Government Decree on Rent Ceiling Approved; An Unprofessional Decision?
The approval of the government’s decree to increase rent in Iran by the heads of the three branches has become a hot topic of debate in media and social networks. Experts say this decree is a sign of the government’s inability to solve the housing crisis.
On Saturday evening, June 28 (June 18), the Supreme Economic Coordination Council of the Islamic Republic, with the presence of the heads of the three branches, approved the government’s decree to determine the rent ceiling.
According to this decree, landlords can increase rent in Tehran by up to 25 percent annually and in other Iranian cities by up to 20 percent.
Rostam Qasemi, the Minister of Roads and Urban Development, recently confessed on his Twitter account: “The sharp blade of rent is on the neck of the vulnerable class, and removing it requires a jihadi movement, a large and cross-ministerial action.” In this regard, he referred to a “new package to exit this crisis with the cooperation of experts,” which has now been approved by the heads of the branches.
The government’s decree has become a hot topic of debate on social networks and media within Iran. Many social media users have accused the government of incompetence in dealing with the housing crisis and have written about the “astounding rents” of themselves and their relatives. Various media outlets have reacted to the government’s decision with alarming headlines such as “Mr. President, rent has bent the backs of tenants” or “The season of tenant suffering.”
A Decision Based on the View of “Experts”
According to Rostam Qasemi, the determined ceiling is the result of “expert work of the market regulation headquarters.” While the experts of this headquarters have concluded that an annual increase of 25 or 20 percent is commensurate with inflation, there has been much debate about this in recent weeks, and many independent experts have warned the government that such action does not solve the housing rental problem. They have consistently emphasized that determining the rent ceiling depends on various factors including the balance of supply and demand in the housing market as well as inflation.
One day before the government decree was approved, the Housing and Building Deputy of the Ministry of Roads and Urban Development released statistics showing that the average rent per square meter of residential units in Tehran in Ordibehesht of this year had a 50 percent growth compared to the final months of 1400.
The Farhangiyan newspaper, citing Iran’s Statistical Center and the Central Bank, wrote that in the past 10 years, housing rent in Tehran has increased 14 times, while in this period household incomes have increased 12.6 times.
Arman Melli newspaper has also reached a conclusion contrary to what the market regulation headquarters experts have found. This newspaper writes, quoting a member of the Real Estate Advisors Union: “In just the past three years, the increase in rent has reached 300 percent, and a large portion of this figure has occurred in recent months, and it can be said that rents in recent months have increased in a terrifying manner.”
A member of the Real Estate Advisors Union of Tehran Province said: “Every year we witness tenants’ residences moving down by one or several neighborhoods, and this means frustration in society and cultural differences and contradictions in a residential area, and this causes tension and unrest.”
He warned: “If this trend continues, we will witness a catastrophe in the housing rental market.”
In Germany, the ceiling for increasing housing rent over three years should not exceed 20 percent. In areas where the housing market faces high demand pressure, the rent increase ceiling for three years is set at 15 percent.
Source: DW
