Iranian President Speech Highlights Need for Low-Cost Housing

Iranian president Mahmud Ahmadinezhad has highlighted the need for low-cost housing. In a speech on 24 April 2007 before a joint meeting of provincial governors and provincial directors-general of housing, Ahmadinezhad also spoke of the need to create jobs of the country's baby boom generation. He said xxx. The following is the text of the speech, a recording of which was broadcast by Iranian TV on 27 April; subheadings inserted editorially:
Housing
In the name of God most compassionate, most merciful. [Koranic verse recited] I will submit some issues to you the most important of which is housing. Please note that housing, as a cultural phenomenon in our country is quite different from that of many of these western countries. Housing for us is not just a roof over our heads. In other words [it is not] a place where the owner comes to after doing a days work only to go back out again to resume his life. Housing for us is a place to live, to development, to have security, to be constructive. It is a place to establish an important institution called the family. You see quite palpably, what beliefs people in our country have on accommodation across generations. Unfortunately, and despite the fact that the government is charged with providing housing to all strata of society today, and despite all the attempts that have been made so far, a clear and coherent policy does not exist. The situation has so developed that for a certain few people who are now in possession of housing would otherwise not have been able to afford a place now. For many others a substantial part of their livelihood has to be sold or pre-sold so that they can provide a basic minimum of accommodation for themselves.
This is neither in our constitution nor in our culture. The potential of our country should allow us to change this situation. The reality is that our country possesses the necessary potential and capabilities of the nation. The factors that are essential to the housing include land. Today, one of the most important issues is land. Between 25 and 90 percent of the final price or selling price if you will, is dependant upon land or the situation of land and terrain. Its share of the price formation is high. Then there is the question of building materials and workforce and sources of finance. For each and any of these we need to formulate some kind of solution. As far as land is concerned, I shall relay one sentence to you that probably encapsulates all the issues therein. Other than the armed forces, who have their own facilities and who if they wanted to use the rights afforded to them to help their own personnel can benefit from this law. The remaining land which is available, be they natural resources or those for dwelling or for co- operatives, whoever has come by some land through the government then they have to remember that this land belongs to the government and the government alone.
That someone should come and say: This is mine, this belongs to the electricity company, this belongs to the finance department, and this belongs to that department and so on. We will not have any of this. From the start when I announced it, land, in general, all this land belongs to the government. Now, if you want to hand it over for construction, the land that belongs to [government] bodies or companies, give their employees priority. That is the first point.
Second, if we remove the cost of the land from the cost of the finished the product, it would be a big help. It was decided that, from now on, the land will be a long-term leasehold. The land belongs to the government and the government leases it out.
The second [as heard] point is the [construction] material. In other words, the second factor is the material. Go and set up a committee on material and work on it.
Provinces that have border markets - in the south and north - and can import, should import the required ironware without limit, because iron and cement are two main types of material for the construction of housing. The import of these is allowed. There's no limitation. Not customs, no one should impose limitations. Of course, standards and so on should be maintained. In other words, announce this and allow people to import. There are no tariffs in border markets. In other words, multitudes of tariffs are not imposed as they are elsewhere. Go, get it and import it; these two construction material. Ironware for use in construction, don't allow them to import steel under this guise. No! Steel girders and steel rods for use in construction and door and window fixtures are the only [items allowed]. For now, for five, six months, [also] cement, either the clinger [as heard] or cement. After five, six months, God willing, our own domestic cement will suffice, because new plants will come online, God willing. That's as far as the material is concerned.
As to the human resources - well, one of the friends here pointed this out: We have this. Sit down with vocational training [department], and put some of your provincial resources at their disposal - it's in the regulations, I'm just underlining it.
Hold some quick courses and certify them. The plan is already prepared by the vocational training [department]. Give certificates, labourer, grade III labourer, grade II, mason, plumber, welder, whatever; hand it to them. This can be an extensive programme in each province and can be very constructive. Financial resources, these resources are now at your disposal. In other words, you can direct the councils, the ones you have created for the banks, similar to the percentage that went for job creation. Although, and in spite of all your efforts and the banks' efforts, it did not, that is to say the twenty thousand odd billion tomans did not perform so well, and we have to makeup for it this year. I will tell you about it later and we will give a part of it to housing. There are also subsidies. I will explain the details of it in due course. I should flag a few things for your attention; one is the preparatory work. Right now, the provincial governor is responsible for everything. You are the head of the taskforce. You have to take decisions and that's that. You have to prepare quickly. It's up to you who does it and how they do it. But bring the costs down. We can charge the public for the preparatory work. In low-income areas, these charges will be paid in part by the ministry of hosing and you can allocate some provincial funds for this purpose and recover the costs form the beneficiaries over time. You are allowed to do this. Get the money back in instalments, like over 5 or 10 years. It will be 200 tomans a month. The utility companies should come now to do the groundwork. It's up to you, you can tell them come do the work fast, and get paid for it in instalments. Allocate some provincial funds; charge the public for it, whatever you have allocated from provincial funds get the money back in instalments form the beneficiaries. These things are possible. Find formulas to fit local situations in each town. We are not going to give a formula for the entire country.
Your mandate is to house the population starting from the lowest denominator. This means you should start form smaller towns, give more incentive in smaller towns, provide higher subsidies in smaller towns. We will also put you in charge of the subsidies. You can say in a town the loan I provide will be at 4%, and in another town, it will be at 10% and still in that other town, it will be 12% or 14% or whatever. It's up to you. You have to move towards decentralization. You are a regional manager. Pay close attention. The over arching policy is decentralization, you are regional manger and you have to manage things so that this decentralization will happen in your province. You are both the head of the housing council and the head of the article 55 commission. Use this position well. In some towns, you can increase the allowable building extension ratios. We have allowed for up to 300% in the regulations. I don't think you will need more than 300%. Sit down; decide if you need to change the usage [of land]. It's up to you. You can convene a meeting of the article 55 commission and change the usage or grant building extensions. In rural area the ministry of agriculture will fully cooperate. You can have a meeting and change the usage. You can say in such and such place the land is agricultural land and the harvest is inferior. You can change the usage [of the land]. After all, we need housing. You should be mindful of urban sprawl, because later on, the cost associated with that will be higher. These are urban planning issues.
You should then set up a special committee. The committee should benefit from the services of a number of urban developers in your province as advisors. These advisors should be expert, honest and have an Islamic and national outlook to urban development. These advisors should draw the plans and you should act accordingly.
I am asking you to carry out a job on a fast-track basis, and I will explain why. Urban development is in your hands, unless, you would want to make a major change; then the work would be referred to the Urban Development Council. You have however the power to change the use of properties and lands; or allow extensions. This is in your hands. So lands no matter which body owns them or where they are located - inside or outside the city - are under your control.
You have the financial resources and you can quickly organize the manpower. We have decided at the national level to import some construction material, such as iron beams and bars, which we have some shortage. Fortunately, we do not have problem with the production of other construction material; and they are produced more than what we need domestically, such as sanitation amenities, bricks and the like. However, if there were any shortages, you can easily grant loans for the construction of Hoffman furnaces to produce as much bricks as you like.
You can manage the work and succeed. You should be careful not to mix a number of issues. The housing situation in our country is as follows: About 78 per cent of the people live in their own homes; and about 22 per cent do not own houses. They either are tenants or live with their parents or others, i.e. two or three families live in one residential unit.
Today our society is moving in a direction where every family wants to have its independent residential unit; or if there are communal houses, there is some sort of boundary separating the families. For example, in the past, there were some rooms around a yard and the father and his children used to live in each of the rooms. Now the same families live in apartments. [For example] four apartments are built on a plot of land and the children live close to their parents. There is no problem with this; and the system works better for these people as compared to those who live far from each other.
It seems that everyone wishes to have independent residential units. In other words, we have about 22 per cent of people demanding houses; i.e. 22 per cent of 17m [households]. It is 17m now, right? We have 17m households. Some 22 per cent [of 17m households] would mean that there is demand for 3.5m residential units.
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This is one issue. The other issue is the dilapidated areas of cities and villages that need to be renovated. There are 5.5m such residential units. So altogether, there are about 9m units. There are also about 700,000 to 800,000 new families formed every year. If we want to address the accumulated demand and the dilapidated areas within ten years, we should create the capacity for the construction of 1.7 to 1.8m residential units every year.
The more houses we build the better. Some are not interested to work on the dilapidated areas. We should therefore plan to encourage investors to work on these areas. If we create the capacity for the construction of 1.7 to 2m residential units every year, the pressure will decrease and the housing market will calm down.
This is while one-third to one-fourth of the work should be done in villages. If we build between 300,000 to 500,000 residential units in villages, the problem would be settled. We have set the target of granting loans for 300,000 residential units this year. Of course, some finance the cost of construction themselves.
I told the officials at the Ministry of Housing and the Housing Foundation, and I will tell you as well, if this money is quickly used up, we will increase it to cover 500,000 residential units. The problem should be solved within four to five years. Why should there be 2 to 2.5m dilapidated houses in our villages? Lorestan incident led to the destruction of 40,000 houses. We had to spend hundreds of millions [of tomans] for the reconstruction of the houses. Apart from that, human casualties can never be made up for. When we lose people, we suffer as long as we are alive.
This is possible. In the council that you will set up, you should have two specialized committees, one for villages and one for cities. You will also have certain committees for manpower, construction material, financial resources, urban development, etc. You may create these committees and proceed with the work.
If you manage the work properly, you can reduce the construction costs too. There are some unnecessary costs incurred. In some places, people are taxed, without any reason, several times higher than the normal rates. It has been written in the law that taxes and levies should be approved by the Interior Ministry. However, the law is not always practiced. There are some parts in the country where taxes are introduced and approved by the governor and the interior minister is not informed at all.
You should brief governors and hold meetings with the [local] councils and mayors. You should explain the importance of the work to them and try to involve them in the work. When there is mass construction, local government revenues will increase as well. There is no need to multiply taxes with various excuses. I have heard that in some cities the taxes have increased 60 fold. I don't want to name the places. But this is oppression. It is not right to impose such taxes on people.
It is however the responsibility of the Interior Ministry to stop such actions. Astronomic rates of taxes are imposed on people. The people deserve to have some place to live in. Taxes in some places exceed the cost of construction. This is not good, is it? Such issues should be under control.
Concerning lowering prices, we believe that every province should act independently. We do not want to act in a centralized manner. You should go and work with factories that can introduce prefabricated material or new designs that decrease the weight of buildings. A province that will have at most two-storey buildings for the next 100 years would not need heavy and expensive plans. We can observe how some provinces show that there is not going to be [a need for] six-storey buildings there in near future. Their people believe that the sixth floor is no place to live.
Don't make a hovel and force thirty people to go inside one unit; and claim that you have built housing for people. You [will] destroy their culture and whatever else. Try to the extent possible to provide people with houses or at most construct three or four flats in a building. Those occupying such flats need to know each other to accept to live there. They should be brothers, sisters and cousins to be able to live together. There should not be cultural differences among them so that their culture and privacy is protected.
These issues should be taken into consideration. You can however build inexpensive houses. Some houses may also be developed in dilapidate areas. You may say for example that this dilapidated area is entitled to a 120 per cent extension [building permits issued based on a ratio of land to building], but we will grant a licence for the construction of 180 or 300 per cent of building area. The municipality may then levy taxes or provide incentives as encouragement for people to replace old rundown houses with new and bigger ones. However, you should bear in mind that from here on out you should not transfer the ownership of the land.
By the end of the year, I want you to get to a point where you could tell a young person, who has for example graduated and has completed his military service, when he will have a house of his own. You can do this. You can tell the person that your plot of land is there and you will have your own house in two or three years. These are all possible. Don't think that it is not possible. We should not allow a person to build 300 or 500 houses and sell them to the people. When you grant land on a leasehold basis, you give it to an individual. So a person representing a cooperative should provide you with for example 150 names and you should enter these names into your computer to indicate that those 150 people have received their share [of land]. Then, in the name of those 150 people, you hand over the plot of land to the cooperative. You should set preconditions.
In the beginning, in preparation, you have to go and build the schools and the mosques and so on. It shouldn't be the case that you ask others to build it, with them saying, 20 years later, we've come to build a mosque. The people don't have a place to congregate, to worship, and then they say, We want to build it now. It can be done. Bring these under the heading of preparation. But don't allow heavy costs. Low costs. It really can be done. If you dedicate time to it, these things can be done. There are people who will invest in these sectors. Of course, in rented [housing], they'll probably be more takers. [But] In this arena, too, they're ready to invest. Set a reasonable profit for them, so that they'll take on the construction of a cooperative. Supervise it. Don't let the past repeat itself. Hundreds of cooperatives collected money from people. Went away. Weren't able to finish it at the agreed cost. There were irregularities, abuses. Now the people are left in limbo. They're neither landlords nor do they have the money in their hands. They've given the money and it's gone. They don't have a house either. Sit together and [discuss this]. If you have any questions, raise them. I'll allocate time myself, here, at the Housing Council, so that we can answer you.
Contrary to the views of some friends - and no doubt their views have changed now, at this meeting - you can set the engine of housing rolling this year. Housing is something that's different from a textile plant, a petrochemical plant, a this-or-that plant, where you have to set the industry rolling. Then, you have to go and be connected up over there and connected up over here, and so on. Let me tell you, anyone of you who is able to bring in foreign investment, too, in the field of construction or new technology, go ahead and do so. The Housing Council will just give you the authorization. You will say, we want to sign an agreement with this or that group in this or that country, so that it will get a factory rolling here. If it's kept informed, it will give you the authorization. That you should imagine that a group of people are sitting in the ministry of housing totally devoted to the issue of housing round the clock, running around and ready to solve all these issues, this isn't even possible. Even if they are sympathetic people - and, God be praised, they are - is such a thing even possible? This is Iran after all. Iran is very big. No-one has the sense that I have now of how big Iran is, because everyone [else] understands it on paper, whereas I've gone and seen it with my own eyes. We have seven, eight, ten provinces that are each the size of a big a country. This is the way you need to think. Each one of you should think that you have a country. You have to think and decide on this kind of scale. You shouldn't think that a bunch of people are sitting and taking care of all the country's affairs, big and small, from our villages to here, and we, for our part, can keep an eye on things. No! Imagine that your province is a country and you're its manager, in charge of everything. Manage things on this basis.
You can use these quick-yielding facilities to produce the material or even to produce parts. It's at your disposal after all. Tell them to set up a part-making plant; concrete-beam making; pillar making; reinforced concrete making; mesh making; whatever. You can give part of these [facilities; i.e. loans] to them to set up this sort of thing. Of course, you have to keep an eye on the quality too. I want to underline again, all the water, sewerage, and communications - bring all of this under the preparations committee. Everyone must consider this as his or her own [work]. A movement has to be set in motion in the country.
Don't say, We don't have it. In this Tehran, for example, there is both a great deal of land in the city itself and outside, in the surrounding townships. Don't go and say, We're going to design a township - with just the design and preparation taking 10, 20 years. In these 20 years, Tehran's whole shape has changed. The demand and the models for housing have changed. Now, to be just on the point of saying, Well, what should do now?
Things have to be done quickly. This is why the governor-general steps in, because the governor-general is the head of the province and has the authority. He has the bodies under his jurisdiction. And the Housing Ministry fully supports the governor-general. You have to go and do this. Everything is in your hands.
Of course, as I said, I hope you'll pay sufficient attention to indigenous planning and architecture. My expectation is that, by the end of the year, we'll see that a heavy train is on the tracks and is advancing at a good speed. In other words, a good outlook for the future of housing should be placed before the people.
We can't have this where a young person doesn't even know what's happening now. What's going to happen. Bunches of people turn up. They strike some kind of deal with some of the public and non- public bodies, with people who provide financial resources and so on and so forth. Then suddenly they produce a 30 per cent, 40 per cent, 10 per cent, 60 per cent fluctuation in the housing market. Someone has prepared everything, sold everything he had, is in debt, has sold his wife's dowry, has made things hard for his wife and kids, has put some money together, is going to go and sign the contract tomorrow and get the house. Suddenly, it jumps up by 30 per cent. He's at his wits end now. His life will fall to pieces. We have to do something to create calm. Housing is a place for calm. Now, it's turned into a cause of anxiety for many. However, housing is for calm, for living and calm. It should make people calm. Now, it's turned into a cause of anxiety. You can do it. You have to consider yourselves in charge.
Employment
The second issue is the question of employment, which we discussed together. The issue of employment is very important. Bear in mind, in particular, that people born in [13]59, 60 to 63, 64 [1980-85], when the population growth was 3 per cent, 4 per cent, 5 per cent, are now entering the job market. They've finished their studies, their military service. Now, they're entering the job market. In other words, the demand is going up in an accelerated way. This is the way you have to look at it. Follow this through. Look at things upstream. Many of the units that you've worked for are now getting up and running. A new company has to be created to collect their products, to give them raw material, to take care of marketing. If they need to export, then, export it. Put this kind of support on your agenda this year. They'll come [to you] later and they may, God forbid, fall down.
The next point is the issue of the payment of salaries and benefits. This year, as you know, salaries and benefits will be concentrated in the Economy and Finance [Ministry]. This is a big new decision. The person in charge of a province's financial resources is the governor-general. Now that we've put the Plan and Budget at your disposal, it's you [who is in charge].
We've had one problem up to now. Funds for current spending are put at the disposal of bodies. Costs other than salaries and benefits are paid. In the last three or four months of the year, everyone comes and says: We don't have salaries and benefits. Constant deficits, [budget] addendums - the volume of current spending is going up rapidly. This is very dangerous for the country. We'll all fall down. By 20 per cent, 30 per cent each year. What's going on? We'll soon reach the point where there'll be no money left for development work. There'll be no money for policy making, for subsidies. You have to manage this.
Salaries and benefits are put at the disposal of [changes of] - the Economy and Finance [Ministry] pays it. All the increases and so on go there. They'll deduct it from your funds starting now. The amount that's left in your hands, you need to manage. Whatever you save, part of it will be at you disposal again for giving bonuses and providing services to your employees.
I think it can be done. It is possible to consume little and produce a lot. It really can be done. Some of our systems have become very profligate. Nothing is accounted for. Money for their cars, money for their petrol, money for their water, electricity, fuel, repairs. Never mind about all the stationery - no one even thinks pens and paper are worth anything, although if you add it up for the whole country, you'll see that it adds up to 40bn, 50bn tomans.
A manager - if you can put someone there who thinks well, who knows the administrative system well, who can go from body to body, look at the expenditure and cross things out, saying: No need for this, no need for this, no need for this.
We should give priority to things that support our mission. Whatever is not directly related to our mission should be put aside. Nothing will happen. We should experience this for one year. We should put this on our agenda and pursue it seriously.
We ask some organizations about the number of their personnel and they don't know. Neither the Ministry of Finance and Economic Affairs nor Plan and Budget [Organization] know the exact number of civil servants. Even [government] organizations do not know how many people work there.
We once asked the Ministry of Education to let us know how many people work there. In one report they presented ten different numbers. We asked the same question from another ministry, it gave six different figures. When I review your reports at the provinces, I see that the figures you give on the population of the province on the first page are different from that of the second or eighth page. You should revise these figures and pay attention to the details. This is possible.
All those who receive wages from the government should be registered. Mr Danesh [-Ja'fari, minister of finance] should seriously pursue this issue from all organizations and he should start from his own ministry. There should be an extensive data bank. It should be clear who is working at the electricity office in Birjand today. We should have the information to be able to plan. We should also know how much each person is being paid.
You are responsible to ask organizations about their current budget. You should see how much of the money is being paid on wages and benefits. You should allow that money to be kept at the treasury and the remaining part should be accounted for. You should know why those amounts are spent. Why should an organization spend 170,000 tomans on the recreation and welfare of its employees, while another organization would not even have 30,000 tomans for the same purpose? Is there a difference between employees? Employees are the same. This person is also a human being. He also has children and stomach. He also needs welfare. Prepare accurate statistics and control the costs, so that God-willing the issue would be solved.

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