In this thesis, housing production in the last thirty years and housing question of the poor in İzmir is examined. The case study focuses on the squatter housing area in İkinci İnönü Neighborhood that has been suppressed by the luxury housing development and was declared as the urban transformation area under the Redevelopment of Areas Under Disaster Risk Law (no. 6306) by Narlıdere Municipality in 2013. The squatter housing development in İzmir started as the solution by the poor for the housing problem. Particularly in the last ten years, the urban transformation projects that aim to renew and transform the squatter housing areas resulted in exclusion through dispossession of the poor. The research problem is whether the poor can enter into the housing market; how and in what ways they articulate to the system; and what waits for them after the urban renewal project that would be carried out in the area. Accordingly, a field research was conducted. It was a methodologically pluralist work covering field survey, visual documentation, in-depth interviews with squatter housing inhabitants, the mukhtar and municipal authorities, focus group interviews, household questionnaires and interviews, and institutional data collection. The findings of the research indicate that the urban transformation project carried out in the squatter housing area will result in the exclusion and displacement of the poor. The project addresses to higher income groups, is market-oriented, and insensitive to the economic, social and cultural characteristics of the inhabitants of the area. The project will be carried out by the 50% shareholding partnership of Narlıdere Municipality and a private company. Although the urban transformation project has been submitted to the approval of the Ministry of Environment and Urbanization, there is no agreement that specifies the title deed right of the residents.