Urban Revitalization to Help Tehran

EghtesadOnline: Tehran will soon benefit from the government’s plan to revitalize urban areas as a significant portion of its 22 districts comprise distressed urban areas, the head of Tehran Management and Planning Organization said.

News ID: ۷۸۳۱۶۱

04 July 2018

Nematollah Torki also told Mehr News website on Tuesday, a special workgroup dealing with housing and urban development, in addition to management and planning, conducted studies for the past few months.

The studies held in the first quarter of the current fiscal year ended on June 21 and the first phase of executive work can now start.

“Initial executive work will most probably be completed by the end of the month of Tir [on July 21] and its implementation will be started at the beginning of the following month,” Financial Tribune quoted him as saying.

If the process to revitalize Iran’s capital city is started, it will prove immensely important since, according to Torki, about 25% of Tehran is comprised of distressed urban areas that house a population of 2.5 million people.

These plans are usually hamstrung by a lack of budget, especially since they are executed by the Ministry of Roads and Urban Development that has long bemoaned a shortage of funds as the main reason behind projects remaining half-complete.

However, Torki claims that budget deficit will not be a problem for many Tehran neighborhoods located in distressed urban areas. He said “a good figure has been considered for renovating distressed urban areas of the country, with Tehran as a priority, in the Budget Law of the current year”. He, however, did not disclose any figure.

But considering the fact that Iran is dealing with an ongoing currency crisis that is expected to create further hurdles for all economic sectors in the coming months, the urban revitalization scheme may also be undermined by this.

The currency crisis has slowly but steadily unfolded in the past six months from the time US President Donald Trump said he will not renew sanctions waivers promised to Tehran as part of the Joint Comprehensive Plan of Action, Iran’s nuclear accord with world powers. He quit JCPOA on May 8 and vowed to reimpose “harshest sanctions in history” against Iran.

“Wherever we are supposed to set any limitations, we will certainly announce it transparently,” Torki said. “But we also call on the people to help in this regard and we ask the guilds and unions collectively to manage and supervise.”

The official emphasized that the government is only tasked with providing support and foreign currencies and faces no shortages in this regard, but most of the work and the responsibility of oversight falls with the guilds, associations and unions.

President Hassan Rouhani on February 8 officially launched the national urban revitalization scheme called Hope in the presence of Roads Ministry and the Central Bank of Iran officials. Shortly after, as per Rouhani’s request, interest rates for loans aimed at purchasing and revitalizing homes in distressed areas from the Housing Savings Account were reduced to 6% from the previous 8%.

Even though top construction companies in Iran were mostly building luxury apartments, villas and malls in the affluent northern districts of Tehran, the slow market for expensive constructs has now forced them to reconsider their position and focus on distressed urban areas.

The government has also offered several incentives to mass-builders, including but not limited to cheap loans, to pursue high-quality construction projects in distressed urban areas.