Economy, Business And Markets

Akhoundi Outlines Plan to Revive Housing Sector

Proposed Roads Minister Abbas Akhoundi was in the parliament on Saturday to defend and outline his plans for the next four years 
Abbas Akhoundi reiterated his criticism of the controversial Mehr housing project in parliament.Abbas Akhoundi reiterated his criticism of the controversial Mehr housing project in parliament.
We have first-time homebuyers who require housing to form a family and improving the situation of 11 million Iranians living on the outskirts of cities in poor conditions holds significant value for us

Minister of Roads and Urban Development Abbas Akhoundi, nominated to again head the ministry in the second tenure of the administration, was in parliament on Saturday to outline his plans.

Akhoundi identified four groups of people he aims to support during the next four years.

"We have first-time homebuyers who require housing to form a family and improving the situation of 11 million Iranians living on the outskirts of cities in poor conditions holds significant value for us," he was quoted as saying by IRNA.

His ministry will also strive to "revive distressed urban areas that currently house eight million people in bad conditions" and "provide homes for low-income groups", should he gain the vote of confidence from Majlis on Sunday.

Akhoundi referred to the housing sector as "the most manipulated sector of the Iranian economy" and noted that while there are 24.190 million households and the country has 25.4 million homes, the housing sector is in a shambles.

Following the implementation of the nuclear accord that yanked various Iranian sectors out of a years-long stagnancy and negative growth, housing retains its status as the only sector still scrambling to get out of recession.

The proposed minister reiterated that there are currently 2.587 million empty homes in Iran while the number stood at 630,000 five years ago.

He added that there are also 2.1 million second homes in the country, which brings the grand total close to 4.7 million homes.

"Even if we consider the average price of each unit at $100,000, about $470 billion of this nation's wealth have been locked away unused in empty and second homes," he said.

As Akhoundi noted, the gargantuan number is more than four times the total value of the Iranian stock market.

The nominee reminded that from 2005 to 2013, during the tenure of the former administration, land and home prices in Tehran experienced a nine- and six-fold increase respectively while close to 20 million people, one-fourth of all Iranians, are living in bad housing conditions.

Akhoundi pointed to an excessive waste of resources in the housing sector which, for instance, in the first district of Tehran—the capital's most affluent district—have been used for the construction of 31,000 homes that remain vacant.

"With the polarization of the northern and southern sections of Tehran, the discrepancy in home prices in its districts has had a 12-fold increase," he said, adding that it points to a severe social disparity.

The Central Bank of Iran has also paid 220 trillion rials ($5.8 billion) of subsidies in the housing sector, which the minister-designate called a result of corruption in the housing market and a trend that cannot continue.

Akhoundi said preventing the sale of construction permits in sensitive parts of the city for profit alone as one of the main achievements of his ministry in the past four years, which has caused housing inflation to dip further than the vastly lowered general inflation rate—touted as the biggest achievement of the administration.

The proposed minister, who has oft been criticized for his views toward the Mehr Housing Project, slammed the controversial scheme kick-started by the former administration and noted that his ministry has made headways in seeing it through the finish line.

"In the past four years, we managed to deliver 900,000 Mehr Housing units while many of the units had previously been delivered to the people with many faults," he said.

Akhoundi added that in this project, "we did nothing but waste our resources".

He also stressed his previous plan to revitalize close to 3,000 neighborhoods in the country in the next decade, which are distressed neighborhoods with acute housing problems.

On his plans for the transportation sector, the minister-designate said by the time the tenure of the administration comes to an end, he aims to increase the share of railroads in total transportation to 30% from the current 2%.

That will be done partly by constructing and employing 1,800 kilometers of rails just this year, which he referred to as "a significant event in the nation's transportation sector", he said.

Akhoundi also outlined his aviation plans, finance deals with foreign countries, construction of infrastructures such as highways and forming a Transportation Development Fund.

Add new comment

Read our comment policy before posting your viewpoints