Iran: Growth in New Towns’ Population Accelerates

EghtesadOnline: The population of new towns grew by 80,000 in the last Iranian year (ended March 20, 2019).

News ID: ۷۴۸۴۶۶

17 September 2019

According to new data released by New Towns Development Company, the population of the new town Eyvanaki increased by 22—the smallest rise—and that of Parand grew by 18,068—the largest rise—over last year. Both these towns are located near the capital city, Tehran.

At present, there are seven new towns with a population of around 100,000 people, news.mrud.ir reported.

Experts estimate that the population of new towns in Iran will exceed 1 million by the end of the current fiscal year (March 19, 2020), while the overall population is estimated to increase to 1.3 million in the fiscal 2021-22 and over 2.5 million in the fiscal 2026-27, Financial Tribune reported.

The number of residents of new towns has increased by about 40,298 on average between the fiscal 1996-97 and 2018-19.

The estimated population of first-generation residents of new towns was put at 280,000 in March 2006-7, 420,000 in March 2011-12 and 776,000 in March 2016-17.

New towns have experienced an 8.8% population growth rate between the fiscal 2006-7 and fiscal 2011-12, and 12.6% between the fiscal 2011-12 and fiscal 2016-17.

With the planned construction of 13 new towns by New Towns Development Company, the number of Iranian satellite towns will reach 30.

The new satellite towns will be Tis in Sistan-Baluchestan with a capacity of 150,000 residents, Siraf and Pars in Bushehr with 120,000 and 60,000 respectively, Houra in Hamedan with 120,000, Amirkabir in Markazi province with 100,000, Kharazmi in Tehran with 35,000, Tabnak in Fars with 60,000, Koushk and Mokran in Hormozgan with 120,000 and 200,000 respectively, Samangan in Kerman with 100,000, Sanandaj in Kurdestan with 50,000, Eyvanaki in Semnan with 50,000 and Shahriyar in East Azarbaijan with 170,000.

Currently, 17 satellite towns have been established in 11 Iranian provinces.

The optimal population of the existing satellite towns is estimated to be around 3.8 million, although currently almost 80% of their capacity remain unused.

The concept of next generation towns that define decent and pleasant dwelling places has long been present in Iran.

Facing monumental challenges, namely population explosion, large numbers of people displaced by the brutal 1980-88 Iraq-imposed war and the alarming rate of rural to urban migration, housing projects were launched on an industrial scale in the 1980s. The new places that emerged came to be known as new towns.

Mehr Housing Project launched in 2007 infused billions of dollars into building homes for those at the lower end of the economic ladder. The plan was to provide people, mostly the youth, with affordable housing. A total of 2.2 million housing units were to be built, 401,000 in the new towns. Reports say 246,000 units in the new towns have been delivered so far.

However, despite the non-stop efforts of successive governments and urban planners, people living in the new towns reportedly make up less than 3% of the country's total population.

Difficulties in New Towns

According to Habibollah Taherkhani, deputy minister of roads and urban development, there are two main reasons behind the inability of existing new towns to achieve their population projections.

“One reason is lack of necessary infrastructure. For instance, proper public transportation is among the critical needs of new towns across the world, but when the housing projects were launched in Iran, it simply was not a priority for the government; the focus then was “build, build, build” and everything else would come afterwards,” he said.

"The other reason is that urban policies in big cities were not in line with those of new towns. All big cities have undergone expansion over the years. That [expansion] was not supposed to be the case because the new towns were being built."

According to Mahmoud Rahimi, a member of the Board of Directors of New Towns Development Company, the new towns built in the past are mostly seen as dormitories and there is no sense of community largely due to topological inefficiency and the inability of the towns to attract businesses.

Vision Plan

The next generation of new towns will focus on proportionate growth in infrastructure, superstructure and utilities, says Zohreh Davoudpour, another member of the NTDC board.

“The towns will have a different topography compared to the existing ones, as they will not be built in close proximity to big cities but rather in the coastal areas of southern Iran,” she said.

What is strongly stressed is that the next generation towns will be safe, eco-friendly and smart, which provide opportunities for startup businesses. If the vision for new towns is realized, they will be self-reliant and inculcate a strong sense of community among its residents, something that is conspicuous by its absence in the existing ones.

Funding for the new projects will be different from the old ones in that the authorities are considering issuing sukuk (Islamic bonds) for securing funds from the private sector rather than begging for funds from the government that is almost always burdened by budget deficits.

"Additionally, BOT [build-operate-transfer] contracts are being considered for some of the projects in the next-gen new towns. Projects that can create reasonable profit in the foreseeable future can be passed on to investors as BOTs, especially projects like building hotels, hospitals and malls, based on feasibility studies," says Sadeq Akbari, another NTDC board member.

The next towns will be resident-oriented, with the government functioning only as the overseer and the private sector in charge of and responsible for all things related to services, amenities and maintenance.