Impact of Commodification of Formal Land and Housing Markets in Iran on Decent Housing for Low-Income Households

Iranian cities experienced rapid urbanization during the twentieth century. Despite the massive growth of the land and 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 these formal markets has declined for low-income families and the formal markets have failed to provide many low-income households with appropriate and decent housing. This chapter scrutinizes the current complexity of the land and housing markets in Iran, which emerged from the complex relationships among the main actors structured by economic, social and political dynamics. It argues that the land and housing systems in Iran is highly integrated with the power of petroleum capital that within the structure of the macro-economy hastily converts to real-estate capital. Land and housing are conceptualized as an investment good for profit-making (rent-seeking), and their fluctuating characteristic makes them appropriate for rent generation. This chapter is based on both quantitative data drawn from existing reports and documents and qualitative data collected from interviews. This chapter assumes that the decisive role of real-estate capital exploits land and housing as speculative commodity. It also discusses that the roles of the developmental and rentier behaviour of the state, social demographic change and evolution in the institution of ‘family’ are very conclusive in the failure of the formal markets to meet the needs of low-income households.