This article analyses a case of state-led rent gap-driven gentrification in Abkouh, an informal neighbourhood located in the centre of Mashhad, Iran. Drawing on field observations, media analysis, and semi-structured interviews, it explores varied tactics- compensation, tokenistic participation, and co-opted empowerment- employed by the local state to dispossess residents of their properties and communal life. These tactics aim to persuade residents to accept displacement willingly while controlling potential mobilisation against the renewal plan. The result is a form of ‘dispossession by co-optation,’ a precursor to gentrification, which expands the local state’s authority over land, pushes down the capitalised ground rent, and demobilises community resistance through various inclusionary tactics. By highlighting the various roles adopted by the local state to achieve land dispossession, the article illustrates how the rent gap operates in a context of resistance to urban renewal, particularly where the state refrains from direct coercion.

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