Inflation and the skyrocketing cost of housing in Iran no longer needs interpretation or explanation. What happens in the streets and cities of Iran and people feel with their flesh and blood is more evident than any interpretation or explanation could describe.
There is no doubt that the housing market in Iran is under the control of powerful and wealthy mafia-like groups.
Large economic conglomerates and government-affiliated and private banks in Iran are indeed involved in diverting their resources from traditional banking activities towards investment in the construction sector, reaping substantial profits in the process.
It is not uncommon for the housing market in Iran to be characterized by significant fluctuations and price increases. While the market has experienced sustained upward trends in prices, downturns or significant decreases are less frequent or less pronounced.
In other words, it can be said that the housing market, similar to the foreign exchange market, is completely under the control of regime’s authorities in Iran.
Hossein Raghfar, an economist in Iran, said that political forces with influence in the regime essentially have exclusive opportunities to obtain privileges and engage in housing construction. They seek to generate significant profits by contributing to inflation in this sector.
The maneuvers of the regime regarding housing, construction, and price control are indeed quite evident. It is clear that the government’s involvement in these areas, including construction, buying and selling, and renting, is driven by profit-seeking and exploitative motives. Unfortunately, due to the regime’s approach, these maneuvers have never been beneficial to the public and have not addressed the housing issues faced by Iran’s people. Rather, they have contributed to the perpetuation of housing problems.
The root cause of instability and turmoil in the housing market in Iran is not merely an economic issue but rather a political one. As the saying goes, the root of the problem lies in the political economy of the regime.
Raghfar believes that when the housing mafia claims that the number of houses built in the country exceeds the number of households, these houses are not intended for consumption or the market, but rather for speculation and profiteering in the market. According to him, regime-affiliated builders are effectively engaging in hoarding in this field, seeking higher and higher inflationary waves and greater profits.
The accuracy of this claim can be observed in various processes of the governments appointed by regime supreme leader Ali Khamenei. From the Mehr Housing program during Mahmoud Ahmadinejad’s presidency to the 4 million housing units promised by Ebrahim Raisi, which were supposed to address the issue of homelessness in Iranian households, there has always been a contradiction and an exacerbation of the housing problem. The result has consistently been the opposite of what was claimed, and it has added to the housing crisis and the difficulties homeless people face.
Hoarding, mafia-style pricing, or directive measures have effectively resulted in the affluent class, who are somewhat dependent on the regime, profiting from this market. Whatever is left of the middle class has chosen migration as an option due to the escalating inflation. However, the lower classes of society, who have practically been left without affordable housing options, have resorted to the tragic choice of living in informal settlements.
Statistics suggests that official statistics are engineered and manipulated to portray a distorted reality, which conceals the true depth of the disaster.
The Statistical Center of Iran has recently reported that currently, there are 24.5 million people living in rental housing throughout the country.
On the other hand, official regime statistics indicate that during the five-year period leading up to the year 2023, the price of housing in Iran and its cost as a portion of Iranian households’ living expenses has practically increased by approximately 900 percent.
The significant and erratic increase mentioned indicates that there has been a lack of principled and logical policies in the housing market. Coincidentally, the implemented policies, which consistently result in price hikes in this area, practically serve the interests of the governing entities.
In the midst of these circumstances, the migration trend in Iran, which used to be from rural areas to cities and from small cities towards metropolises, has effectively taken a reverse course under the shadow of regime inadequacy.
It means that low-income households, who used to aspire to the allure of big cities in order to secure a livelihood for their families in the absence of income sources in rural areas and small towns, are now forced to be pushed to the outskirts of cities or return to rural areas due to exorbitant housing costs.