INSUBCONTINENT EXCLUSIVE:
TEHRAN - The president, Parliament speaker and Judiciary chief on Sunday backed a government plan which set limits for increase in rental
It set a 25 percent increase in the capital Tehran and 20 percent in other cities.The parliament (Majlis) also approved the general outlines
of the plan on Wednesday and specialized parliamentary committees are going to study the pros and cons of the plan.However, there is a
serious doubt about how this plan, once finalized, is going to be implemented
Experience shows the people have serious doubts about such plans.In the Rouhani administration it was announced that landlords are allowed
to increase rental prices by only 15-25 percent
However, the order failed badly
Only a very small percentage of houseowners increased the price by that amount
They just acted based on their own conscience.The plan failed just because there was no organization or institution to enforce or monitor it
Now, there is a great fear that the new plan may also find the same fate.Rental prices have started going up dramatically from three years
However, increase in the current Iranian calendar year 1401 (which began on March 21, 2022) are more shocking than the years 1400 and 1400
Some landlords have incredibly increased prices by 100 percent
For example, in the early autumn of last year, a tenant could rent a 65-70-meter apartment in the Afsarieh region in southeast Tehran by a
monthly payment of 3 million tomans (nearly 100 dollars) plus a 100 million tomans in deposit money (about 3,500 dollars)
among the tenants, especially families with low income
Some families have been forced to leave cities, especially big ones, and rent a house in outskirts.Now the key question is which inspection
body will monitor the so-called the 20-25 percent increase in rent price, which has been put on the agenda of the government and
Majlis?Surely, the Majlis will ratify the details of the plan, but if its implementation is not effectively enforced by an inspection body
it will prove a big failure and will intensify the public distrust of the responsible bodies.In studying the plan, it is also necessary that
the Majlis close all possible loopholes that may emerge in the implementation process.Final days of spring up until the end of summer is
Most landlords are fishing in the troubled waters
They propose prices which are much higher than the inflation rate
Also, most real estate agents fan the flames of higher rent prices because they get their own commission
For them, the higher the better.Up until this moment, there has been no formula or criterion for setting rental prices
It is landlords who decide about prices
true that supply and demand is very important in rental market, like any other market, but in such a situation in which the inflation rate
is too high it is necessary that the government intervene in the rental market
Just asking landlords not to increase rents more than 20 to 25 percent will not work at all.Being aware of the heavy burden on tenants and
skyrocketing home prices, the Raisi administration has promised to build four million houses in four years of his presidency
Whether this goal will be realized or not, or is too ambitious, is a question that experts must answer
However, the performance of his administration in 10 months of his presidency is not promising
Development has not even finished the remaining Mehr housing units, which some figures have put their numbers at 80,000
Reportedly, these housing units, which started more than a decade ago, are being abandoned and the customers are repeatedly being given
They are being said that they will be finished this year, another six months, three months later, and so forth
These unfinished houses are mostly in new cities in the provinces of Tehran and Alborz, which together house about 20 percent of the Iranian
population.Obviously, incompetence, corruption, repeated increases in prices of construction materials, and illegal sanctions are the main
culprits for delays in finishing the remaining units, which are mostly of low quality.Maybe one of the reasons for such repeated delays is
that the current administration is mostly focusing on its own housing plan.According to statistics given by a former official at the
Ministry of Transport and Development in the early summer of 1400, about 8.5 families were tenants
MP Alborz Hosseini, who sits on the Parliament Development Committee, also said on Wednesday that 32 million out of 85 million Iranian
population are tenants.Naturally, the number of tenants is increasing as families cannot afford to buy a house.However, both the Rouhani and
Raisi administrations as well as the sitting and previous parliaments have been either ignorant or reluctant to make use of the experience
of other countries in taming the wild housing and renting markets
The executive officials and parliamentarians could have levied heavy taxes on the sale of houses in the form of value-added tax (VAT)to
Or the parliament could and still can approve a legislation that would limit the number of houses that a person or family can have in his
possession.Moreover, some experts believe that the ratio between the population and houses is not that much that is causing so much anxiety
They say the main reason is that certain people own tens or probably hundreds of houses, especially in the capital Tehran
Additionally, MP Ali Khezrian, talking in the parliament on Wednesday, announced that 3 million apartments are now empty and the owners
Some have put this figure higher and claim there are four million such houses.These people, who do not need professionalism or expertise,
act like a mafia and hold the key for house prices.Traditionally and truly there have been and still there is a view among the people that
investing in real estate is the best and safest option
House is subject to a meager taxation and it is widely considered as a capital asset rather than a consumer good and this has been proven in
the country.To tame this wild horse and reduce the concerns of tenants and control house prices, probably the first urgent move is to ban
the possession of more than two or three houses by a person for family
effective measures by using the experiences of successful countries in this regard.
