Economy, Business And Markets

Incentives for Builders in Distressed Urban Areas

Incentives for Builders in Distressed Urban AreasIncentives for Builders in Distressed Urban Areas

As Iranian builders operating in old urban districts face many challenges, the Urban Development and Revitalization Organization of Iran has offered a number of incentives to engage developers in underdeveloped neighborhoods.

“We have held a number of meetings with builders and told them that they can even build as many as 10 residential units and we will consider them as major builders,” Houshang Ashayeri, the organization’s director, was quoted as saying by the official news website of the Ministry of Roads and Urban Development.

The incentives, which were previously announced and now outlined for major builders, include special loans that will be allocated from deposits made with the Housing Savings Account.

According to Ashayeri, a total of 10 trillion rials ($266 million) from the resources of the scheme will be assigned to major builders with the consent of property owners in distressed urban areas at an interest rate of 8%.

Since the scheme aims to enable first-time homebuyers to purchase residential units that require them to make a deposit and acquire loans after a year, the official explained how builders would be able to get loans out of the Housing Savings Account.

“We assured them that they can employ the benefits of owners that have made deposits in the scheme such that they will build homes for them and the owners in distressed urban areas will pay the loan installments,” he said.

If mass builders and owners fail to come to an agreement, the builders will be allowed to use government-owned lands and then give the finished homes to other applicants.

According to the director, builders can use 7 to 10 acres of government-owned lands in Tehran alone and then sell the housing units to buyers.

It has been decreed that a task group will be formed consisting of builders and the organization to resolve any dispute.

Ashayeri noted that mass builders are currently less than enthusiastic to enter urban areas, especially distressed parts, because of a variety of reasons such as homeowners trying to build more units, limitations in building high-rises and the difficult configurations of alleys and passageways in these districts.


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