Just two miles north along the Golden Horn from Eminönü – the quarter known for Topkapi Palace, tour groups and Hagia Sophia – lies another Istanbul altogether. In the side-by-side quarters of Fener and Balat, lines of drying laundry stretch across steep, winding streets. Century-old Ottoman houses lean against each other in a kaleidoscope of reds, blues and greens. And art galleries and design shops dot the area along the water.

Like the rest of Istanbul, Fener-Balat is changing. Unlike much of the rest of the city, though, the changes don’t – yet – involve condominiums and shopping malls. Nor have rents skyrocketed as much as in other areas that have retained an Ottoman flavour. This is why the quarter has become a cool hangout and a recognised design district; last autumn, tours of the area were a main event at the Istanbul Design Biennial.

Kenan Sari has seen these changes at first hand. All his close relatives were born in the 160-year-old building where he now runs Cafe Fener, a hole-in-the-wall he opened in 2013, where locals and travellers come to sip frothing Turkish coffee and tap into the Wi-Fi. When he was growing up here, all of his friends were Greek: Fener is home to the Greek Orthodox cathedral, and Fener Rum Lisesi, the world’s oldest Greek school, founded in 1454. But most of the area’s Greek families fled after the Cyprus dispute of the 1960s and 70s. “I lost all of my childhood friends,” Sari says. “Now, people have started coming back.”

The same is happening just to the north in Balat, Istanbul’s Jewish quarter since the Byzantine era. Many people left in the mid-20th century and many Ottoman homes fell into disrepair. And then, from 2003, the city and European Union instituted a renovation programme for Balat and Fener, repairing many of the dilapidated buildings.

Artists and designers followed other residents back to the area. One of these is Mine Atalar of design studio Minush, which creates unusual handmade leather shoes and handbags. Another, contemporary glassmaker Yasemin Aslan Bakiri, runs a gallery and workshops in a restored Byzantine mansion called Camhane.

Elsewhere Küçük Mustafa Paşa Hamam, one of Istanbul’s oldest bathhouses, has been restored and turned into a gallery and, last year, photographer Dilek Keles opened Karanlik Isler Atolyesi, a photography and film exhibition space.

Places to eat are changing, too. Café Vodina, an initiative by the NGO Balat Kültür Evi, is entirely run and staffed by local women, and offers both cooking classes and traditional Turkish plates. Or try Balat’s Agora Meyhane, a 125-year-old restaurant reopened by Istanbul film director Ezel Akay last year. Serving meze and meals from Anatolia, the Balkans and the Middle East, it was listed by Travel+Leisure in January as one of the world’s best new restaurants.

Although tourists are still only trickling into the area, Sari says his customers are mostly foreign. And his staff hail from Greece, Italy and Holland. “It’s a little bit international,” says Sari – just like the new Fener-Balat.