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Expert Criticize Gov’t Intervention in Tenancy Market

Expert Criticize Gov’t Intervention in Tenancy MarketExpert Criticize Gov’t Intervention in Tenancy Market

A housing expert believes the government’s intervention in the lease market would cause confusion, as it can increase the share of unregistered, unofficial deals and price rises in the long term. 
“Rental rates depend heavily on the law of supply and demand. The government intervention in setting a ceiling on rent increases would lead to a decline in supply, surge in demand and eventually rent increases,” Mehdi Soltan-Mohammadi added.  
His comments followed the Ministry of Roads and Urban Development’s announcement of new guidelines on Monday to protect residential tenants affected by Covid-19. 
“Tenancy agreements signed as of June 29 may not increase rents by more than 25% in Tehran, 20% in large cities with a population over one million, namely Mashhad, Isfahan, Tabriz, Ahvaz, Qom, Shiraz and Karaj, and 15% in other Iranian cities,” Deputy Roads and Urban Development Minister Mahmoud Mahmoudzadeh said.  
The new guidelines approved by the National Taskforce to Fight Coronavirus also suspends landlords' ability to forfeit a lease during the time the country is battling the health crisis, plus three months after the Health Ministry declares the end of the outbreak. 

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