Tehran Municipality and the Interior Ministry of the Islamic Republic of Iran agreed to jointly develop 25-40 square-meter apartments in December 2019. It seems that the new Majles is also likely to agree to this. Before this agreement, the minimum size for an apartment in Tehran was 35 square-meters. There are two questions to ask here: why has the policy of developing 35 square-meter apartments been changed? And is this policy aligned with other governmental social policies such as population growth?
The average price of a 35 square-meter apartment in Tehran and other metropolitan areas has almost tripled in the last two years from 7 million tomans in 2018 to 19 million tomans in 2020. Banks usually lend home buyers loans equivalent to a third to a half of property prices. The minimum wage for 2020 is around 3 million tomans. Therefore, a young working couple – if both are lucky enough to have a job – need to save all the money they earn for 12 years to purchase a 40 square-meter apartment, assuming prices will not rise and somebody takes care of all their other expenses in the meantime.
This is impossible. The solution for almost half of the population is to quit living in decent housing. The number of people who live in slums and shantytowns has doubled in the last couple of years from 19 million in 2018 to 38 million in 2020. Another solution for people who have better wages is to lower their expectations. Due to the inflation in the housing market and saving difficulties, people must lower their expectations and settle for smaller apartments. It is believed that the new housing policy has been fashioned to address this reality.
Taking into consideration the shrinking family size in Iran, the new housing policy is consistent with the country’s population growth trend. In 1976, the average household size in Iran was five persons. This figure reached 5.1 persons in 1986 with a population growth of 3.6 percent during the Iran-Iraq war. But after the war, it gradually decreased and reached 4.8 persons in 1996 and 4.0 persons in 2006. In 2011 and 2016, the average number of people in a household reached 3.5 and 3.3 persons respectively, which means that Iranian households reached an average of less than two children.
The shrinking family size has several economic and social reasons. The most important one is high unemployment rates, up to 60 percent in some cities and up to 60 percent for some university graduates. The head of the Statistics Center of Iran, referring to the unemployment rate in the spring of 2020, said: “Two million people left the labor market and 1.5 million people lost their jobs… the results show that the effect of Covid-19 on the country’s labor market in the spring compared to the same period last year is evident.” According to these results, the unemployed percentage of the country has increased while the active population (i.e. employed) has faced a tangible decline. A large percentage of the population is underemployed. Only 41 percent of the working age population (15 years and older) are economically active.
The minimum 25 square-meter apartment policy is not consistent with the official population policy of the government. Ali Khamenei started his campaign to increase population growth in 2012 and demanded a doubling of the population. Based on his population growth campaign, Iranian health centers stopped providing cheap or free contraception to the poor, and abortion was restricted. Also, the government provided some financial entitlements to larger families.
Iranian population trends have been in opposition to Khamenei’s population growth campaign. Population growth rates have been steadily decreasing. According to the latest statistics of the Civil Registration Organization, the number of births in 1398 (March 2019-March 2020) was 170,000 less than in 1397. In the year before, the number of births was 120,000 less than in 1396. There was a decrease of 203,710 births in 1397 compared to 1394. Also, the birth rate decreased from about 20 births per 1,000 women in 1394 to 16.7 births per 1,000 women in 1397.
Since 2012, the decline in population growth has been significant. Iran’s population growth rate dropped from 1.29 percent in 2011 to 1.24 percent in 2016. The population growth rate in Iran in 2019 dropped to less than one percent. Of course, even with a figure of 1 percent about 830,000 people will be added to Iran’s population.
Recently, Ali Khamenei complained that his population growth campaign has not been taken seriously. He said, “This is an issue that I have emphasized and emphasized many times in the last few years, but unfortunately, now that one looks at the results, it turns out that many of these emphases have not had much effect… This [policy] needs the law; it needs to be seriously pursued by the executive branch, and the issue of childbearing should be taken seriously.” His complaint shows that the government is at odds with Khamenei’s policy and is more pragmatic and in tune with social trends in the country.