Ahmadinejad's reign threatened by soaring housing prices

Israeli study shows young couples impatient over apartment crisis.

By SHELLY PAZ
January 9, 2007 22:09
2 minute read.
Ahmadinejad's reign threatened by soaring housing prices

ugly apartment 88. (photo credit: )

 
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Iranian President Mahmoud Ahmadinejad is in danger of losing the next election due to a greater than ever housing shortage crisis in Iran, especially among the poor and the young, according to a new study. Meir Javedanfar, Iran analyst at Meepas, an Israeli-based independent political and economic analysis company, says in a study published in the current issue of Iran-Pulse that it is now almost impossible for young Teheranis to purchase a home without financial assistance from their parents. This problem is not exclusive to lower-class residents but is also troubling the Teherani middle-class. The study reveals that every year 800,000 new families are formed in Iran, while only around 450,000 housing units are constructed. At the same time, a three-bedroom apartment in a mid-Teheran neighborhood that sold for $3,000 in 1990 is now worth $95,000, a more than 3,000 percent increase. Meanwhile, incomes have barely improved and sometimes even eroded due to a high rate of inflation. This problem has existed in Iran, and especially Teheran, for many years but never has it been so acute. The crisis's roots can be traced through Iran's recent history. First was the baby boom that followed the Iran-Iraq war (1980-1988), which was followed by a high number of refugees from Afghanistan and Iraq in the early 1990s. Then came the governmental reforms in the loans system whereby loans were no longer given directly to residents, a change which strengthened the construction companies and weakened the citizens. Finally, a massive earthquake in northwestern Iran in 1990 left 40,000 dead and hundreds of thousands homeless. Ahmadinejad's administration has been dedicating more attention and money to this problem, but the government assistance seems to be a drop in the bucket. The administration has presented a five-year plan to build 50,000 housing units a year, along with offering loans to recently married couples from poor families. However, the shortage and price increase are much greater. For example, two million applications were filed recently for 30,000 housing loans of $10,000. Javedanfar claims that even those who did receive the loans were still not able to buy a house in Teheran or in other major Iranian cities. "The Iranian public is becoming impatient. Unless urgent actions are taken, current domestic policies might have a lasting affect over the next presidential elections of 2009," Javedanfar predicts. Before becoming president, Ahmadinejad served as Teheran's mayor and is considered to have been a good one. "He was increased Teheran bus fleet, he was very influential in promoting sport for women, and he improved the recycling system," Javedanfar said. Born in Iran, Javedanfar, 33, left for London in 1987. He came to Israel two years ago. "The main reason people voted for Ahmadinejad was because of internal problems such as corruption, inflation, housing and unemployment," he says. "He looked the least corrupt candidate, and unlike the ayatollahs he had lived among the people before he became famous. They didn't elect him to confront America and unless he addresses these issues, in the next elections his position would be in danger."

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