Article 31 of the Iranian Constitution has entrusted a very important task to the government and statesmen, laying the groundwork for meeting the housing needs of all citizens. Even if the law had lacked clarity, since the government is in charge of managing the economy and reorganizing economic relations, the citizens' demand for getting access to housing based on their needs and for the government’s prudent measures in this regard are not considered excessive and unreasonable, economist Nasser Zakeri prefaced an article for the Persian newspaper Shargh with this note. A translation of the text follows:
Therefore, statesmen cannot implement measures related to housing as a favor, or an act of kindness to the people, because these are only part of their duties and obligations.
However, that's not the whole story. In the Iranian society, the government's obligations vis-a-vis providing housing go beyond fulfilling legal duties.
Three Developments Under Scrutiny
To better understand this issue, it is necessary to pay attention to the following three developments in our economy in the past few decades.
The first pertains to the huge increase in the volume of liquidity. Over the last four decades, liquidity has increased by more than 9,000 times.
The second phenomenon is the very asymmetric distribution of liquidity among citizens. While many citizens faced numerous difficulties even to get a small loan, huge loans were given with exemplary ease to "special" bank customers who don’t even care about repayment. As a result, a very large volume of liquidity was provided to a very small segment of the society.
The third event was the smooth influx of liquidity into the housing market. As the economy was caught in a recessionary trap due to foreign sanctions and domestic mismanagement, people with high liquidity turned to purchase real estate as a low-hassle and high-yield business and entered this market with their astronomical purchasing power, which resulted in a significant rise in housing prices.
In all the three events, governments occupy a special place. The increase in liquidity is affected by their wrong budgetary policies over several decades. Governments have increasingly relied on the pernicious method of financing their spending by running up budget deficits.
On the other hand, the unequal distribution of liquidity is also the result of the wrong executive and administrative methods of governments. Governments should have moved to reform these methods and replace them with more efficient approaches, but they neglected these reforms. On the contrary, every government has aggravated the prevailing blunders.
In addition, the flood of liquidity to the real-estate market is also the result of the government's harmful abandonment of its main duties. The government should never have allowed housing, as one of the most essential needs of citizens, to become a profitmaking commodity.
The government could have guided the excess liquidity in the least risky paths with its wise policy, but it didn't. Obviously, the government is one of the main culprits of the housing crisis due to its central role in all the three detrimental cases.
The government has created surplus liquidity and distributed it among the people in a very unequal way. Hence, it needs to compensate the damage caused to citizens and recompense its past sins.
Today, if the share of housing in the budget of urban Iranian households is three times the world average, if the waiting period for buying a house has reached 111 years, if 40% of the urban population are renters and cannot easily afford housing that suits their needs, the main factor is the influx of liquidity into the housing market. In fact, the owners of liquidity have taken housing out of the reach of the really needy people.
Reminiscent of World War I Famine
Although it is not like a conflict, this miserable situation can be compared to the conditions of the famine years of the First World War.
The British Army brought a lot of money into our country and with the help of profit-seeking merchants; they bought all the grain in the market and removed it from the reach of the people.
This event, which took place due to the negligence of the government, had a fatal result: with the outbreak of famine, many deaths occurred in the famine-stricken country.
The removal of housing from the reach of the really needy people in the Iranian society is like the removal of bread from the reach of the poor people during the First World War, due to the large amount of money entering the market and the massive purchase of goods needed by the people by profiteers and traders.
The government should think of a plan before it is too late and before the crisis disrupts the fabric of the lives of the low-income and middle class.
