished 30,000 housing units and 10,000 more are currently under construction. This means that almost 150,000 people are happily living in the houses Ağaoğlu has built, making him the urban landlord of the twenty-first century. Offering people a secure and high-class housing, he encourages them to take out loans and spend 10 to 20 years working on his account. The earthquake risk across Istanbul, the lack of green areas for children to play in and the general concerns of security reinforce his power as a modern landlord.

There is nothing to say up to this point. We have a win-win picture. What I want to talk about is the system that has made Ali Ağaoğlu the public figure he is today. By this system, I mean a complex web of relationships, three of which I find highly disturbing:

1. The relationship between the new housing projects and the city. Before his current Maslak 1453 project, Ağaoğlu all but built a city in the western district of Ataşehir, in the Asian side of Istanbul. Yes, people in the estates in Ataşehir may be enjoying a higher quality of life than most others in Istanbul. But they are living like prisoners compared to their peers in the same income group in Seoul, Paris and London. Take a look at the photos below. Last weekend I tried to take the subway from Kadıköy to Ağaoğlu’s housing estate in Ataşehir. I took the subway to the nearest station, Yenisahra, and walked the rest of the way. Below are three photos from my 30-minute adventure:

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As the Mayor of Bogota says, “A developed country is not a place where the poor have cars. It is one where the rich use public transportation.” But one can get to Ağaoğlu’s housing estates only by car. Don’t you see any problem here? How will housing estate projects and the city be connected to each other? The advertisements for Ağaoğlu’s latest Maslak 1453 project suggest that you can ride a horse from the adjacent forest to your house, but I think we should try walking from the city center first.

2. The relationship between politicians and contractors. An entrepreneur seeking to accommodate 150,000 people definitely has to be on good terms with public institutions, ranging from the Public Housing Authority to the municipalities. A one-percentage point increase in the zoning right on any given piece of land means billions of liras of additional rent. How is this decided? How do entrepreneurs and public investors share the additional rent? Do these decisions take into account the views and sensitivities of the people affected by the projects? I don’t know the answers to these questions, but I guess they lie somewhere between the politicians and contractors, and the way politics is financed in Turkey.

3. The relationship between the construction sector and Turkey’s economy. How can a young person in Turkey become a dollar-billionaire? By engaging in high-tech production and exports? If you try this path in Turkey, you will be labeled as an idiot. Instead, you purchase a land with a building permit for 30,000 square meters and find your way in the municipality to change the zoning plan to construct a 165,000 square-meter building and easily earn an additional 1 million Euro ($1.3 billion). Istanbul was home to 3900 such zoning-plan alterations between 2004 and 2008.[3] I think this answers how Turkey has been able to prosper rapidly by barely investing in education and high-tech industry. But the million-dollar questions to me are: what does it mean for Turkey to invest its limited capital in urban rents rather than in education or industry? Could this be harmful for our economic growth in the long-term?

If we don’t discuss these questions and relations, the national agenda will be swamped by absurd projects. Want to see an example?

Currently, Istanbul has 5,350 square kilometers of untapped forest land. Its population density is 2,500 people per square kilometer. If we could raise this number to 11,000 and zone the forest area for construction, 60 million people can be housed. This means that Turkey’s entire population could move to Istanbul. Manhattan’s population density is 40,000 people per square kilometer. If we can achieve this in Istanbul by building 20-floor buildings rather than the usual 5-floor ones, we can fit 240 million people into Istanbul’s forest area. This means that we could sell apartments to half of the Arab population of 400 million people across the world, as well as to Turkish citizens who do not yet own one. What do you think?

Just imagine the economic growth this project could enable and how many new Ağaoğlus, even richer than Zuckerberg, Turkey could have.

Think about those who would be thrilled by this project, too.


[1] http://www.tepav.org.tr/en/kose-yazisi-tepav/s/3055

[2] According to the tabloid press, Mr. Ağaoğlu has a “younger” life style than that of Mark Zuckerberg.

[3] The calculations on additional rent income and zoning plan alterations are cited from a conference paper, titled “Thinking About Urban Transformation in Istanbul,” by İlhan Tekeli presented at the First Istanbul Design Biennial on 17 October 2012.

*Esen Çağlar, TEPAV Economic Policy Analyst, http://www.tepav.org.tr/en/ekibimiz/s/1025/Esen+Caglar

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