Homeownership Impossible In Tehran As Quality Of Life Drops
Owning a home in the Iranian capital Tehran has become virtually impossible while the key indicators of the quality of life are also in decline.
Owning a home in the Iranian capital Tehran has become virtually impossible while the key indicators of the quality of life are also in decline.
Iran's leading economic daily Donyaye Eqtesad (World of Economy) published an article Saturday listing a plethora of problems facing the residents of the capital.
The average time people needed to save money to be able to buy a residence in Tehran has increased to a staggering 112 years, from about 22 years in 2005. According to Donyaye Eqtesad, the period of time for those born since late 1990s -- the so-called generation Z -- is now estimated to be 200 years.
Economist Hassan Mansour told Iran International that the Housing Affordability Index is about four to 10 years in England, where housing prices are among the most expensive in the world. “This means there is no hope for Iranians to own a home,” he noted.
Last week, Mohsen Pirhadi, the vice-chairman of the parliamentary committee for Iran’s Seventh National Development Plan, said the government plans to reduce the timespan to 12 years in the next development plan. Despite launching seven development plans since the 1980s, to continue building infrastructure, establishing key industries, and expanding public services and education, which were fast expanding during the monarchy, Iran still remains classified as a developing country, with an average economic growth rate of only 2.5 percent during the Islamic Republic.
Donyaye Eqtesad released the new data after Tehran's city council members held a meeting with officials of the municipality and experts to mull over a comprehensive plan for the capital, comparing the current indicators about the city with those of 2005. Three major indicators of "quality of life" in Tehran have significantly deteriorated since then, with affordable housing, air pollution and urban decay being the main issues.
Amir Mansouri, a professor at the Faculty of Architecture at the University of Tehran, said during the meeting that "We live in a city where half of the population is in danger of devastating earthquakes, the price per square meter of housing exceeds 600 million rials (approximately $1,300), and ordinary people can no longer afford to buy a home in this city, even renting a place in some neighborhoods has become impossible.” The monthly minimum take-home pay (without benefits) is around $120.
Earlier reports in mid-2022 indicated that there was a more than 300 percent rise in rents in Tehran in a matter of three years. And figures released in December 2021, some six months after Ebrahim Raisi took office as President indicated that food and housing expenses had risen between 300 to 740 percent during the preceding six years while wages went up by around only 270 percent during the same period. A prominent economist, Hossein Raghfar, said earlier this year that high rents in Tehran have pushed many tenants to the less expensive margins of the capital where a new social sub-class is taking shape, with some people having chosen to live in makeshift houses built on some of Tehran's rooftops.
According to a report by reformist daily Shargh earlier this week, the Iranian government has exerted pressure on real estate advertising platforms to keep property prices hidden. The newspaper also noted that for the past eight months, the government has refrained from disclosing housing market data on the official portals of the Iranian Statistical Center and the Central Bank.
Mansouri added that the residents of the capital are exposed to polluted air for more than 200 days a year. Tehran has been logged as the most polluted city in the world for at least several days per year. The capital’s pollution is mainly blamed on poor government policies, desertification and low water levels, as well as climate change that has intensified sandstorms.
Moreover, the usage of highly polluting diesel and mazut fuels in power plants -- instead of natural gas -- jumped in Iran in 2021 on top of increases in previous years. Mazut -- commonly called waste oil -- is a heavy, low quality fuel oil, only used when the facilities to blend or break it down into more conventional petrochemicals such as diesel are not available.
Iran has the world’s second largest natural gas deposits but is unable to boost production because it lacks capital and Western technology. It needs to invest $40 billion in modernizing and expanding its gas fields, but most are in the Persian Gulf and need Western technology. Due to its anti-West foreign policy and an expanding nuclear program, Iran is under US sanctions and cannot borrow money or technology from the West.
According to police and security sources, four Kurds were shot dead and 15 people were wounded during the clashes in the city, controlled by the Iraqi government and home to diverse groups of people including Kurds, Turkmens, and Arabs.
Amir Shwani, a spokesman for Kirkuk police, said in a statement that a curfew had been lifted and vehicles were moving normally in the city on Sunday, but security forces had deployed additional troops to "prevent violence and protect civilians."
The city has been a point of contention, witnessing disputes between Kurdish forces and the Iraqi government. Iranian-backed militias have recently escalated aggression in the region, firing rockets to target gas fields on the road to Sulaymaniyah, a large city in the Kurdistan autonomous region about 100 kilometers west of Kirkuk.
The clashes followed days of tensions over a building in Kirkuk that was once the headquarters for the Kurdistan Democratic Party (KDP) but was used by the Iraqi army as a base since 2017. Iraq's federal supreme court issued an urgent ruling on Sunday obliging the government to delay procedures regarding the handover of the building to the KDP.
Kirkuk, an oil-rich province in northern Iraq along the fault lines between the Kurdish autonomous region and areas controlled by Iraq's Shiite-dominated central government, has been the focus of some of the country's worst post-Islamic State violence. Arab residents and minority groups, who say they suffered under Kurdish rule, have protested the KDP's return to the city.
“Dozens of protesters, mainly members of the Iran-backed Asaib Ahl al-Haq militia and their supporters, have set up tents near the JOC headquarters since Sunday evening in protest to the potential return of the KDP. They have blocked access to the highway and vowed to continue their demonstration until [Prime Minister Shia al-Sudani retracts his decision,” Rudaw Kurdish news agency reported reported.
Similar clashes are also happening between Kurdish-led forces and groups of Islamic militias and tribes in eastern Syria. The violence has killed 49 fighters from both sides and eight civilians, according to the Syrian Observatory for Human Rights war monitor.
The involvement of the pro-Iran militias also has another dimension. Late in August, Iran and Iraq formalized an agreement to dismantle Iranian Kurdish dissident factions stationed in the northern reaches of Iraq and relocate them from their bases.
Nasser Kanaani, spokesperson for Iran's Foreign Ministry, said the Iraqi government had undertaken the commitment "to disarm the armed terrorist groups stationed in Iraq's territory by September 19, and subsequently, evacuate and transfer them from their military bases to camps designated by the Iraqi government."
Historically, Iran has intermittently executed targeted operations against the Kurdistan Democratic Party in Iran (KDPI) and other Iranian Kurdish dissident elements operating within Iraq's semi-autonomous Kurdish region, adjacent to Iran's borders.
Various Iranian dissident factions in Iraq have aligned their allegiances with the two principal Iraqi Kurdish parties: the Kurdistan Democratic Party, headquartered in Erbil, and the Patriotic Union of Kurdistan party, with its stronghold in Suleimaniyah.
Foreign sources monitoring Iran’s oil shipments estimated in August that daily exports reached close to two million barrels per day, after climbing to one million in 2022 and 1.5 million earlier this year. A Reuters survey published August 31 showed that OPEC’s oil output rose in August as Iranian supply jumped to its highest since 2018, despite ongoing cuts by Saudi Arabia and other members of the wider OPEC+ alliance to support the market.
However, the head of Iran’s Planning and Budget Organization, Davoud Manzoor, said in late August that only half of the government’s projected income form oil exports has materialized since the beginning of the current Iranian calendar year on March 22. He also claimed that the oil was sold at around $60 per barrel.
Given the fact that in this period the government was expecting to earn around $13 billion from oil exports, the Fararu website in Tehran argued that Manzoor’s statement means the government earned only $6.5 billion.
Apart from uncertainty about the real volume of Iran’s oil exports, another puzzle preoccupies the media. How much discount Iran provides to buyers of its oil. Perhaps that discount should explain why the government has earned only half of the expected oil revenues.
If an average daily 1.5 million barrels of oil was sold since March at $60 a barrel, the government should have earned $13.5 billion, EcoIran and Fararu websites point out. Therefore, either the volume of exports was lower, or the Islamic Republic offered deeper discounts amid US sanctions on its oil exports and banking transactions.
This leads to the belief that Iran is offering its oil at closer to $30 a barrel, while Russia, which is also under sanctions, sells its crude at around $60, and Tehran must compete with its ally to attract Chinese buyers.
The $30 price estimate comes from an average daily export of 1.5 million barrels, that industry sources have been reporting in recent months. At that price, Iran could earn $6.75 billion in five months since March, which is close to what Manzoor, the head of the Budget organization announced as government oil revenues in this period.
There is also the possibility that China pays more for the oil on paper, but actually remits much less in cash and the rest in barter. There are also middlemen who facilitate the illicit oil shipments and launder the payments for Iran amid banking sanctions. These activities could also take a big chunk out of the revenues.
Tankers carrying Iranian oil usually engage in ship-to-ship transfers in Asian waters to hide the origin of the shipments before it reaches China.
A substantial part of these hard currencies is sold at a subsidized rate to importers of essential goods, such as food and animal feed. While one US dollar fetches 500,000 rials on the open market, the government provides the hard currency at 285,000 rials for imports of food and medicine.
Since the United States exited the JCPOA nuclear accord and imposed the sanctions in 2018, Iran has been selling its oil in clandestine methods to China. Export volumes and prices are a state secret, and all figures are estimates by industry observers and occasional bits and pieces of information from government officials.
Expressing support for the "Woman, Life, Freedom" movement and those killed and imprisoned by the regime, the activists pointed out, "We repeatedly remind that the structure of religious authoritarianism not only undermines our national foundations but also propels us towards future upheavals and movements towards rebellion."
Two weeks before the anniversary of Iranian protests, the pro-reform individuals representing a more radical posture than former President Mohammad Khatami demanded a referendum to make "structural changes" in the Islamic Republic political system.
Iranians expect renewed protests on the anniversary of the "Woman, Life, Freedom" movement later this month, and the signatories of the statement, without explicitly calling for demonstrations, voiced support for young dissidents. "Now, we express our solidarity once again with all the families affected by the protests of the past year and hold the uprising of young people seeking freedom and equality, especially the resistance of justice-seeking and freedom-loving women, in high regard," they emphasized.
"Therefore, structural change and a referendum to establish a government derived from the people's vote will remain a right that we continue to advocate so that Iran no longer suffers beyond what it already has," they said.
Iran's reformists, who advocate for a more humane version of the Islamic Republic as a form of government, have been driven out of power by hardliners in the past three years. Even moderate conservatives, such as former parliament speaker Ali Larijani, have been pushed into retirement from public office.
When nationwide protests began in September 2022, after the death in custody of Mahsa Amini, reformists were initially ambivalent toward the movement, which appeared to be more radical than simply demanding reforms within the Islamic Republic system. Prominent reformists adopted contradictory postures, with many rejecting regime change as the desirable goal of the protests.
On November 14, two reform figures, former President Mohammad Khatami (1997-2005) and former vice president Massoumeh Ebtekar, broke their silence after more than 8 weeks of protests about the possible demise of the regime and voiced their opposition to dramatic changes in Iran.
Khatami revealed his opposition to regime change by saying that it was "neither possible nor desirable." Nonetheless, he warned that if the current state of affairs continues, the ground is paved for a looming social collapse.
The divergence of opinions among reformists sharpened in February when former prime minister and Green Movement Leader Mir-Hossein Mousavi issued a statement demanding "fundamental change" based on the "Woman, Life, Freedom" movement and constitutional revisions. Mousavi, who has been under house arrest since 2011, said in his statement that the people have given up hope for reforms and they demand widespread change.
Although Mousavi did not openly call for regime change, the demands he put forward could lead to a new and more democratic political system. Ironically, his statement implicitly repeated what exiled Prince Reza Pahlavi has been saying for years, and other opposition figures were demanding during the protests. Mousavi was a pre-imminent Islamic revolutionary in the 1980s.
Khatami, as the symbolic father of the reform movement, nevertheless has maintained his more loyalist position, asking for reforms, while parliamentary elections in March put average reformist figures in a quandary of whether to announce their candidacy or boycott what, in most probability, will turn out to be another engineered vote by the ruling hardliners.
The 300 mostly reformist figures who have signed the latest statement appear to have adopted a position closer to Mousavi, by calling for a referendum.