Home construction loans in urban slum areas have been paid to 17,000 applicants since last year (March 2019-20) up until now, Mohammad Hassan Alamdari, a senior official with Bank Maskan, the state agent bank of the housing sector, said.
“The total value of these loans stands at 10,870 billion rials [$45.8 million],” he was quoted as saying by Hibna.
“The ceiling on loans for construction of new buildings in urban slum areas has increased to 3.5 billion rials ($14,700),” managing director of Urban Regeneration Corporate Holding Company and deputy minister of roads and urban development, Mehdi Obouri, said in April 2020.
Obouri noted that licensed real-estate developers, planning to reconstruct residential buildings in Tehran’s slum areas, will be granted 2.5 billion rials ($10,000) in loans; they can also take out housing bonds worth 1 billion rials ($4,200) from Bank Maskan, the state-agent bank of the housing sector.
“A maximum of 2.3 billion rials [$9,700] of construction loans will be granted to professional real-estate developers planning to build new buildings in the slum areas of other large cities and provincial capitals with a population of over 200,000 and 1.4 billion rials [$6,000] to those in cities with fewer than 200,000 residents.
“Self-builders planning to reconstruct their properties in urban slum areas will be offered two loans worth 500 million rials ($2,100 at the interest rate of 9% and 18% and a 400-million-rial ($1,600) loan at an interest rate of 4%,” he was quoted as saying by the Persian-language daily Iran.
He noted that as per the memorandum of understanding recently signed between Iranian Municipalities Organization and Urban Regeneration Corporate Holding Company, affiliated to the Ministry of Roads and Urban Development, building permits in slum areas will be granted free of charge.
“Earlier, builders who intended to build residential properties in slum areas were entitled to a 50% discount in permit fees. The current MoU offers 100% exemption in permit costs,” Obouri said.
“Fifty percent exemption in architectural and engineering expenses has also been envisioned in an agreement signed between Iran Construction Engineering Organization and the Interior Ministry’s Development Department to encourage homeowners in slum areas to rebuild their homes.”
25% of “National Housing Initiative” Earmarked for Slum Areas
Out of 400,000 residential properties planned to be build under the government-sponsored housing development project, known as “National Housing Initiative”, 100,000 will be constructed in urban slum areas.
Registration in the so-called "National Housing Initiative", aimed at supplying a total of 400,000 affordable homes to people, started in November.
Nearly 20,000 of 400,000 homes will be constructed in new towns, including 7,134 in Fooladshahr in Isfahan Province, 4,448 in Parand in Tehran Province, 2,762 in Golbahar in Khorasan Razavi, 1,547 in Sahand in East Azarbaijan Province, 1,497 in Sadra in Fars Province, 800 in Amirkabir in Markazi Province, 520 in Hashtgerd in Alborz Province and 150 in Tehran’s Pardis.
Generally, construction loans for licensed real-estate developers who tap into advanced technology stand at 2.5 billion rials ($10,500) in Tehran, 2.2 billion rials ($9,280) in other large cities and provincial capitals, and 1.7 billion rials ($7,100) in cities with fewer than 200,000 residents.
Director General of Roads and Urban Development Organization of Tehran Province says 4.5 million people of the residents of the province live in decrepit suburban areas.
"Nearly 30% of the population of this province live in urban inefficient and slum areas; there would be no place to shelter these people in case of a hypothetical earthquake," Khalil Mohabbatkhah added.
“Eighteen percent of the Iranian population live in Tehran Province while it has 500 vulnerable, worn-out suburban areas,” he was quoted as saying by IRNA.
30% Rise in Tehran Building Permit Fees
Building permit fees in Tehran increased by 30% as of June 21 compared with last year. The decision was approved by the Tehran City Council in the final month of last year (Feb. 20-March 19) as per Tehran Municipality’s 2020-21 budget, but was not enforced until now due to the coronavirus-related suspensions of housing projects.
Building permit fees depend on the floor area, scope of work and the type of building being constructed or altered. They form part of the overall costs incurred during the development of a built asset.
At present, overall construction costs in Tehran have increased to at least 45 million rials ($190) per square meter. The average building permit fees hovered around 5-7 million rials ($21-30) per square meter last year. With the 30% increase, permit fees will reach 6.5-10 million rials ($27-42) per square meter.
However, a report by Persian-language daily Donya-e-Eqtesad says, such fees will exceed 20 million rials ($84) in some northern districts of the capital city, particularly for high-rise building projects.
Before the 30% increase, permit costs accounted for 5 billion rials ($21,000) of the overall costs of developing a typical building in Tehran (i.e., a 4-5-story building comprising 8-10 residential units each with a floor area of 80 square meters constructed on 300 square meters of land) in popular districts of Tehran.
Besides building permit fees, real-estate developers say overall costs of construction are expected to increase on the back of strong growth in the prices of construction materials and land.
The cost of construction materials, they say, is now 50% higher when compared with the first half of last year (March 21-Sept. 22, 2019). The average price of a square meter of land in the year ending March 2020 increased by more than 90% compared with the year before. By June 20, land prices rose by 15% in some neighborhoods compared with March.
