November 01-2013
The new government has announced it is abolishing the Mehr housing program for the poor, which was the signature program of the Ahmadi-nejad Administration.
Transport and Urban Development Minister Abbas Ahmad Akhundi said his ministry will complete the unfinished Mehr housing projects, but will start no new construction.
The program, launched in 2007, is a home construction program under which the government offers developers free land in return for the construction of cheap residential units for first-time home buyers who receive 99-year mortgages. Under the scheme, the government commissions banks as agents to offer loans to the real estate developers.
Most of the housing is in apartment blocks.
The minister said the project has created problems for the government and the applicants and is not a “good plan” to be continued.
He said 200,000 units lack basic services such as water, gas and sewage systems.
“It is not correct to build houses in unsuitable places and it is not the way to manage the country,” the minister told reporters after a cabinet meeting.
He added that the building of Mehr houses was expected to benefit low-income families but it actually benefited the middle class and “therefore this plan did not meet its goal.”
He did not say what the government would do in place of the Mehr program to address the nation’s housing shortage.
In August, Ali Tayeb-nia, the minister of economy and finance, blamed the Mehr housing program for over-expanding the money supply. He also blamed the Mehr housing policies for runaway inflation and serious budget problems.
Last July, the Ahmadi-nejad Administration announced just before its end that it had handed over the keys to more than 1.18 million low-cost residences under the Mehr program.
Then Transport and Urban Development Minister Ali Nikzad said 1 million more units were under construction and would all be completed before Now Ruz.
