As a result of the implementation of neoliberal policies in Turkey since the 1980s, urban spaces have undergone an increasing socio-spatial polarization. Starting in the early 2000s, the process of neoliberal transformation has also affected Turkey’s predominantly Kurdish southeast (North Kurdistan). Here it coincided with a shift from the Turkish state policy of economic de-development to economic incorporation as a strategy of controlling Turkey’s Kurdish population and subduing its demands for autonomy. In this context, urban development was pursued in the southeast both as a means of capital accumulation and a strategy of economic co-optation of the newly emerging Kurdish middle class and entrepreneurial class of Kurdish urban redevelopers. As a result, the largest city of the region, Diyarbakir, has experienced a construction boom based on a tourism-centered growth model, residential differentiation, and urban segregation. This paper examines the socio-spatial differentiation brought about by neoliberal policies, by focusing on the relationship between urban redevelopment--especially the construction of gated communities--and the emergence of a Kurdish middle class. Zooming in on one of the neighborhoods in a brand new district of the city, Kayapinar, this paper interrogates primarily (1) how the residents of gated communities perceive the emerging socio-economic divide within their city and their place in it vis-a-vis the poorer districts and (2) how they relate to their neighbors within the gated communities. I conclude that while some of the findings in the core literature on gated communities apply to the case of Kayapinar--namely the presence of discourse of urban fear, intra-class socialization, and a consumption culture--this case also differs in important aspects due to the centrality of the ethnic identity in residents’ lives. My interviewees had a positive view of the poorer neighborhoods outside Kayapinar, expressed concern about the increasing socio-economic differentiation within the city, and revealed tensions within gated communities along ethnic and political lines. Based on these findings, I argue that ethnic identity constitutes the central factor that affects how residents perceive different socio-economic sectors of Diyarbakir’s population and whom they see as “the other” in their pursuit of exclusivity and security within gated communities. The study is based on field research conducted in 2019. I carried out 20 semi-structured interviews with residents, using snowball sampling, as well as formal and informal interviews with those involved in the urban development policy making.