In today’s economy, the so-called “waiting period for owning a home” index has gradually become an important, thought-provoking indicator. One of the key duties of governments is to shorten this period and pave the way for all citizens to buy their own home.
The realization of this goal first depends on increasing the productivity of labor force and their wages, and then on the government’s ability to safeguard the housing market from the manipulation and intervention of profiteers through supervision.
Article 31 of the Iranian Constitution views housing as the universal right of Iranians and obliges the government to lay the foundation for achieving this lofty goal. However, more than four decades since the adoption of the Constitution, you can say that this article has been forgotten; governments have not been successful in this matter. As a result, the waiting time for owning a house has increased gradually; now we are speaking of the waiting period of a hundred years or even more. Nasser Zakeri, an economist, prefaced his write-up for the Persian daily Shargh with this note. A translation of the text follows:
Dream of Buying a Home
A look at the current economic conditions of the country shows that the productivity of the labor force during the period of growth is very low and consequently wage earners didn’t have the opportunity to save money. On the other hand, the astronomical rise in money supply has led to speculative demand in the housing market and a massive increase in housing prices. As such, many citizens no longer dream of buying a home. None of the policies introduced by governments has produced the desired result.
Government officials are now desperate to “regulate the rental housing market”, but they have also failed in this field. Under the circumstances, people are forced to migrate to suburban areas to weather the storm of soaring home prices for a few more years. It’s clear that such measures will not work; if the statesmen remain passive, the citizens will be pushed out even from the outskirts of the cities in the not-too-distant future.
Lord-Serf Relationship
Profiteers have managed to inject huge cash into the housing market and tighten the grip on prospective home buyers by raising prices, thanks to the government’s inattention.
With the acquisition of a significant part of urban lands, especially in large cities, owners of money have formed a kind of lord-serf relationship, just like the years prior to the implementation of the land reform law in the 1960s when farmers had to pay a significant part of their annual income to the owners of agricultural lands to get permission to work on those lands. Now the growing population of tenants has to give a lion’s share of their monthly income to the new masters to be allowed to live in their residential units.
For many years, measures to contain speculative demand for housing and force speculative buyers to leave the market have not been in favor of the real home applicants; it has even faced a kind of resistance on the part of policymakers. You can see traces of conflict of interest here. For example, imagine a senior official who owns several housing units and receives monthly rents from tenants; how can they design and introduce policies to their own detriment?
The government set ceiling on rent increase over recent years, but its policy never guaranteed the protection of tenants. Apparently, those in charge have never called for a detailed report on the enforcement of such rules and regulations. This is exactly why home owners have managed to evict their “serfs” from their properties to the outskirts.
These developments are similar to what happened in Britain at the end of the 17th century. Following the increase in the power of the parliament, the British lords, who occupied the seats of the parliament, strengthened their position in the economy by passing new laws. The new laws made it possible for landowners to evict poor villagers from their lands by enclosing agricultural lands and even pastures and forests. The commons, who had lost even the opportunity to engage in hunting to provide food for their families, joined the colonies in America and Australia, or settled on the outskirts of big cities, including London.
The era of parliamentary empowerment of the English aristocracy lasted from 1688 to 1832; they were able to defend their interests by taking advantage of the parliament.
David Ricardo (1772-1823), a political economist of the classical school, who saw the authority of the landowners at the expense of the long-term development of the economy, had to enter the parliament by purchasing acres of land to influence the country’s legislative process.
Exile to Suburbs
The eviction of tenants from Iran’s big cities and their exile to the suburban areas and neighboring towns in recent years is somehow similar to the story of the expulsion of English villagers from the lands owned by lords in the late 17th century.
The British nobles expelled their subjects by building walls around their lands, but the new masters in today’s Iran advance their goals by increasing rents and employing the laws of supply and demand in the free economy. The evicted English villagers could join the colonies or set up shacks on the outskirts of London, but Iranian tenants do not have such an option because the era of colonialism is over and all the lands in the suburban areas are owned by other people as well.
I believe statesmen failed to pay attention to the citizens’ right to benefit from housing, according to Article 31 of the Constitution, and the painful phenomenon of the gradual deprivation of citizens from the right to live in their native place.
I wish to see the government make a serious decision to solve the housing problem of low-income households once and for all before it is too late. It needs to prepare the ground for the removal of speculative demand from the housing market and take a step toward the implementation of Article 31 of the Iranian Constitution.
