Iran’s Ministry of Roads and Urban Development is in talks with Chinese companies for mass housing production, according to a member of the Supreme Housing Council.
Eqbal Shakeri also told Mehr News Agency that the Chinese side is being asked to transfer their production technology, adding that current talks are focused on reducing costs.
The Iranian Parliament’s double-urgency motion called “Surge in Housing Production” was approved last month by the Guardians Council – an oversight body that ensures laws are in line with the Iranian Constitution and Sharia – and is now considered a law.
The proposal was first approved by the parliament in April and sent to the council but was returned to the parliament for amendments. Now the Guardians Council has given the plan, which also happens to be one of the key campaign promises of the new president, Ebrahim Raeisi, its blessing.
The new law requires the government to engage in the construction of one million housing units annually. It has envisioned the formation of a so-called “Supreme Housing Council” at the highest tier of the government led by the president with the minister of roads and urban development as its secretary, along with 11 members of the Cabinet and the head of the Islamic Revolution Housing Foundation as its active members and one parliamentarian as an observer member.
Meeting Needs of Growing Population
According to Majlis Research Center, the influential research arm of the Iranian Parliament, with the advancement of urbanization and changes in the demographic age structure, demand for housing rapidly increased over the years following the Islamic Revolution in 1979.
According to the findings of the National Population and Housing Census pertaining to the years ending March 1977 and March 2017, the Iranian population increased twofold over 40 years. The number of big cities with a population of over 100,000 grew from 23 to 98 and urbanization increased from 47% to 74%. The total number of households jumped by 3.6% from 6.7 million to 24.1 million and the number of residential units increased by 4.3% from 5.3 million to 22.8 million.
Over the years, the country has been short of one million homes, when you compare the number of households with the number of residential units.
Household size decreased from five members in the year ending March 1977 to 3.3 members in the year ending March 2017.
Despite the twofold rise in population, the number of households has increased four times over the 40-year period, thanks to the changes in living preferences and fewer people per family.
The household-to-housing unit ratio declined from 1.26 to 1.06 and urban density (the number of people inhabiting a given urbanized area) when calculated for households decreased from 1.37 to 1.04 over the years.
In terms of the quality of residential units, the share of steel-framed homes improved from 0.3% in the year ending March 1977 to 57% in the year ending March 2017. Low levels of this share is indicative of the expansion of slum areas in a country.
Home ownership, which is of significant importance in the Iranian culture, has always been more than 70%. However, it has been on the decline over the past decades.
The government, the private sector and the cooperatives sector have various shares in the production and supply of housing in Iran. Over the past decades, the government’s share has been on the decline from 20% to 4%. The biggest intervention the government has made in the housing market goes back to granting credits to construction via banks [which has been retained to some degrees up until now], home construction by the Imam Khomeini Relief Committee for the less privileged, supply of land for the Mehr Housing Project and offering incentives to mass builders.
Today, the private sector accounts for the lion’s share of home construction with 90%. Civil workers’ cooperatives have a limited cut in real-estate development.
According to the Housing Comprehensive Plan (March 2017-27) drafted by the Ministry of Roads and Urban Development, the Iranian population is expected to reach 88.2 million in the year ending March 2027.
Projections show that by 2027, 68.2 million would be living in urban areas and 20 million in rural areas. The number of households will hit 28.7 million, of whom 22.1 million will inhabit cities and 6.15 million live in villages.
Newly-formed families will need 4,076,000 homes over 10 years to March 2027 (including 3,997,000 urban households and 79,000 rural households). The country will be short of 1,370,000 homes (including 673,000 units in cities and 697,000 in villages). A total of 5,313,000 homes, including 3,003,000 in the cities and 2,310,000 in villages, have to be repaired or rebuilt by then.
From the Iranian year ending March 2007 to the year ending March 2017, close to 590,000 residential units were built and supplied to the market. The highest and lowest number of homes constructed over these years were registered for the year ending March 2013 with 820,000 and the year ending March 2017 with 390,000, respectively.
About 2.5 million homes in the country are empty. The optimal ratio of vacant houses is considered 5% in urban areas and 2.5% in rural areas whereas it is 10.3% in Iran’s urban areas and 8.5% in rural areas.
The Housing Comprehensive Plan says the number of vacant homes must decline to 1.4 million (1.1 million in urban areas and 300,000 in rural areas).
