The Politics of Housing and New Property Ownership Regime in Iran

The urban land has become a highly contested issue in urban politics and planning as steep rise in land prices has continued in last three- four decades. The value of land relative to GDP fell constantly in 19^th and first half of the 20^th century. Since then it started to increase. In 1980 economists suggested that just as increase in agricultural productivity led to a decline in the relative value of agricultural land, the relaxation of strict limits on urban development would lead to a decline in the relative value of urban property. As a result, the rising skyscrapers and development of the suburbs were to lower the prices of the urban land-- by adding the land supply or increasing its productivity, in the process of planetary urbanization. ‘Land grabbing’ supposed to reflect the ‘demand’ for shelter (Ansoms 2014; Kaag and Zoomers 2014; Liberti 2013), and less regulation supposed to serve the “supply’ side (Glaeser 2015).

Looking at changing governance of urban land one decade after the 1979 revolution in Iran, this paper examines unleashed speculative activities in the real state market supported by the 1990 urban reform in Tehran. My focus is on major legal changes in land ownership, property rights and land use regulating practices and their dramatic effects on urban inequality and polarization of households’ assets. Comparing the impacts of intensification policy (irregular extra construction permits for larger plots of land) on two different neighborhoods in Tehran, this paper suggests property rights matter most for wealth inequality, which tends to be more extreme and stable than income inequality. Intensification policy works against the very small landlords and tenants in Iran and condemned them to live in their old units till the building collapses. Tenants are the main losers of such policy.