Incentives for Restoring Old Homes in Tehran

Incentives for Restoring  Old Homes in Tehran Incentives for Restoring  Old Homes in Tehran

Loans at low interest rates, incentives and other facilities will be offered to residents of old and dilapidated buildings in Tehran under a new scheme devised by the government and the Tehran Renovation Organization (TRO) to upgrade distressed housing units.

Such schemes were floated in the past under the previous government but were doomed from the start due to the lack of funds as most of the money was diverted for the dubious Mehr Housing project.

The present scheme aims to encourage the residents of mostly Tehran Municipal Districts 10 and 12, to renovate their homes and minimize the possible damage in the instance of a natural disaster, given that old buildings are highly vulnerable to natural hazards like earthquakes, and would be the first casualties.

Officials hope that the higher loans will encourage the people to renovate old estates, one of the main obstacles in the way of urban renovation, the Persian language newspaper ‘Sharq’ reported.

District 12 is in downtown Tehran and has the highest concentration of historical monuments as well as old buildings. Imam Khomeini Square is the center of the historical texture of this district, which has 31 neighborhoods and 100,000 households. As a major economic hub of the capital since olden days, District 12 has a distinct record and some of its sections in the Grand Bazaar date back to the Safavid era. It is also a popular touristic center.

District 10 is located in the capital’s western part. With 340,000 residents, it is among the most populated districts in Tehran.

Under the plan, 500 million rials ($14,500) in loans at 9% interest will be given to the applicants. Also, another 200 million rials ($5,800) low-interest loan will be given to those who want to rent a house till such time the renovation of their homes is completed, said Ebadollah Fathollahi, managing director of TRO.

This fiscal year (started March 20) loans will be provided to 12,000 households in the capital, he said.

Unlike in the previous schemes, loans for renovation will not be given to housing units with a land area smaller than 100 sq m. But owners of at least three small housing blocks can join together and avail the incentives and facilities on offer.

 Merger of Smaller Units

“The measure has been taken to encourage the merger of small housing units,” he said.  

Fathollahi could not say whether the new scheme would be effective, but admitted that similar projects implemented earlier were not successful.

He pointed to the obstacles in renovation of distressed urban areas during the two terms of the former government.

“During former president Mahmoud Ahmadinejad’s tenure, the budget allocated for renovation of distressed areas was spent on the Mehr Housing (low cost) project,” he said.

Officials say many of the Mehr housing units are substandard and don’t comply with some of the basic construction norms and standards. Some say the poorly built units are a hazard and should be demolished.


Explaining the incentives offered to elicit people’s cooperation under the new dispensation, he said the applicants needn’t pay for the reinstallation services of electricity, gas, drinking water and wastewater pipes, which cost about $2300. Also, payment of inspection, supervision and other services to the tune of $4,000-$7,000 charged by the Iran Construction Engineering Organization (IRCEO) would be waived. Renovation permits would be issued free of charge.

Stating that most of the distressed housing units (60%) are smaller than 100 square meters, he said 36% of the units are less than 75 sq. m and 24% between 75-100 sq. m.

Distressed urban areas are urban blocks where at least 50% of the buildings are dangerous, dilapidated, and highly vulnerable to natural hazards. The alleys in these areas are less than six meters wide and the buildings mainly have a land area of less than 200 sq. m.

At present, more than 1.1 million Tehranis from among the capital’s 8 million people live in distressed areas, which cover more than 4,400 hectares of the overcrowded metropolis that has expanded immensely over the past four decades.