Questioning the Housing Gap in Iran Understanding the Housing Gap for Low-Income Households in Iran (based on the political economy approach)

The contemporary formal housing market in Iran has been inappropriately commodified at the expense of deprived households and has failed in the provision of affordable decent housing for low-income families. The stock of Iranian housing market has developed significantly during the three last decades. Despite the massive growth of the housing market, there is a large amount of housing needs that are not satisfied appropriately and decently. The increasing proportion of informal settlements in the periphery of the big cities is irrefutable evidence that the affordability of housing in the formal market has declined for families with limited financial resources and that formal policies of affordable housing have further impoverished these families. The informal practices in the housing system have facilitated the provision of housing for low-incomes through unconventional ways. Consequently, the gap in the housing market (i.e. unsatisfied housing needs) has widened. This paper focuses on the last three decades (the period starting from the late 1980s) and looks at the state of the existing housing market. It aims to understand how, within the existing structures and their institutions, the housing system in Iran through its development has failed to address the housing needs of low-income households. In other words, it aims to identify the factors (such as path-shaping agencies or path-dependent institutions facilitated or impeded by some discourses) that have led to the inability of the formal housing system to provide decent and appropriate housing for a substantial part of society. In this paper, we employ the ASID (Agency, Structure, Institution and Discourse) model to study the housing system in Iran. Aside from looking at the development trajectory of the housing system, we point out the most pivotal actors (e.g. real-estate capital, the State and informal practice), institutional dynamics/structural shifts (e.g. regulatory framework, welfare system and family), and dominant discourses (e.g. homeownership and developmentalist ambition) and integrate them in the ASID model. The paper is divided into four main sections. The first section presents methodological and theoretical approach of the research. The second section provides a clear perspective of the existing realities in the housing system and attempts to understand the contemporary trends in this system, identifying the gaps in the housing market. In the third section, we argue that the aggregated consequences of (a) the decisive role of petroleum/real-estate capital in exploiting housing as a commodity for rent speculation, as well as the developmentalist/rentier characteristic of the State that carries out neoliberal strategies and undermines welfare policies to promote de- commodification policies in housing, and the contemporary social demographic change and evolution in the institution of household, which introduces different types of housing demands, explain the failure of the housing system in Iran. The third section provides an analytical argument to evaluate these factors comprehensively, and underlines the role, interest, and strategy of specific actors in Iran’s housing system. The conclusion, the last section, argues that existing relationships among the main actors of Iran’s housing system, structured by economic, social and political dynamics, make this system incapable of providing decent housing for low-income households.