A few days after a housing sector official reported a 50% increase in rents in some areas of Tehran, the regime’s ISNA news agency reported that “field studies in Tehran show that some landlords have increased rents by 50 to 70%.”
ISNA wrote that “given that the 25% cap on rent increases over the past three years has not been very successful, tenants do not have much hope for controlling rates this year either.”
In June 2024, rent inflation in the capital was 43.2%, about twice the set cap, breaking the 12-year record for rent inflation in Tehran.
Hossein Janati, Director General of Roads and Urban Development of Tehran Province, stated that the rental rate ceiling in Tehran is set at 25% and no landlord has the right to increase rents beyond this rate. He said: “We remind all landlords not to set rates higher than this amount. Landlords and lessors should act fairly and reduce tenants’ concerns by setting a 25% rent ceiling.”
Previously, while the Iranian regime had set a 25% cap on rent increases nationwide, Iranian media reported a 43% growth in rent and the failure of the government’s regulatory policy in the rental market.
The rapid increase in housing rents has occurred as the Parliamentary Research Center reported in the summer of 2023 on the increase in the number of lower-income groups being pushed out of the housing market, stating that income deciles one to three are absolutely unable, and deciles three to five and even part of decile six are relatively unable to secure the necessary housing for themselves.
In this context, Yasser Dastmalchian, secretary of the Real Estate Market Regulation and Control Working Group, stated that the official registration of sales transactions and obtaining tracking codes for transactions are essential, and reported that there are over 5,000 “unauthorized real estate agencies” operating in Tehran.
According to the “Land, Housing, and Rent Market Regulation” law, if a landlord does not adhere to the annual rent increase rate, and if the tenant files a complaint, the landlord will be fined up to five years after the contract is signed and upon confirmation of the violation by the competent authority. The landlord must pay the excess amounts received as a fine to the tenant and comply with the maximum permissible rate set by the Supreme Housing Council.
This law, passed by the Parliament, was approved by the Guardian Council on May 7 this year.
Some experts say this law reduces the attractiveness of the rental market, which can lead to increased demand pressure and higher rates, while others believe it will strengthen tenants’ positions. However, what we are witnessing in practice are continuous record-breaking rent increases in various cities, including the capital of Iran, indicating the inefficiency of the Iranian regime’s governance system in regulating and controlling the housing market.
