Domestic Economy

Mehr Housing Project Needs Overhaul

Mehr Housing Project Needs OverhaulMehr Housing Project Needs Overhaul

A member of the parliament’s civil construction committee says the best way to overcome the current stagnation in housing market is to continue reforming the so-called Mehr Housing Project. 

“There were two basic flaws in that project; first, anyone with a five-year history of residing in a city was entitled to get a house there, whereas the right should only be given to those who are originally born there. The result was a sharp increase in the demand for houses, which subjected the market to the risk of increased liquidity,” Bohloul Hosseini told Econews on Saturday. 

An outflow of rials from the Central Bank of Iran was enough to help increase the inflation rate, Hosseini said.

Meanwhile, the housing project launched by the government of former president Mamhoud Ahmadinejad defined Mehr housing units as tradable assets. 

“But practically, people can’t sell properties they don’t fully own; there’s no right of possession or inheritance in their contracts,” Hosseini said.   

Hosseini added that those Mehr applicants born in Tehran should be given housing units in their hometown and not in Pardis – a township located 20 kilometers northeast of Tehran. 

“This is a scam. Instead, this could be taken as a golden opportunity for urban reconstruction. Then, the government could sell the rebuilt houses to the applicants, i.e. the first-time owners.  This could easily reduce the housing prices.” 

Hosseini said that an amended Mehr project will only include those who can’t afford buying a house in their hometown. 

“We believe 30 percent of the Iranian population fall into this category and are eligible to buy flats from the new Mehr project.”

Hosseini, who represents the northwestern city of Mianeh at the Iranian parliament, asserted that he will continue taking to the floor with his Mehr housing reform plan until he gets it approved. 

The Ahmadinejad administration launched Mehr housing project in 2007, with the aim of providing thousands of housing units to low-income families. The scheme, which envisaged building more than two million units through a five-year period, eventually caused a sharp hike in liquidity and inflation. 

Foreign companies from Turkey, South Korea and Malaysia were also involved in the project.