Houses in the distance.

Shelter. Home. Four walls; the deepest layer of mental, physical, and spiritual security. The people of Iran, in order to provide this safe place to live, have resorted to rooftops, graves, cardboard boxes, sidewalks, parks, and even personal cars and buses. The statistics become more horrifying every day. Although accurate numbers have not been released since the end of the previous century (neither by the Central Bank nor by the Statistical Center of Iran), the latest figures and quotes tell the story of a worsening housing and shelter crisis.

Simply search the phrase “Percent of rent to income” on Google; meaning “percentage of rent to income.” After that, write the name of each country. The first results will show you how much of a household’s income goes towards housing costs in each country. This number typically reaches around 30% in healthy economies. However, prior to the latest wave of inflation in Iran, it was estimated to be close to 43% by the Statistical Center of Iran. According to a report published by the Statistical Center of Iran titled “Macro and Socio-Economic Indicators of the Country” in May 2021, the “net ratio of housing expenses to total household expenses” for urban households in 2020 reached 42.81%. This number was 23.14% for rural households. These figures show a growth of approximately 4% compared to 2019, and a number for 2021 has not yet been released. (1) This means that by the

This is an image caption.
The ratio of net housing costs to total household expenses.

These simple numbers and figures show how much of an Iranian family’s income is spent on housing expenses and how much an Iranian citizen pays for a house compared to citizens of European and American countries. The share of housing expenses in the household budget in Iran is about twice as much as this ratio in the European Union and the Eurozone.

A portion of the income that can be spent on food, health and medical care, education, savings, new investments, and even entertainment, is actually spent on providing shelter. In fact, families are forced to sacrifice necessary food consumption for their health, turn a blind eye to many medical expenses, fall short on savings, fall behind in education, and cancel travel and social events in order to stay safe in their shelter.

These are new conditions that we must accept that the statistics published by official sources in Iran are accurate and precise. For example, according to the column “Average monthly rent and three percent deposit for renting one square meter of residential space” in the table “Average price and monthly rent for housing in the whole country” published by the Statistical Center, the average rent per square meter was 308,426 “rials” in the summer of 1400; this means that the rent for a 75 square meter house is two million and 313,000 tomans. It is clear that this figure is like a dream for big cities and even cities close to the center; but the Statistical Center publishes a general, average and vague statistic, and evaluating such statistics at a macro level is impossible for traders, researchers or even consumers.

Shocking and terrifying: New information about the housing situation in Iran.

The latest reports, according to the expert of the Office of Social Welfare Studies of the Ministry of Cooperatives, Labor, and Social Welfare, have been published in mid-Ordibehesht 1401. The statistics, which “Peace Line” has shortened for easier reading, are presented below; the Ministry of Labor report explains that “housing crisis” and “lack of access to affordable housing” are two indicators of housing definition. (2).

Homelessness.

The percentage of people who are deprived in at least one dimension of housing (access to water, access to sanitary services, adequate living space, durable housing, and security of tenure).

Not having access to affordable housing.:

The percentage of people whose share of housing is more than 30% of their expenses.

The cost of tenants is close to the poverty line on average.

Two million and four hundred and fifty thousand tomans (monthly).

The cost of tenants near the poverty line in Tehran (highest rate):

Three million Tomans (per month).

The cost of tenants near the poverty line in South Khorasan (lowest rate):

837 thousand Tomans (monthly).

Lack of affordable housing rates in urban areas.:

49%. (9.5 million households).

Lack of affordable housing rates in rural areas.:

40 percent (2.4 million households).

The most important challenge of housing poverty in rural areas.

Homelessness..

The main reason for poor housing in rural areas:

Types of materials used in construction buildings.

Families who did not have access to affordable housing in 1399.

41 percent of households in the country…

Families who did not have access to affordable housing in 1390 (2011-2012):

33% of the country’s households…

The national average housing rate in 1399 (2020/2021) was bad.

19 percent.

The highest rate of bad housing in Iran in 1399 (2020).

Hormozgan with 64.75 percent…

Lowest housing price in Iran in 1399:

Ilam with 4.30 percent..

Average national rate of affordable housing for households without housing in 1399 (homeowners):

41 percent

Highest affordable housing rate for households without housing in 1399 (homeowners):

Tehran with 81 percent…

The lowest rate of affordable housing for households without housing in 1399 (homeowners):

South Khorasan with 9 percent…

Average national rate of affordable housing for households without housing in 1399 (renters):

57 percent

Highest Affordable Housing Rate for Households Without Housing in 1399 (Tenants):

Tehran with 79.9 percent…

Lowest rate of affordable housing households in 1399 (tenants):

South Khorasan with 8.3 percent…

The most deprived provinces of the country based on housing indicators:

Sistan and Baluchestan – Kerman.

The highest number of tenants in the country.

Tehran with 29.3 percent…

The lowest amount of tenants in the country.

East Azerbaijan with 7.4 percent…

These statistics are new and shocking. They are statistics that people have been experiencing for long periods of time. The percentage change in prices in the month alone in the capital of Iran, from November 1399 to the end of December 1400, shows that people have faced price growth between 115% and 20%.

The policymaking apparatus of the Islamic Republic has shown over the past four decades that it does not have a clear direction for economic growth and development. The numbers clearly demonstrate this. On one hand, reckless spending and implementation of deceitful policies, and on the other hand, decreased productivity during periods of economic crisis and budget deficits have led to uncontrollable inflation. On top of that, the foreign policy of the Islamic Republic has made the economic environment of Iran more closed off and the ineffective policies have worsened the situation. As a result, there is no prospect for growth, improvement, or productivity in any sector of the economy. But what has happened specifically in the housing sector?

Misunderstanding of policy-making.

The history of construction, market, buying and selling, and housing-related issues (both production and supply; as well as demand and market) in the past decades shows that policymakers have been confused about the roots of the housing issue. Why? In these years, the solutions provided have not only failed to solve the housing problems in the household basket and citizens’ welfare issues, but have also created deeper challenges. From Mehr housing to social housing and… in none of the governments, the policies of householding have not improved the citizens’ well-being. “Only between 1389 and 1392, 760,000 residential permits were issued in Tehran. This number is sufficient to accommodate a population of more than two and a half million; meaning that if we only consider the population of Tehran at night, the capacity created can accommodate more than 30% of the total population of Tehran.” (3) Earlier, Abbas Akhundi, the former Minister of Roads and Urban Development, had said

This is only a part of the great corruption that has taken root in the economy of Iran; a situation that shows, most likely, the problem of the housing situation in Iran is not due to lack of development in construction, but rather problems arising from the macroeconomy and purchasing power of buyers. One of the most important problems from the macroeconomy has been the issue of density in sales. According to researchers in this field, the main factor for the exorbitant prices of housing in Iran is the price of land. Instead of developing cities, governments have started issuing density permits in major cities, and on the other hand, the concentration of urban facilities and services in major cities has led to a significant increase in land prices.

The ratio of loans to the value of housing is a blind spot causing people’s hardships.

The loan-to-value ratio is an economic measurement that shows the value of your home compared to the amount you owe for your mortgage. Simply search for the phrase “Loan to value mortgage percent” on Google. Although the numbers can vary between 60-80%, the standard that is considered is 70%. This means that in a healthy economy, a mortgage should cover 70% of the expenses. But what about the loan-to-value (LTV) ratio in Iran? This number is less than 20%, which means that the amount of mortgage given to a couple for a home is 480 million tomans. If we consider the average price per square meter of an apartment in Tehran to be 35 million tomans, buying a 75 square meter house would cost 2 billion and 625 million tomans. How much of this amount does the 480 million tomans mortgage cover? Approximately one-fifth or 18%. The even more tragic part is that the couple must pay

The reality is that the housing situation in Iran is a thousand painful and complicated stories. “The Peace Line” in this report has tried to present a simple narrative of what Iranian citizens experience. Stories that do not seem to have a happy ending. Not now, nor in the near future.

Notes:

1- Major economic and social indicators of the country in Ordibehesht 1401 (April-May 2022), National Statistics Portal, 19 Ordibehesht 1401 (May 2022).

2- The “housing poverty line” rate in 1401, ISNA, 18th of Ordibehesht month, 1401.

3- Minister of Roads and Urban Development: I do not want to take pride in building one million empty houses, ISNA, February 7, 2017.