Aside from the theoretical controversies among housing experts, there is ample evidence in various countries on the failure of market economy in creating a sustainable housing system, particularly for the low-income deciles, a housing sociologist said.
“Calls for government intervention in the housing market in favor of the poor, who can’t meet their housing needs through market mechanisms, are not new,” Abdolvahab Shohlibor added in a write-up for the Persian economic daily Donya-e-Eqtesad.
A translation of the text follows:
Policymaking in the housing sector is not only a technical matter, but is also a highly political issue. One of the distinguishing features of governments from each other is their different approaches regarding housing.
Governments set specific agendas in the housing sector based on their ideologies, class origins and approaches toward macroeconomics and social welfare programs.
‘Surge in Housing Production’
The “Surge in Housing Production” motion, which became law and was communicated to the government on Sept. 21, is the latest example of government intervention in the housing market. It purportedly aims to resolve the housing crisis by increasing supply through support mechanisms.
As enshrined in the “Surge in Housing Production” law, the government is mandated to produce and deliver an average of 1 million housing units annually to legitimate applicants, according to the housing legislation of May 14, 2008.
A look at seven-decade-old history of housing planning in Iran shows that governments have intervened time and again in the housing market and carried out programs to improve low- and middle-income people’s access to housing. They had both successes and failures along the way, but since the beginning of 1990s, the key direction of land and housing development policies was influenced by macroeconomic developments and the new market role.
However, the dwindling social role of the government in controlling the market of land and housing in order to provide affordable housing for the middle- and low-income households is evident. The government has moved toward liberalization of land and housing, leaving them completely to market mechanisms and speculative practices. The excessive commodification of housing [transformation of goods, services, ideas, etc. into commodities or objects of trade] has kept shelters away from a majority of people.
Production of housing in Iran is not aimed at meeting human and social needs; it is instead the means of business and capital accumulation. People and consumers are not the main players in this sector; investors and large real-estate companies design the housing market and even direct government policies.
The most compelling evidence of this claim is the growing number of empty homes in the country that neither people can afford to buy, nor are the landlords willing to rent to tenants who are constantly getting poorer and compelled to move out of cities and live in the suburbs.
Mehr Housing Project
Mehr Housing Project was one of the main and far-reaching government-sponsored affordable housing programs of Iran. The idea of Mehr Housing Project was conceived in the year starting March 2007.
The designers of this plan claim that they sought to fundamentally resolve the chronic housing problem of lower-income households by changing the dominant mechanisms and procedures in the sector (which were based on free-market principles). The defenders and designers of Mehr Housing Project still believe that the project was defensible and that they helped people ease some of their housing woes.
According to statistics, Mehr Housing Project was welcomed by certain sections of the society.
Mohammad Saeedikia, the then minister of housing and urban development, says over 3.7 million people applied for 99-year lease properties in the fiscal 2007-8, of whom 1.3 million were found eligible. However, since the very beginning, Mehr Housing Project proved to be a controversial and, at times, ambiguous plan.
The coupling of this project with the welfare approach of the government, as well as the involvement of affiliated institutions and stakeholders as contractors, the varying quality of housing units built under this project and their facilities, and the wide gap in satisfaction of applicants and beneficiaries were problematic.
From day one, some housing experts insisted that the plan was doomed and that it not only would fail to be effective in solving the housing problem, but would also aggravate problems such as inflation.
Mehr Housing Project, which claimed that with government intervention, constraints and market failure in providing housing to middle- and low-income deciles could be overcome, failed to leave a lasting impact on the housing market, though it added more than 2 million affordable homes and helped some people of modest means to own a property.
The project was stripped of the little social, non-market nature it possessed, especially after ex-president, Hassan Rouhani, came into office, as his government gave the green light to legal sales of Mehr Housing Project licenses and the ownership of 99-year-old areas.
Having the experiences of land and housing liberalization, the mass housing construction under Mehr Housing Project and now that the government is going to initiate the project of building 1 million homes per year, planners need to probe more deeply by weighing weaknesses and strengths within previous affordable housing projects.
Social Sustainability of Homes
From the sociological perspective, the most important advantage of the government’s affordable housing plans is the social sustainability of these residential areas. Some of the most important features of social sustainability of homes that need to be taken into consideration are as follows:
1. The philosophy behind affordable housing programs is to overcome speculative practices in the market, not to promote them. Therefore, it is essential that the main objective of “Surge in Housing Production” would be to provide dwellings for groups with housing problems, not to seek macroeconomic growth by stimulating the housing sector.
2. The participation of target groups in the new housing project should not be restricted to those making the initial down payment. They need to express their ideas regarding the designs of homes and common areas, services, etc. through cooperatives. Their ideas should be transferred to urban developers and architects.
3. Family structures and lifestyles in Iran have undergone serious changes over the last two decades. It is, therefore, essential that planners take note of these changes and do not limit themselves within old formats of ownership structures. For example, options like shared housing for those who seek to integrate housing and workplace, or fractional ownership for low-income groups need to be provided.
4. Reducing the housing model to ownership is one of the serious issues hampering the sustainability of housing in the country. This comes as rental housing is a major feature of affordable housing in the world. It is vital to create an inventory of supported housing with the engagement of municipalities under the supervision of public institution to prevent future housing crises.
5. Residential units are to be built in three forms: intra-city development, urban expansion and detached urban development as per the schemes envisioned in the new housing plan. It is vital to see housing as part of an urban development program in accordance with the characteristics of each of the above forms rather than a mere real-estate development.
6. The old problem with government-sponsored housing programs is the dominance of the so-called dormitory view over the holistic view. The dormitory perspective sees an organic link between housing and employment. Therefore, it is imperative to forge a tie between large-scale real-estate projects with employment improvement programs within the framework of housing councils and the National Housing Fund, which has been envisioned in the law. By doing that, future residents of new homes won’t be forced to commute for long hours to reach their workplace.
7. Social and cultural infrastructures such as mosques, cultural centers, schools, health centers, local markets, cinemas and theaters are indispensable parts of large-scale real-estate projects and should be included in the contracts. Those who will reside in these housing units will need social interactions. Social and psychological disorders and problems will emerge, if we do not take heed of these social and cultural infrastructures.
8. It is necessary to take into account the geographical and cultural ambiance of the country in the new housing project. There are specific cultures that should be considered in the architectural and urban designs of homes in each part of the country to meet their needs.
