Extended Abstract
Background and Objectives: In recent times, spatial critical studies have become well-established as an alternative to the positivist traditions of urban studies. This perspective views urban space as a socio-economic product that reflects the dominant political and economic conditions of society. Consequently, the spatial political economy approach serves as an appropriate framework to study built space, which is inherently a fundamental element of the capitalist mode of production and a commodity that contributes to economic growth, accumulation, and surplus value production. By conceptualising space as a commodity, it encompasses both exchange value and use value, becoming an inseparable attribute and driving force of the economy in generating surplus value. We explore the formation of value and the process of creating value within space production. We ask: What types of values are embedded in urban spaces? How have different forms of value been shaped and directed? Who is impacted by these values? And how can a balance between these values be achieved?
Methods: This paper aims to define the concept of value in the production of space and to recognise the formation of value embedded within it. Through a conceptual understanding of value, we explore the trends and controversies in the creation of the built environment, particularly the tendency to prioritise exchange value over use value. The methodology adopted combines interpretivism, with an emphasis on hermeneutic and normative approaches, and post-positivism, with a focus on critical approaches. The central premise is that understanding social realities is insufficient without considering political economy relations.
Findings: Employing a deductive strategy, we present several assumptions and observations in Tehran to develop a conceptual framework for creating value in the creation of space. For instance, housing is a clear example where use value is defined by its characteristics in providing a shelter and privacy, while its exchange value lies in its property value and economic driving force. In Tehran, however, with almost 350,000 to 500,000 vacant properties, housing prices have surged by more than 1200 percent in the last decade. This increase has led to social exclusion and poor housing conditions among the lower and middle social strata, indicating a shift from the social and use value of housing to exchange and capital value, effectively depriving housing of its social function. Furthermore, the inner city of Tehran, a historic area that should be vibrant with high-quality public spaces, has seen a predominance of commercial land use on a large scale. Supportive activities such as warehouses and workshops have dramatically reduced the quality of living and public life, resulting in physical dereliction of the urban fabric. This commercial dominance highlights the prioritisation of exchange value over use value, turning the area into one of the most problematic sites in terms of social decay. Similarly, shopping malls and commercial complexes have proliferated across Tehran in recent decades. Although these establishments serve recreational purposes and meet the public’s daily needs, their genuine function has been altered by the restrictions and controls imposed on them. These fully privatised spaces lack publicness, and their inappropriate locations have caused issues for neighbouring residents. This again illustrates the dominance of exchange value, adjusting public spaces to maximise profit at the expense of social value.
Conclusion: The research findings reveal that a coalition of urban political actors and capital holders has formed a consensus to transform urban space into a platform for profit-making and the acquisition of exchange value. However, urban space is also a public realm for citizens, who should be given primacy in terms of use value. In this context, it is crucial to prioritise use value in our urban spaces, or at least to regain a balance between exchange and use values, to prevent disparities in spatial development and enhance the quality of the built environment. In order to achieve spatial and social justice and improve the quality of the built environment, the gap between exchange value and use value must be bridged by balancing the interests arising from both values. As long as the development of urban spaces is driven solely by exchange value and financial profits, disregarding public interests and social value, the decline in the quality of public places is inevitable. Given that the market and investors invariably pursue higher profit margins, urban planners and policymakers must identify and address stakeholders’ concerns and needs, especially the intangible ones, to foster the creation of inclusive urban spaces.