The percentage of Iran’s tenant population has been on the rise since early 1990s, which increase has been especially significant and worrying in Tehran, the capital city.
This percentage, which in the fiscal 1983-84 dropped to 12% despite the Iran-Iraq War and tough economic conditions, has now reached about 40% for the whole country and 50% for Tehran. This means that all the policies and measures employed in the housing sector during the past four decades have been useless. The remarks were made by Nasser Zakeri, an economist, in an article for the Persian daily Shargh. A translation of the text follows:
The increase in the tenant population and the spread of urban poverty, following the rapid increase in rents, have forced the authorities to take measures to manage the rental housing market. Undoubtedly, this necessary and important decision was an acknowledgment of the failure of their housing policies and the result of ignoring Article 31 of the Iranian Constitution. The article requires the government to protect and support the inalienable right of citizens, i.e., to have a place to live in accordance with their needs.
In June 2019, the heads of the three branches of power set a ceiling for the rise in rents for the first time. Since then, a similar instruction is being notified every year. However, these instructions have not changed the trend of the rental housing market in the past four years.
By the end of 2018-19, the housing rent index in urban areas was 132.3, and if the regulation approved by the government was fully implemented, the index would not have exceeded 275, whereas now it averages 500. In other words, the market has not paid any attention to the regulations written by the authorities.
Granted that at present, the tenant population is living in 1.6 million residential units in Tehran and paying between 80-100 trillion rials ($156.08-$195.11 million) per month to landlords, the daily value of the losses imposed on tenants thanks to the failure to enforce the regulation from the beginning of the fiscal 2019-20 till now hover around 700-800 trillion rials ($1.36-$1.56 billion). In other words, each household has paid an average of 440-500 million rials ($858-975) in fines.
Applying restrictions on rents is the least that can be done for supporting tenants and eliminating the excessive growth of speculative demand from the housing market, as they have disturbed the lives of a large section of the society and created a glaring gap between people and their basic need, i.e. housing.
However, the regulations written by the heads of the three branches of power in the past four years have been toothless, failing to help tenants who were removed from the housing market following the pressure from speculative practices. They are now facing the risk of being banished out of the city, which is to blame on the lack of a strong implementation guarantee.
If there were a will to control housing rents, the necessary regulations should have been put together and approved and a strong implementation guarantee would have been provided. However, in the past four years, officials have failed to pay attention to this key point.
It is necessary to direct the attention of officials to a bitter historical fact. In June 1977 when the speculative practices of urban land traders had led to a 17.3% increase in housing rents in the previous year and put pressure on the low-income groups living in Tehran, Mohammad Reza Pahlavi (the Shah) communicated, in a dramatic move, the 18th Principle of the Revolution of the Shah and the Nation, which called for “a crusade against speculative transactions in land and immovable properties.”
This dramatic move produced no results for the country’s administrative system. Neither the government agencies nor the Shah asked for a briefing from the relevant authorities regarding the implementation of the so-called 18th Principle.
Now the authorities have the following options: They can fail to provide an executive guarantee for their approvals and allow landlords to cause anguish to tenants, or they can abandon this inaction and, at least in the new Iranian year, prevent the continuation of this cruelty against tenants.
They should know that if they become complacent by issuing a decree or two without a guarantee of implementation, history will repeat the same verdict about their decree as it did regarding the 18th Principle of the so-called Revolution of the Shah and the Nation.
