Ministry of Roads and Urban Development
Islamic Republic of Iran
National Report on Slum Conditions and Shelter
Policy: Ir...
ii
In the name of God the compassionate the merciful
iii
Contributors:
Pooya Alaedini, Abbas Mokhber, Mohammad Saeid Izadi, Majid Rousta, Afshin
Mirzababaei, Mohamad Aeeni, Ba...
1
PART ONE: COUNTRY OVERVIEW
1.1 Introduction
Brief history
The recorded history of Iran (previously known as Persia) may ...
2
modern era characterized by centralization of administration, a petroleum-based
industrialization drive, and unprecedent...
3
government initially allocated land to housing cooperatives whose members by
default had been those working for either g...
4
Poverty and inequality
Based on UNDP figures for 2011,3
1.5 percent of the Iranian population lives on less
than 1.25 do...
5
revenues wholly received by the government are circulated in the domestic economy
by government/public sector’s direct s...
6
Turkey in the west, while there is access to the Oman Sea and the Persian Gulf in
the South and the Caspian Sea in the n...
7
Table 1.2: Urban and Rural Population Growth Rates, 1976-2006
Period
Overall Growth
Rate
Urban Growth Rate Rural Growth ...
8
Against the background of a very young population, the steep rise in literacy levels
has been achieved through the stead...
9
Recent urban development and housing trends
The above-mentioned urbanization experience has placed significant pressure ...
10
the corresponding figure is 100 years. Rising home prices and rapid housing market
fluctuations are at least partially ...
11
PART TWO: GOVERNANCE AND PLANNING STRUCTURE
2.3Governance Structure
Form and structure of government
Iran was declared ...
12
Despite centralization, three levels of government may be discerned in Iran –
national, provincial, and local – with th...
13
construction density). In practice, across many cities, much of the land earmarked
for residential construction enters ...
14
conducted at the Interior Ministry,) were supposed to be given (back) to mayoral
administrations.
In practice the scope...
15
Mayoral administrations
Roads & Urban
Development Ministry
Supreme Council of
Urban Planning &
Architecture
Private sec...
16
National development objectives and strategies in relation to urbanization and shelter
The focus and achievements of Ir...
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renovation projects were carried out in urban slums and a few studies were conducted
on informal settlements in this pe...
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was required to initiate the reconstruction and renovation of aged urban fabrics
(including retrofit of buildings to ma...
19
of legal, financial, cultural, and enabling mechanisms with the participation of residents
in the framework of the nati...
20
PART THREE: SLUM CHARACTERISTICS AND REGULATORY ENVIRONMENT
3.1 Slum Typologies
The term “slum” covers a wide range of ...
21
a great deal of overlap. It is also possible to provide the following slum typology in an
attempt to better reflect the...
22
promissory note (qowlnameh or pateh). Therefore, those who purchase this land
are more or less the legal owners of thei...
23
3.2 Informal Tenure Arrangements Commonly Found in the Cities
A relatively significant number of housing units may be f...
24
3.3 Statistics on Slums
There exist relatively good estimates on the size and population of the two official types
of s...
25
the entire urban population in Iran gives us 9.6 million persons for the total informal
settlement population in the co...
26
3.4 Characteristics of Slums in Selected Cities
As mentioned, distressed zones (fabric) have been defined in physical t...
27
Most houses did have kitchen, bath, and toilet, but their overall situation is less
than desirable. Furthermore, some w...
28
relationship between ownership and tendency to repair one’s home. However,
the type of ownership document in the hands ...
29
Table 3.3: Characteristics of Informal Settlements in Eight Provincial Capitals
City total
Informal settlements
Populat...
30
Furthermore, according to the aforementioned study, many of the settlements in the
examined cities are located in hazar...
31
All land is either publicly-owned, privately-owned, or is managed by the Endowments
Organization (Sazmane Owqaf). If a ...
32
permits, thus making it much cheaper than land elsewhere (and a location for the
formation and expansion of informal se...
33
Some of the main strategies and policies on informal settlements specified in this
document are:
General
 …creation of...
34
 Creating a housing and employment fund [and] micro-credit units with financial
participation of local people plus oth...
35
production using advanced industrial technology, upgrade and renovate
distressed urban zones and informal settlements, ...
36
Article 18—In order to realize the aims and programs of this Law, the
government is required to foresee (in annual budg...
37
PART FOUR: SLUM UPGRADING IN PRACTICE AND FUNDING MECHANISMS
4.1 Evolution of Activities in Physically-Distressed Zones...
38
renovation activities concentrated in the city centers (especially historical parts), were
dominated by central governm...
39
Table 4.1: Evolution of Activities in Physically-Distressed Zones
Timeframe
1990-1993:
Upgrading city
centers/cultural ...
40
4.2 Earlier Experience with Informal Settlement Upgrading
A major initiative on Iran’s informal settlements was underta...
41
UUHRP was able to deliver a set of upgrading activities in the informal settlements of
5 target cities using an integra...
42
difficulty of delivering works in informal settlements due to their nature as well as
land acquisition problems.
Projec...
43
(approximately 10 hectares per city). This was the first time specific
government funds were allocated for such a purpo...
44
6. In 2001/2, participation bonds for a total amount of 100 billion rials were
issued (based on the permit provided in ...
45
reorganization and support of housing production and supply, the incentive
package for upgrading and renovating physica...
46
Bandar Abbas, Sanandaj, and Tabriz aimed to improve living conditions in
informal settlements based on community priori...
47
PART FIVE: RECENT PERFORMANCE AND POLICY PROSPECTS
CONCERNING SLUM UPGRADING AND SHELTER PROVISION
5.1 Current Policy
G...
National Report on Slum Conditions and Shelter Policy: Iran 2012
National Report on Slum Conditions and Shelter Policy: Iran 2012
National Report on Slum Conditions and Shelter Policy: Iran 2012
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National Report on Slum Conditions and Shelter Policy: Iran 2012

National Report on Slum Conditions and Shelter Policy: Iran 2012 - First Meeting of the Asia-Pacific Slum Upgrading Working Group Tehran, 2-4 July 2012
Published on: Mar 3, 2016
Published in: Government & Nonprofit      
Source: www.slideshare.net


Transcripts - National Report on Slum Conditions and Shelter Policy: Iran 2012

  • 1. Ministry of Roads and Urban Development Islamic Republic of Iran National Report on Slum Conditions and Shelter Policy: Iran 2012 First Meeting of the Asia-Pacific Slum Upgrading Working Group Tehran, 2-4 July 2012 Ministry of Roads and Urban Development Urban Development and Revitalization Organization
  • 2. ii In the name of God the compassionate the merciful
  • 3. iii Contributors: Pooya Alaedini, Abbas Mokhber, Mohammad Saeid Izadi, Majid Rousta, Afshin Mirzababaei, Mohamad Aeeni, Babak Pirouz TABLE OF CONTENTS PART ONE: COUNTRY OVERVIEW 1.1 Introduction Brief history Recent events as related to urbanization and social programs 1.2 Economic and Social Development Level of development Poverty and inequality Main features of economy 1.3 Geography, Population, and Urbanization Area, topography and climate Demographic characteristics Recent urban development and housing trends PART TWO: GOVERNANCE AND PLANNING STRUCTURE 2.1 Governance Structure Form and structure of government National planning structure and shelter policy 2.2 Urban Planning Urban plans, their scope and extent, and their relation to national plans Influence of central government in relation to municipal/local structures National development objectives and strategies in relation to urbanization… PART THREE: SLUM CHARACTERISTICS AND REGULATORY ENVIRONMENT 3.1 Slum Typologies 3.2 Informal Tenure Arrangements Commonly Found in the Cities 3.3 Statistics on Slums 3.4 Characteristics of Slums in Selected Cities 3.5 Land Use Regulations, Property Ownership Laws, and Shelter Legislation Land use Legal aspects of formal tenure Regulations concerning tenure security and eviction Laws related to informal settlements Shelter legislation PART FOUR: SLUM UPGRADING IN PRACTICE AND FUNDING MECHANISMS 4.1 Evolution of Activities in Physically-Distressed Zones 4.2 Earlier Experience with Informal Settlement Upgrading 4.3 Funding for Slum Upgrading Financing Revitalization of Physically-Distressed Zones Financing Informal Settlement Upgrading PART FIVE: RECENT PERFORMANCE AND POLICY PROSPECTS CONCERNING SLUM UPGRADING AND SHELTER PROVISION 5.1 Current Policy 5.2 Current Activities Concerning Physically-Distressed Urban Fabric 5.3 Current Activities Concerning Informal Settlements 5.4 Low-Income Housing Provision
  • 4. 1 PART ONE: COUNTRY OVERVIEW 1.1 Introduction Brief history The recorded history of Iran (previously known as Persia) may be traced back several thousand years to the appearance of some of the oldest-known cities under the Elamite and Jiroft civilizations. The establishment of the Persian Empire by Cyrus the Great in 559 BCE marked the birth of a unified land with a thriving network of urban centers controlled from Pasargadae and Persepolis. Following the invasion of Alexander of Macedon and a transitional period of Seleucid rule, Parthians reestablished Iranian sovereignty in the country. They were followed by Sassanids who created a sophisticated centralized administration and urban culture in Iran and gave Zoroastrianism the status of official state religion. Arab-Muslim forces invaded Iran in 639 CE. Following this event, Iran became part of the Muslim Empire and the majority of the population converted to Islam. A series of independent Persian or Persianate kingdoms controlling Silk Road’s bustling towns in the ninth through the twelfth centuries strengthened the Iranian identity and made the New (or Dari) Persian language a regional lingua franca and literary language. Iranian urban centers of this period had large populations relative to medieval standards and fostered significant economic activity as well as science and art. Between the thirteenth and the fifteenth centuries, despite large-scale disruptions caused by nomadic invasions from Central/Inner Asia as well as periodic dynastic shifts, Iran’s Silk Road towns remained important commercial and productive centers. The rebirth of the Iranian nation is generally traced back to the 16th century establishment of the Safavid House who declared Shia Islam the official state denomination and gave considerable patronage to intercity commerce and urban architecture. Possibly due to world-systemic shifts and the rise of European commercial (and eventually industrial) powers, Iran underwent a gradual economic decline starting in the eighteenth century with ramifications for its urban populations and their productive activities. The country witnessed a modernist revolution in the first decade of the 20th century which resulted in a constitutional form of monarchy. This event together with the discovery of oil in Khuzestan set the stage for Iran’s
  • 5. 2 modern era characterized by centralization of administration, a petroleum-based industrialization drive, and unprecedented urban development. Starting in the 1960s, rapid urbanization due to rural out-migration, high birth rates, and improved life expectancies outpaced the development of modern economic sector in the cities. Slum enclaves began to appear across Iranian urban landscape, and their plight arguably had a significant influence on the 1979 Revolution that toppled the monarchy and established the Islamic Republic in its place. Recent events as related to urbanization and social programs Since the Islamic Revolution, the Iranian government has placed special emphasis on human development, social protection, and “social justice.” Significant investments have been made in the social sector over the last three decades with virtually full coverage of the elementary and higher level education, extensive health coverage, and an active distributive strategy through direct transfers and indirect subsidies. A number of government and non-governmental organizations (including State Welfare Organization and para-governmental Imam Khomeini Relief Foundation) have been active in providing social security through cash transfers, training, insurance, and other programs. The Ministry of Welfare was established to coordinate all welfare-related activities in the country. While this process is still in the making, the recently-established entity itself has been integrated with two others to form the Ministry of Labor, Cooperation and Social Welfare. Other than explicit subsidies and transfers, Iran has maintained a very large implicit subsidy system that is untargeted. Sighting this as a major problem, the government has recently replaced a major part of the untargeted subsidies with direct cash transfers to every Iranian household. A major characteristic of Iran’s economy since the 1960s has been its strong dependence on oil revenues. While oil revenues provide the hard cash needed for accelerated economic growth, they also result in a number of structural problems that hinder development. The availability of significant oil revenues has promoted capital intensive production and import-based commercial activities that preclude adequate employment generation on the one hand and land and housing speculation on the other. This structure is manifested in urban areas by perpetual housing and land shortages and the growth of slums. To alleviate these urban problems, the
  • 6. 3 government initially allocated land to housing cooperatives whose members by default had been those working for either government/public sector agencies or medium to large size private enterprises. Yet considering the significant size of employment in the private-sector micro and small enterprises, the bulk of the low- income population did not benefit from such programs. In recent years, the main government policy initiatives have included a housing program called “Mehr” and a set of urban upgrading activities that are discussed in this report. 1.4Economic and Social Development Level of development Based on World Bank figures,1 Iran’s gross domestic product (GDP) stood at $331 billion in 2009 having grown at an average annual rate of 3.1 percent during the last decade of the 20th century and at an average annual rate of 5.4 percent in the first decade of the 21st century. However the latter respectable growth has slowed down in recent years and it was recorded at 1.8 percent in 2009. According to figures available from the United Nations Development Programme (UNDP) database,2 Iran’s GDP per capita stood at 10,496 dollars in PPP terms in 2011. Furthermore, Iran has a medium level of human development. Its Human Development Index (HDI) improved from 0.437 in 1980 to 0.707 in 2011. In the latter year, its education index reached a value of 0.64, its literacy rate for both sexes stood at 85 percent, its combined gross enrolment for both sexes was 69.9 percent, and its public expenditure on education comprised 4.7 percent of its GDP. While the mean number of schooling for both sexes was recorded at 7.3 years and the ratio of female to male populations with at least secondary education was estimated as 0.682 in the same year, there has been a steady expansion of tertiary level education and female students have outnumbered male students at colleges and universities by a large margin in recent years. UNDP figures for 2011 on health index, life expectancy at birth, and public expenditure on health in Iran are 0.836, 73 years, and 3 percent of GDP respectively. 1 “Iran, Islamic Rep. at a Glance,” accessed from www.worldbank.org on May 24, 2012. 2 Data accessed from www.undp.org on May 20, 2012.
  • 7. 4 Poverty and inequality Based on UNDP figures for 2011,3 1.5 percent of the Iranian population lives on less than 1.25 dollars per day. For the same year, inequality adjusted life expectancy is 0.71, gender inequality index is 0.485, and income Gini coefficient is 38.8. Using 2006 census data from the Statistical Center of Iran (SCI),4 the Gini coefficient for 2007-2008 may be calculated as 0.405. Furthermore, based on SCI figures, the average income of urban households in the lowest three deciles is less than half of the average for all urban household while the average income of the highest decile is 15.2 times that of the lowest income decile.5 Main features of economy Iran is the second largest producer among the member states of the Organization of Petroleum Exporting Countries (OPEC) and its economy is thus characterized by a large oil sector. Its GDP composition for 2010-2011 is provided in Table 1.1. Table 1.1: Composition of GDP, 2010-2011 (Iranian Calendar Year 1389) Sector Petroleum Agriculture Industry & Mine Construction Services Percent 22.7 10.2 12.6 5.7 51.1 Source: Central Bank of Iran There is limited information on Iran’s informal economy. By some estimates it may comprise between one fourth and one third of all economic activities. While some efforts have been made toward privatization, the government remains the largest actor in Iran’s economy, controlling the petroleum industry, having major stakes across all sectors, and employing a bulk of service sector employees. Due to fluctuations in oil prices, Iran’s economy experiences a great deal of volatility. All sectors of the economy are affected by the oil receipts. High levels of oil receipts usually usher in a period of intense activity across all other sectors but may also lead to undesirable changes in the economic structure and possibly to Dutch Disease (sharp increases in the price of non-tradables with detrimental impacts on the production of tradables) accompanied by high rates of inflation or stagflation. Another aspect of the oil-based economy is the distribution of oil revenues. Oil 3 Ibid. 4 SCI, “Household Income and Expenditure” data, 2007-2008. 5 Pajuheshkadeye Towse’ye Karbordi, “Pishnevise sanade rahbordie behsazi va tajdide hayate bafthaye farsudeye shahri,” report prepared for UDRO, 2011.
  • 8. 5 revenues wholly received by the government are circulated in the domestic economy by government/public sector’s direct spending and investment, payment of salaries and wages, and provision of subsidies to either consumption or production. A highly uneven distribution may result in practice. The government has attempted to remedy this through the provision of untargeted subsidies in the past and direct transfer payments to every household in recent times (attempts are now being made to restrict transfer payments to low-income households only). Yet, large transfer payments in an environment of high inflation and low absorption capacity may themselves be problematic. Indeed Iran has experienced two-digit inflation rates throughout the last decade and its rate of inflation for 2010-2011 (1389 compared to 1388 according to the Iranian calendar) was officially reported as 12.4 percent.6 Land and housing prices have increased more drastically over the past decade and a half. Measures to address inflation by rushing in imports in an unmanaged manner may have in turn hurt domestic production (and are not possible for the case of land and housing). As mentioned, while the annual growth of GDP picked up in the mid 2000s (due to increased oil prices), it has slowed down in the last 2-3 years. Furthermore, due to an array of economic difficulties including a devastating eight year war in the eighties, economic and planning volatility, high rates of population growth in the past, and trade and financial sanctions in more recent times, per capita incomes have remained stagnant in real terms over the past three decades. Related to this are problems associated with double digit unemployment rates (officially reported as 13.5 percent7 for 2010-2011). Thus, uneven distribution of income and wealth notwithstanding, Iranian households have been experiencing stagnant incomes, high rates of inflation (which is especially significant for the case of land and housing), and high rates of unemployment. 1.5Geography, Population, and Urbanization Area, topography and climate Iran covers a land area of 1.6 million square kilometers and borders Turkmenistan, Azerbaijan, and Armenia in the north; Afghanistan and Pakistan in the east; Iraq and 6 Central Bank of Iran, “Economic Indicators, No. 63,” 2010-11 (in Persian). 7 Ibid.
  • 9. 6 Turkey in the west, while there is access to the Oman Sea and the Persian Gulf in the South and the Caspian Sea in the north. It enjoys a diverse climate, although a large part of the country is semi-arid or arid. Two significant mountain ranges cross the country, making up the Iranian plateau. The Caspian region in the north receives significantly higher precipitation than the rest of the country. The diverse climatic conditions mean that a wide range of agricultural produce can be farmed in Iran. Demographic characteristics Iran’s total population was estimated as 74.7 million in 2010 (53.6 million or 71.75 percent urban and 21.1 million or 28.25 percent rural) resulting in a population density of 45.3 persons per square kilometer. Population densities and urbanization (size and number of urban centers) are much lower in the south and east as compared to north and west due to the differences in the precipitation rates between the two halves of the country. Iran has experienced a rapid pace of urbanization in the past three decades. Based on Census figures,8 its total population grew at an average annual rate of 2.4 percent from 33.7 million to 70.5 million persons from 1976 to 2006 (see Table 1.2). The urban population of Iran grew at an average rate of 3.7 percent from 15.8 million to 48.2 million persons (68.4 percent of total) in this thirty year period. The highest growth rates were registered in the first decade of the period (due to the post-revolutionary baby boom affecting the whole population as well as the war which accelerated rural-urban migration) whereas this growth rate decreased to an average of 1.6 percent per annum in 1996-2006. Furthermore, as a result of rural-urban migration and reclassification of expanding villages as towns, the growth rate of the rural population has been negative. The number of cities and towns grew from 614 to 1014 between 1996 and 2006. While over half of these cities/towns have populations of 50,000 persons or fewer, 80 Iranian cities have populations over 100,000 persons, accounting for 17 percent of the total population of the country. Furthermore, around 53 percent of Iran’s urban residents live in cities with populations of 250,000 persons or more and another 17 percent are found in 100,000-250,000 person towns. The volume of rural-urban migration in the period 1996-2006 has been estimated as 4.2 million persons, a great potion of which has been absorbed by cities of over 100,000 persons (Statistical Center of Iran, 2008). 8 SCI, Statistical Yearbook of Iran, 2008.
  • 10. 7 Table 1.2: Urban and Rural Population Growth Rates, 1976-2006 Period Overall Growth Rate Urban Growth Rate Rural Growth Rate 1976-1986 3.8% 5.3% 2.3% 1986-1991 2.4% 3.4% 1.3% 1991-1996 1.4% 2.9% 1.1% 1996-2006 1.6% 2.7% -0.4% 1976-2006 2.4% 3.7% 0.7% Source: Based on figures from SCI, Statistical Yearbook of Iran, 2008. While the earlier rapid population growth has subsided and life expediencies have increased significantly in recent years, the Iranian population remains very young. Table 1.3 provides information on the changes in the average age of the population in urban and rural areas for both sexes in a period of one decade. Figure 1.1 compares Iran’s population pyramids in 1996 and 2006. Table 1.3: Average Age of Population Year Total Urban Rural M & F M F M & F M F M & F M F 1996-7 24.03 24.15 23.9 24.52 24.66 24.38 23.25 23.34 23.17 2006-7 27.99 28 27.98 28.33 28.4 28.27 27.24 27.36 25.16 Source: SCI, data accessed from www.amar.org.ir on May 23, 2012. Figure 1.1: Population Pyramids in 1996 (gray) and 2006 (white) Source: Based on Census data from Statistical Center of Iran As indicated in Table 1.4, literacy levels have been steadily rising in the last few decades. Notwithstanding gender disparities, literacy rates have improved in both rural and urban areas and this rise has been quite steep over the last 20 years.
  • 11. 8 Against the background of a very young population, the steep rise in literacy levels has been achieved through the steady improvement in the percentage of children attending school. In a sense, the relatively young age of the population has served to enhance the country’s overall literacy rate. Furthermore, normative literacy has increased faster among girls and women in both urban and rural areas and the overall gender literacy gap has narrowed. Interestingly, tertiary level education has expanded more rapidly for women as compared to men, so that in the academic year 2006-2007 there were 1,346,274 male and 1,482,237 female college and university students in the country.9 Table 1.4: Literacy Rates Year Total Urban Rural M & F M F M & F M F M & F M F 1976-7 47.5 85.9 35.5 65.5 74.4 55.6 30.5 43.6 17.3 1986-7 61.8 71 52.1 73.1 80.4 65.4 48 59.9 36 1996-7 79.5 84.7 74.2 85.7 89.6 81.7 69.3 76.5 62.1 2006-7 84.6 88.7 80.3 88.9 92.9 85.6 75.1 81.1 68.9 Source: SCI, data accessed from www.amar.org.ir on May 23, 2012. Ninety nine percent of Iranians are Muslims, the majority of whom follow the Jafari Shia branch of Islam (also known as Emami or Twelver Shi’ism). There are significant numbers of Sunnis and smaller numbers of other branches of Shi’ism (other than Jafari). Other officially recognized religions in Iran include Christianity, Judaism, Zoroastrianism, and to some extent Mandaeanism. Most Iranians speak an Iranic language, which is a branch of the Indo-European family of languages. Among these, Persian (known as Farsi-ye Dari, Farsi, Dari or Tajiki in the language itself) is the official medium of communication in the country and is used and understood by most Iranians. While no reliable estimates exist, probably around 60 per cent of the population speaks Persian as a first language. Other Iranic languages or dialects spoken in Iran include Caspian dialects, Kurdish languages/dialects, Lori/Bakhtiari dialects, and Baluchi. Turkic (mostly Azarbaijani) is probably spoken by about 25 per cent of the population as a first language. There are also speakers of Semitic languages in Iran, including Arabic and neo-Aramaic. Armenian is spoken by Armenian Christians. 9 SCI, data accessed from www.amar.org.ir on May 23, 2012.
  • 12. 9 Recent urban development and housing trends The above-mentioned urbanization experience has placed significant pressure on urban service and housing provision. There has been a persistent gap between the number of housing units and the number of households the country. This gap does not equal shortage but is indicative of it. Based on the 2006 Census, there were 1.5 million more households than housing units. Yet, the same Census figures indicate that 500,000 housing units were vacant in 2006.10 This means that housing shortages notwithstanding, there may be a mismatch between what the market potentially supplies and what lower-income households demand. There is also a big gap between average demand for square footage of housing by households and the larger size housing units available in the market.11 Indeed, a major characteristic of Iranian cities is the dual housing market. In the past decade and a half, the price of housing across all urban areas in Iran has skyrocketed due to the fact that at last a part of the economy has done well (and real estate has traditionally been a place where people have tended to put their money). Therefore, in all cities, a portion of the population pay premium prices for desirable real estate while some others have to settle in slums (although this does not mean that the price of housing in the low- income neighborhoods has stagnated). Indeed, an important factor related to above observations, which is most likely impacting trends related to informal settlements, is affordability as experienced by real consumers. Housing costs as a portion of total household expenditures have been on the rise in Iran, especially among households in the lowest consumption deciles. The drop in home ownership rate from 70.7 percent in 1986 to 63.4 percent in 2006 may be thought of as a reflection of this development. It is estimated that 22.7 percent of urban households can only afford 14-35 square meters of housing while the housing affordability range for another 24 percent is 43-50 square meters. Based on findings from the Comprehensive Housing Plan (also called Housing Master Plan), the average time it will take households in the two middle consumption deciles to purchase a house is 18 years, provided that they save one third of their income per month for this purpose. For households in the lowest consumption decile 10 Source: SCI, Statistical Yearbook of Iran, 2008. 11 Minou Rafii (2003) “Housing Economics,” in Eqtesade Maskan, edited volume published by National Organization for Land and Housing, Tehran (in Persian).
  • 13. 10 the corresponding figure is 100 years. Rising home prices and rapid housing market fluctuations are at least partially due to macroeconomic shifts. Furthermore, the dual nature of housing demand – for shelter and investment – makes the housing market more susceptible to macroeconomic shifts. In Iran, around 41 percent of the demand for housing was attributed to seeking an investment opportunity between 1988 and 2002. The corresponding figure was calculated as 59 percent for the period 2000- 2001. The high demand for housing as an investment has a reinforcing impact on home prices but a negative effect on the housing possibilities of the low-income groups.12 12 Ibid.; Ministry of Housing and Urban Development, Housing Master Plan, 2006.
  • 14. 11 PART TWO: GOVERNANCE AND PLANNING STRUCTURE 2.3Governance Structure Form and structure of government Iran was declared an Islamic Republic in 1979 following a national referendum. The Supreme Leader, chosen by the Council of Experts, itself an elected body, has the highest authority within the state. An elected president, head of the executive branch, nominates the cabinet, which is currently composed of 18 ministers (as shown in Figure 2.1) to be endorsed by the legislative. The president also selects the heads of several highly important organizations, such as Strategic Planning and Control (formerly a more independent Management and Planning Organization), Environmental Protection, and Atomic Agency as his deputies. The legislative branch of the state is led by two institutions − the Majles or Parliament and the Guardian Council of the Constitution. All legislation passed through parliament must be approved by the Guardian Council in order to become law. The judiciary is independent of both the legislative and the executive branches of the government and answers directly to the Supreme Leader. Figure 2.1: Government Ministries in Iran Directly Responsible for Urban Affairs Roads and Urban Development; Interior Responsible for Basic Urban Services Energy; Communication and Information Technology; Education; Health; Culture and Islamic Guidance; Labor, Cooperatives and Social Welfare Responsible for Important Urban Services Industry, Mines and Commerce; Youth and Sport Other Finance and Economic Affairs; Justice; Agricultural Jihad; Defense; Intelligence; Foreign Affairs Administration in Iran is centralized and provincial officials are appointed by the central government. There are 31 provinces, around 300 sub-provinces, and close to 800 counties in Iran. Provincial governors are selected by the central government and their letters of appointment are signed by the Minister of Interior. They are the most important actors at the provincial level, responsible for coordinating all provincial activities that are executed in a top-down manner. At the same time, provincial service agencies are controlled by their respective ministries.13 13 K. Tajbakhsh, “Municipal Management and Decentralisation Study: Iran,” The World Bank Regional Municipal Management and Decentralisation Project, 2003.
  • 15. 12 Despite centralization, three levels of government may be discerned in Iran – national, provincial, and local – with the latter comprising county, city (municipality/mayor), and village (sub) levels. At the county level the governorate/governor (farmandar/farmandari) is in charge while cities are managed by the mayoral administration/mayor (sharhdari/sharhdar). The village authority is called dehdari in Iran. National planning structure and shelter policy Iran follows a five-year development planning cycle. These national development plans are the most important documents specifying social, economic and cultural programs to be pursued over a five-year period. The Presidential Deputy Office of Strategic Planning and Control is now responsible for drafting the five-year national plans as well as other medium and long term plans, preparing annual budgets, and monitoring the execution of plans. A total of 5 five-year national development plans have been initiated in Iran since the 1979 Revolution and 4 have been completed. In earlier years, post-revolutionary and war upheavals, displacement of a large number of people, and various political prerogatives had an impact on both the formulation of these plans vis-à-vis shelter needs and their implementation. 2.4Urban Planning Urban plans, their scope and extent, and their relation to national plans Comprehensive and detailed plans (for small towns, combined initiatives called guidance plans) are prepared for Iranian cities on a regular basis – theoretically every 10 years. Together, these plans essentially determine the official municipal boundaries, land use, and lay out of streets. While they are also supposed to link to the urban economy on the one hand and financial resources of the municipality on the other, they have been criticized for erroneous forecasts as well as for being no more than a wish list prepared in the form of maps. Indeed many details of such plans never materialize. While some level of zoning may be discernible in the more recent comprehensive/detailed plans, the central practice is to mark each individual lot for a certain land use (including the ratio of built floor area to the lot area, called
  • 16. 13 construction density). In practice, across many cities, much of the land earmarked for residential construction enters the speculative market and is hoarded, whereas land outside the municipal boundaries attracts informal settlements. Another issue is the so-called sale of construction density (tarakom-forushi). As a result of municipal funding shortages in many of the larger cities in Iran, particularly in Tehran, mayoral administrations practice the sale of extra construction density and the change of land use, nullifying to some extent the original intention of the plans. Despite all this, comprehensive and detailed plans remain the most important guidelines for urban development in Iran. More localized plans are prepared for certain areas of the city (tarhe mowze’i) or for a certain issue in the city (tarhe mowzu’i). There are regional and spatial plans in Iran as well that are considered intermediate between urban plans and the national plan. These include metropolitan area plan (tarhe majmu’eye shahri), provincial physical plan (tarhe kalbadie ostani), national physical plan (tarhe kalbadie melli), and territorial preparation plan (tarhe amayeshe sarzamin, which is again a spatial plan but different from the national physical plan). Influence of central government in relation to municipal/local structures Municipal councils allow for democratic representation at the city level. Municipal council members are directly elected by city residents and are responsible for nominating the mayor. Yet, line agencies in charge of urban service provision in the cities (e.g., water and sewerage, electricity, gas, and communication) are local arms of their respective ministries. Thus, the scope of activities performed by municipal authorities (councils and mayors) is rather limited. The Municipalities Law, dating back to the earlier part of the twentieth century, originally authorized 53 sets of duties for mayoral administrations. However, in subsequent periods, many of these duties were taken over by the central/provincial government/governmental organizations, so that in recent years mayoral administrations have only performed 21 sets of duties with another 7 duties jointly managed by them and governmental organizations.14 Based on the Third Development Plan (2000-2004), a number of municipal responsibilities (potentially up to 22, according to one internal study 14 Kazemian, Gholamreza and Navid Saidi-Rezvani, Emkansanjie vagozarie vazayef jaded be shahrdariha [Feasibility of delegating new duties to mayoral administrations], Modiriyate shahri va shahrdariha dar Iran, Tehran: Entesharate sazmane shahrdariha va dehdariha, 1381 [2002].
  • 17. 14 conducted at the Interior Ministry,) were supposed to be given (back) to mayoral administrations. In practice the scope of the above re-delegation initiative has been very limited. This said, the institutionalization of directly-elected municipal councils in the last decade has resulted in some degree of devolution (in light of their authority and responsibility vis-à-vis the mayoral administration and the mayor). Whereas prior to the late 1990s, mayoral administrations were integrated in the structure of Interior Ministry and the national government, they are now considered to be a “public sector” institution monitored by municipal councils as representatives of the urban residents. The authority of municipal councils has nonetheless been limited due to the legal ambiguities surrounding their position and activities. Ministry of Roads and Urban Development (MRUD) and Ministry of Interior (MI) are the main national-level, urban development actors, with local arms in every city. MRUD wields authority over the development of city plans while MI supervises city administration and funds certain urban projects. The Municipalities Organization was established in 2002 to coordinate the development of urban infrastructure and delivery of urban services through the Ministry’s Office of Development. The Cultural Heritage, Tourism, and Handicraft Organization also plays an important role in planning for urban areas of architectural/cultural/historical value. Figure 2.2 summarizes the relationship between various levels of government and the public sector from the standpoint of urban development. The main government body responsible for slum upgrading is the Urban Development and Renovation Organization (UDRO) which is organized as a company (thus more appropriately called Urban Development and Renovation Corporation). It is headed by a Deputy Minister of Roads and Urban Development. UDRO’s relationship with other urban- related agencies may be observed in the table as well.
  • 18. 15 Mayoral administrations Roads & Urban Development Ministry Supreme Council of Urban Planning & Architecture Private sector institutions and corporations: banks, consulting firms, investors, developers, financial institutions Relevant Ministries: Communication and Information Technology, Energy, etc. President Cultural Heritage, Tourism and Handicraft Organiz. Endowments Organization Article 5 Provincial Commission s Provincial Organizations: Water and Sewerage, Electricity, Gas, Cultural Heritage, Environment, Roads, Endowments, Municipalities Organization Interior Ministry Provincial governorate: Deputy for Coordination and Development Deputy for Strategic Planning and Control Municipal Councils Deputy for Strategic Planning and Control Planning for transport, urban development, architecture, housing and construction Affiliated organizations and corporations: National Organization for Land and Housing, New Towns Development Corporation, Urban Development and Revitalization Organization (Corporation), Executive Organization for the Construction of Government Buildings and Public Facilities Office for Upgrading Distressed Urban Fabric Provincial Physical Development and Housing Corporation )‫استان‬ ‫عامل‬ ‫(هیات‬ Figure 2.1: National-to-Local Structure of Urban Management
  • 19. 16 National development objectives and strategies in relation to urbanization and shelter The focus and achievements of Iran’s planning structure in areas of shelter and slums are explained below: 1979-1989 (ad hoc planning): In the immediate post-revolutionary period, the prevailing regulatory environment both limited legal ownership of land and ignored land takeovers including squatting. At the same time various post-revolutionary obstacles including budget shortfalls precluded adequate attention to urban development. Supply of new housing dropped from 300,000 to 110,000 formal units per year. This situation was exacerbated by a rapid population growth and a significant volume of migration to the cities (partially as a result of the war). All these gave impetus to the expansion of urban slums.15 1989/90-1993/4 (First Post-revolutionary Plan): The actual plan was not endorsed by the Majles, although many of its provisions were followed in practice. This period coincided with the post-war reconstruction efforts. A set of structural adjustment measures was pursued by the government as the main economic strategy. In the housing sector, initiatives toward privatization and deregulation were carried out together with measures to prevent informal construction and control rural-urban migration. This period witnessed the largest volume of housing and land subsidies and transfers allocated by the government in the Iranian history. These subsidies and transfers were for the most part nontransparent and untargeted. During the whole period, 1.5 million formal housing units were built which amounted to 75% of the planned 2 million units. Furthermore, while annual construction of homes reached 309,000 formal units per annum, the urban population doubled during the period. Either in spite of government policies or as their consequence, the price of land, housing, and urban services gradually increased. This was accompanied by the expansion of slums. Slum areas also received population overflows from other parts of their respective cities due to the prevailing socioeconomic conditions. At the same time a number of ad hoc 15 Ministry of Housing and Urban Development, Comprehensive Housing Plan, 2006 (in Persian).
  • 20. 17 renovation projects were carried out in urban slums and a few studies were conducted on informal settlements in this period.16 1995/6-2004/5 (Second and Third Post-revolutionary Plans): The main housing policy approach in this period was dubbed “PAK” which means clean in Persian and is an acronym for “saving, mass production, and small units.” These were to be achieved through market mechanisms and reduced government intervention. Construction of social housing (50 square meter units), protected housing (74 and 100 square meter units respectively in metropolitan cities and smaller towns) and free housing (without floor area constraints) were facilitated by the government by freeing the land market and decreasing subsidized land transfers as well as by involving private financial institutions, floating banking interest rates, and increasing the ceiling of housing loans. A total of 1.8 million formal housing units or 91.9 percent of those planned were actually built during this period. Yet, this achievement was mainly due to the success of the free housing subsector since only 60 percent of the planned social housing units were actually constructed. Furthermore, the expansion of slums and migration to cities and peri-urban areas gained the attention of the government in serious ways during the Second Development Plan, although the main public policy focus was on physical rehabilitation in the initial stages. Most importantly, the Urban Development and Rehabilitation Organization was established in this period to eventually deal with slums in Iran (see Part Three of the report for the two types of slums officially recognized in the country, namely distressed fabric and informal settlements). This led to the adoption of a national document on Strategies for Regularizing Informal Settlements, activating Regional Housing Companies, and rehabilitating an area of 600 hectares across Iranian cities on a project basis.17 2005/6-2009 (Fourth Development Plan): Several important slum-related provisions were included in the Fourth Plan Law. Revitalizing stressed zones and regularizing fringe zones (informal settlements) through an enabling approach are the most important of these. In particular, using internal and external sources, the Government 16 Ibid. 17 Ibid.
  • 21. 18 was required to initiate the reconstruction and renovation of aged urban fabrics (including retrofit of buildings to make them earthquake-resistant) and complete them within ten years. In practice, however, major problems surfaced in coordination among various agencies relevant to slum upgrading. Yet, among the most important developments toward the end of this period were the regulations governing intervention in the distressed fabric of urban areas ratified by the Supreme Council of Architecture and Urban Planning. Concerning shelter, the Ministry of Housing and Urban Development (now Ministry of Roads and Urban Development) was required to carry out the Comprehensive Housing Plan (prepared in this period), including: strengthening housing cooperatives as well as charity and non-governmental organizations; taking an integrated land management approach for the purpose of housing provision; creating a secondary mortgage market; increasing mass construction; expanding housing capital markets; supporting non-governmental players active in the provision of housing to vulnerable groups; attracting foreign investment to the housing sector; providing subsidies to builders with the aim of housing provision for low-income groups, white- and blue-collar workers, and female-headed households.18 2010/11-2014/15 (Fifth Development Plan): Based on Article 171 of the Law of the Fifth Plan, the Ministry of Housing and Urban Development (now Ministry of Roads and Urban Development) and mayoral administrations (municipalities) are required to reconstruct and revitalize 10 percent of physically-distressed urban areas each year. The required funding for this endeavor is to be proposed by the Ministry yearly and included in the annual national budgets. Furthermore, the government is required to allocate at least 50% of housing funds, credits, and facilities, including those for the Mehr Housing Plan as well as housing for the youth and those in need, to the distressed fabric (although it is not clear through which institution, mayoral administration or any other, these funds should be allocated). Furthermore, Article 172 of the Law of the Fifth Plan addresses “fringe areas [manateqe hashiyeneshin]”. According to this article, such areas when inside the city boundaries and designated by the Supreme Council of Urban Planning and Architecture should be regularized through the formulation and realization 18 “Law of the Fourth Economic, Social and Cultural Plan,” 2005.
  • 22. 19 of legal, financial, cultural, and enabling mechanisms with the participation of residents in the framework of the national document on “Enabling and Regularizing Unpermitted Settlements.” Also, provisions are supposed to be made to prevent formation of settlements outside city boundaries by controlling the expansion of peripheral villages and destroying illegal construction with the assistance of the Judiciary. Abandoning the Comprehensive Housing Plan, the sole means of housing provision to low-income households is now the Mehr Housing Plan.19 19 “Law of the Fifth Economic, Social and Cultural Plan,” 2010.
  • 23. 20 PART THREE: SLUM CHARACTERISTICS AND REGULATORY ENVIRONMENT 3.1 Slum Typologies The term “slum” covers a wide range of urban settlements, and its definition often varies from one country to the next. It may be thought of as generally referring to urban areas where residents have comparatively lower qualities of life and fewer opportunities due to the physical and economic as well as socio-cultural and legal characteristics of the built environment. Slums are often associated with lack of access to potable water, health facilities, and other urban infrastructure as well as high density, low quality construction, and/or lack of land and housing tenure. Two types of slums, namely, distressed fabric (baft-e farsudeh) and informal settlement (sokunatgah-e gheyr-e rasmi) have been officially recognized in Iran in the past decades. According to the definition advanced by the Supreme Council of Urban Planning and Architecture, distressed fabric is characterized by micro land divisions (less that 200 sqm for more than 50 percent of the lots), impenetrability (less than 6 m wide alleys in 50 percent of cases), and lack of sustainability (lack of structural integrity in more than 50 percent of buildings). Depending on the existence of one or more of these conditions, the area is considered relatively distressed, highly distressed, or extremely distressed. Furthermore, the national document on Strategies for Enabling and Regularizing Informal Settlements addresses urban areas with the following features: “Hastily constructed housing often built by their eventual occupants, mostly without permit to construct…outside existing formal planning…; Concentration of lower income groups…with functional linkages to the main city…; [and]… low quality of life and desperately low urban services…and high population density.”20 While distressed fabrics and informal settlements for the most part have been addressed in separate programs and by separate agencies in Iran, their definitions have 20 Urban Development and Rehabilitation Organization, “Strategies for Enabling and Regularizing Informal Settlements,” 2004.
  • 24. 21 a great deal of overlap. It is also possible to provide the following slum typology in an attempt to better reflect the Iranian context. 1. Areas located in the historical/central parts of Iranian cities that have been experiencing steady physical, economic, and social decline: These older areas might have been low-income neighborhoods for a very long time or have become such in a more recent downward disinvestment spiral whereby: i) Poor households have remained in the neighborhoods with narrow, meandering alleys and old houses. ii) Better off households have moved elsewhere in the city with better streets and avenues (more upscale) in which they can live in newer houses. iii) Some of the new arrivals (poor households) also go to the older neighborhoods, essentially replacing the better off ones who are leaving. iv) The municipality does not provide services to these neighborhoods on a par with more affluent settlements party due to the former type of neighborhoods’ physical attributes. Such neighborhoods may contain no building of historical significance, a single historical building (bana), a set of connected or disconnected historical buildings (majmu’eh), or a relatively large area of historical significance (arseye tarikhi), each warranting a different intervention strategy to capitalize on its (cultural heritage) assets. 2. Slums located outside official city boundaries: This is the classic case of the newer types of neighborhood formed when migrants from outside the urban area (often rural areas) or poor households already in the city, who cannot afford regular types of housing offered in the formal market, purchase land in the informal land market in areas just outside the city boundary. This is quite possible in Iran since much of the land on the fringes of the cities is owned privately. What makes this type of land attractive is exactly the fact that it does not have proper plot division or construction permits, thus making it much cheaper than land elsewhere. Some documentation is provided for the transaction, such as a
  • 25. 22 promissory note (qowlnameh or pateh). Therefore, those who purchase this land are more or less the legal owners of their plots, although they lack construction permits and full titles. Construction on such sites therefore tends to take place at night and illegally. These slums are not recognized by the municipal authorities although they may get some urban services. 3. Slums formed in villages located just outside city boundaries: This is a special case of the previous type with the difference that the slum has previously been a village with agricultural or related functions. Yet, due to its proximity to the city it has attracted low-income households unable to afford housing in the city. 4. Slums recently incorporated into the cities: The nucleus of these slums may be former villages or just cheap land outside city boundaries occupied by low- income households. Incorporating them has been one way to provide them with basic services. Considering how these types of neighborhoods start, even when they are incorporated into the city, they are slums (land divisions are not proper, housing stock is of poor quality, etc.). Therefore, even these types of neighborhoods go through the downward spiral similar the older types of neighborhood described above. 5. Squatter settlements: Some squatting took place in the late 70s and early 80s, that is the immediate post-revolutionary and the war periods, due to the relaxed regulatory environment of the time. The possibilities for squatting have diminished in the larger cities now and very few such cases are reported today. 6. Slums formed in and around brownfields: These include areas that have been formed in and around semi-active or abandoned workshops and depots. Some of these workshops have been deactivated as a result of urban outgrowth or due to environmental regulations. These areas may not have any significant populations or may have residential characteristics in common with one or more of the previous categories.
  • 26. 23 3.2 Informal Tenure Arrangements Commonly Found in the Cities A relatively significant number of housing units may be found that lack official deeds across Iranian cities, but this situation is not restricted to slum areas. In fact many such dwellings may be found in the more affluent neighborhoods. The main reasons behind such tenure problems include the slow development a cadastre system and widespread attempts at overstepping regulations with the hope of paying a low fine to receive titles. Lack of a cadastre system has resulted in a large number of tenure disputes that must be settled through the courts. Furthermore, owners of structures not constructed according to regulations (including improper land divisions and construction) must work out their problems with the municipality which may take a long time. Additional tenure problems may exist in slum areas. Slums located outside official city boundaries, slums with rural origins, and slums recently incorporated into the cities are likely to have their genesis in informal land transactions. Owners may therefore only possess promissory notes (qowlnameh or pateh) and often need to go through a lengthy process at the municipality or at the courts (if there is a dispute) to get proper titles. Squatter settlements (the case of which was more prevalent in the past) face similar situations but with more difficulties. No official statistics are available on homelessness in Iran. Homeless shelters exist in larger Iranian cities. In Tehran there are 3 such shelters for men and three for women. Together they provide their services to 1500-2000 persons.21 Many of those who receive services at these centers are drug addicts. There are a large number of seasonal and migrant workers who may be in fact homeless during parts of the year, but generally do not stay at homeless shelters. So the actual homeless figures may be much larger. Information on evictions by the municipal authorities or landlords is also anecdotal. It is generally believed that such instances have been of eviction have become rare in recent times. 21 Akbar Aliverdinia and William Alex Pridemore, “Individual-Level Factors Contributing to Homelessness among Adult Males in Iran,” Sociological Spectrum, No, 32, 2012, pp. 209–225.
  • 27. 24 3.3 Statistics on Slums There exist relatively good estimates on the size and population of the two official types of slums (informal settlements and distressed fabric) which however may have a great deal of overlap. According to the figures from the National Task Force for Enabling Informal Settlements on 20 major Iranian cities, informal settlements on average cover around 8 percent of urban areas, 93 percent of which are found within the official municipal boundaries. Needless to say there are significant differences from one city to the next. For example in Bandar Abbas, about 31 percent of the land area is composed of informal settlements whereas the corresponding figure for Zanjan is less than 1 percent. Two sets of estimates are available on the extent of stressed fabric in Iranian cities – one is on 330 cities and the other on 17 selected cities. The first set gives us a figure of 9.2 percent as the average share of distressed fabric in the entire area of the cities while the corresponding figure in the second set is 10 percent (3 percent historic, 7 percent non- historic). A rough estimate of around 10 percent may also be provided on the share of “underutilized” areas in Iran cities (brownfield, dilapidated, etc.).22 The above cited figures are added up in Table 3, giving us a total rough figure of 28 percent for the average share of slums in the total land areas of Iranian cities. Table 3.1: Estimates on the Size of Slums Slums Percent of Total Urban Land Area Distressed Fabric 10% Informal Settlements 8% Underutilized 10% Total 28% Again, based on figures from the National Task Force for Enabling Informal Settlements, 22.8 percent of the population 20 major Iranian cities live in informal settlements (see Table 3.2). Extrapolating based on a figure of 48.2 million persons for 22 Pajuheshkadeye Towse’ye Kalbadi, “Regularizing and Enabling Urban Slums,” unpublished report prepared for Urban Development and Revitalizaiton Oranization, 2011.
  • 28. 25 the entire urban population in Iran gives us 9.6 million persons for the total informal settlement population in the country. Furthermore, at 195 persons per hectare the average net density in the informal settlements of the 20 studied cities is 2.7 times the corresponding citywide figure. No comparable information exists for the case of distressed fabric. Based on anecdotal evidence from a few cities, density in such areas is almost always higher than the rest. Table 3.2: Slum Statistics for 20 Major Cities (Provincial Capitals) Total Slum Areas City Population Area in Hectares Area in Hectares Percent of Total Area Population Percent of Total Population Percent Inside City Boundarie s Zahedan 650,000 4,800 1260 26.25 237,000 36.46 77.7 Kermanshah 692,986 9,569 739 7.72 270,979 39.10 70 Bandar Abbas 457,000 5,500 1700 30.91 137,100 30.00 100 Tabriz 1,191,043 23,000 1452 6.31 243,934 20.48 100 Sanandaj 325,618 3,561 536 15.05 173,672 53.34 100 Mashhad 2,400,000 24,000 1000 4.17 650,000 27.08 92 Ahvaz 1,100,000 22,000 1300 5.91 300,000 27.27 59 Arak 381,682 2,877 390 13.56 103,619 27.15 100 Ardabil 391,455 5,715 810 14.17 99,485 25.41 89.9 Shiraz 1,053,025 18,951 1808 9.54 180,671 17.16 100 Ilam 140,301 1,718 202 11.76 31,800 22.67 100 Hamadan 464,162 9,972 598 6.00 2,439 0.53 80 Orumieh 520,000 7,570 1180 15.59 146,000 28.08 78.6 Khorramabad 382,640 3,695 219 5.93 22,668 5.92 99.8 Qom 1,020,000 8,125 315 3.88 90,000 8.82 95 Saveh 165,000 2,053 244 11.89 18,140 10.99 95 Qazvin 291,117 6,430 50 0.78 22,000 7.56 100 Yazd 326,776 13,616 440 3.23 6,000 1.84 100 Zanjan 286,295 6,393 169 2.64 58,000 20.26 100 Birjand 127,608 2,776 98 3.53 22,000 17.24 98 Total/ average 12,366,708 182,321 14510 7.96 2,815,507 22.77 - Source: UDRO According to the most recent information provided by UDRO, 72,800 hectares of distressed fabric with a total population of 8.5 million persons across 471 cities as well as 43,000 hectares of informal settlements across 60 cities (710 settlements with a population of 5,119,490 persons and a total area of 45,994 hectares) have been identified.
  • 29. 26 3.4 Characteristics of Slums in Selected Cities As mentioned, distressed zones (fabric) have been defined in physical terms. For this reason, only anecdotal information exists on socioeconomic conditions in such zones. The characteristics of a number of informal settlements have been probed in a few studies. The results of a detailed social assessment conducted on Bandar Abbas, Zahedan, and Kermanshah, three significant cities in three different corners of Iran, are summarized below:23 1. The three surveyed cities were found to be different in terms of migration patterns observed in their informal settlements. While a large number of households among residents of informal settlements in Bandar Abbas were more or less natives, there were significant migrant populations in such settlements across Zahedan and Kermanshah. In Zahedan, about three quarters of the heads of households had rural backgrounds. Yet, even in Zahedan (as well as in Kermanshah), the population was found to be very young which means that while the head of household may be a migrant, the next generation is more often than not born in the city. 2. High rates of unemployment, underemployment, and employment in the informal economy were observed in the informal neighborhoods. This situation created a significant poverty trap. 3. An examination of household consumption levels in the surveyed settlements revealed high incidence of poverty. Households in these settlements fell within the lowest consumption brackets among all urban households in their respective cities. 4. Houses in the informal neighborhoods were constructed using relatively durable materials in the Iranian context, but they were not built according to standards. 23 P. Alaedini, et. al, “Informal Settlements in Iran: Examining Conditions in Bandar Abbas, Kermanshah, and Zahedan,” Iranian Journal of Anthropological Research, Vol. 1, No. 1, 2011, pp. 35-59.
  • 30. 27 Most houses did have kitchen, bath, and toilet, but their overall situation is less than desirable. Furthermore, some water discharge from homes flew into the streets and canals depending on the settlements. 5. There were few sources of housing finance other than households’ own funds. While a large percentage of households did have accounts at banks, they had not been able to benefit from the housing loan system. Most likely the full amount of loan from the Housing Bank did not cover the cost of a unit in the more formal housing markets while houses purchased in the informal market did not qualify for loans. High interest rates due to the high rates of inflation exacerbated the situation. 6. A relatively large number of households owned their homes, but a large number of owners do not have full titles. This said, since there was little threat of eviction made against those households who did not have titles for their homes, lack of full title only affected the price of homes. Other things that determined the price of housing units were location and size. Furthermore, there was a positive relationship between ownership and welfare as measured through consumption levels. 7. The local arms of the Ministry of Energy had been able to provide water and electricity to the overwhelming majority of the households in the informal settlements. Several other urban services including those related to street conditions and garbage collection were supposed to be offered by the municipalities. Yet, the municipalities often lacked adequate funds or enough capacity to deliver these services in the informal neighborhoods. Security issues faced by informal settlement residents, in particular women and girls, were partially related to the unsatisfactory street conditions and well as the limitations of security forces. 8. Households in the informal settlements did invest in their dwellings but they paid little attention to the façade and outside of their homes which most likely had something to do with their sense of private versus public space. There was a
  • 31. 28 relationship between ownership and tendency to repair one’s home. However, the type of ownership document in the hands of the owners was not significant in this observation. 9. Housing prices, for rent or purchase, had been on the rise in the surveyed neighborhoods as everywhere in Iran. Thus, even these neighborhoods had probably fallen outside the affordability range of poor households without homes in the city, migrants, or those starting a family. It was then easy to speculate that these households would have to look toward new informal settlements on the fringes of the city to be able to afford a home. 10.There was almost a complete absence of social, cultural, and sports centers in the informal neighborhoods of the three cities. Such centers could provide various types of programs including skills training that can help transform the socio-cultural atmosphere in the neighborhood and have a positive social impact on the next generation of the residents. 11.While residents of the informal neighborhoods exhibited high levels of traditional social capital, they lacked modern types of social capital to participate in local- level initiatives. They were more or less estranged from the urban management and were not in reality full citizens yet. In the absence of an empowering milieu, their social capital would not be easily transformed. Another study, using available information from 8 provincial capitals, provides the following summary tables on the characteristics of informal settlements in Iran.24 24 Mohandesine Amayesh va Towse’ye Alborz, “Emkanshanjie nahadinesazie farayande behsazie shahri dar Iran,” report prepared for UDRO, 2009.
  • 32. 29 Table 3.3: Characteristics of Informal Settlements in Eight Provincial Capitals City total Informal settlements Population Social Economic Basic services Population Population %oftotal Householdsize Agecharacteristics Percentilliterate Origin Percentof householdswith dailyincomeless than$5 Percent unemployed Percentwithhealth insurance Cleanwater(%) Electricity(%) Sewerage(%) Urban Rural Bandar Abbas 379301 137100 36.14 5.7 young 26.3 ×× × 71.4 30.7 N/A 97.5 99 1.5 Kermanshah 794863 270979 34 5.1 young 23.5 × ×× 67 18.5 35 100 100 N/A Esfahan 1601766 221000 13.7 4.01 N/A 21 × ×× 30 22 N/A 100 100 N/A Tabriz 1398060 243934 17.4 4.02 young 24 × ×× N/A 5 N/A 100 100 89 Hamadan 479640 98000 19.7 4.4 N/A 22.1 × ×× 92.3 8.3 27.9 32 100 9.1 Ilam 160355 31800 19.4 5.5 young 25 × ×× 94.5 26.5 29.7 100 99.5 6.8 Zahedan 567449 237000 41.8 N/A young 36 × ×× N/A 17 N/A 80.2 87 0 Sanandaj 316862 173672 54.7 N/A N/A 42 × ×× 66.9 66.9 41.9 100 100 84 Total 5698296 1413485 24.8 Source: Mohandesine Amayesh va Towse’ye Alborz, “Emkanshanjie nahadinesazie farayande behsazie shahri dar Iran,” report prepared UUHRP, 2009, from Urban Development and Revitalization Organization studies and Census figures.
  • 33. 30 Furthermore, according to the aforementioned study, many of the settlements in the examined cities are located in hazard-prone areas, as shown in the following table. Table 3.4: Informal Settlements in Hazard Areas across 8 Cities City where informal settlement is located Characteristics Hazard Esfahan, Kermanshah, Ilam, Bandar Abbas, Hamedan, Zahedan (Dominant Type) Settlements in agricultural plain area with proper access to basic services, located around the main city Low Tabriz, Sanandaj, Bandar Abbas Settlements built on steep hillsides, loose soil, rocky ground, flood land High Tabriz, Sanandaj, Kermanshah Near high voltage lines Medium 3.6Land Use Regulations, Property Ownership Laws, and Shelter Legislation Land use Land use in each city is determined by its comprehensive and detailed plans, which are supposed to be prepared every ten years. Whereas these plans usually contain minimal zoning, they set the type of land use for each lot, minimum sizes of lots, and a specific construction density for each lot. These may be altered on a lot-by-lot basis through a specific committee (Provincial Article 5 Commission) and payment of fees. These land use regulations in practice limit the supply of land and increase its price, which affect low-income households most severely. In the first few post-revolutionary years, attempts were made to address the needs of certain low-income groups through occasional (and rare) decrees. Low-income households face constraints in acquiring land and housing as a result of the inefficient functioning of land and housing markets. Due to high levels of inflation and the scarcity of secure investment channels, land and housing markets have become the subject of speculative activities and hoarding.
  • 34. 31 All land is either publicly-owned, privately-owned, or is managed by the Endowments Organization (Sazmane Owqaf). If a private person claims the possession of the parcel of land, but is not in the possession of a full land title, s/he may apply for one through the Judiciary and the Registration Organization. The legal process will ensure no alternative claims are made to that land parcel. In practice, many slum residents with informal claims to their parcels of land have been able to get their full titles after a very lengthy process. There are also instances in which whole areas have become eligible to receive full titles. Legal aspects of formal tenure Private property is protected under Article 47 of the Iranian Constitution which states that “Private ownership, legitimately acquired, is respected. The relevant criteria are determined by law.” Furthermore, according to Article 30 of the Iranian Civil Code, “Every owner has unlimited rights of occupation and exploitation over his/her property when no exception is made by the law.” Some of these exceptions overriding the aforementioned article are included under the Law of Renter and Landlord Relations, Law of Urban Land, and Law on Expansion of Streets. Articles 35 of the Civil Code states that “Possession as ownership is taken as proof of ownership…,” while Article 36 specifies the legitimate basis of such possession. Yet, two types of ownership based on the validity of title (either official or regular) are distinguished in the following Civil Code articles: “Article 1287— Documents which have been drawn up at the General Department for Registration of Documents and Landed Properties, or at notary public offices, or before other official authorities, are considered official within the limit of their competency and in accordance with legal regulations, …Article 1289—Other than documents mentioned in Article 1287, all documents are regarded as regular.” Regular documents are by definition nonofficial with negative ramifications for those claiming ownership based on them. In practice, in many cases private land on the fringes of the cities is unofficially divided and sold with promissory notes (qowlnameh or pateh). What makes this type of land attractive is exactly the fact that it does not have proper plot division or construction
  • 35. 32 permits, thus making it much cheaper than land elsewhere (and a location for the formation and expansion of informal settlements). Therefore, those who purchase this land are more or less the legal owners of their plots, although they lack construction permits and full titles. Construction on such sites therefore tends to take place at night and illegally. Regulations concerning tenure security and eviction Based on Iranian laws, taking over any real estate without possessing its title is illegal. Exceptions were made in Articles 147 and 148 of the Registration Law (Qanune sabt) which is no longer in effect. Yet, the Law on Determining the Status of Real Estate Lacking Official Document (Qanune ta’yin taklife vaz’iyat sabtie arazi va amlake faqede sanade rasmi) makes legality of possession conditional upon the legality of its origin. Thus any real estate lacking formal title may be granted such a document provided that an applicant can produce adequate evidence to satisfy a special conflict resolution committee (made up of representatives from the governorate, judiciary, registration office, housing and urban development office, etc.) created for this purpose in each registration zone. Furthermore, Article 9 of Law on Supporting Revitalization, Upgrading, and Renovation of distressed and Underutilized Urban Fabric (Qanune hemayat az ehya, behsazi, va nowsazie bafthaye farsudeh va nakaramade shahri) states that: “Conflicts concerning the tenure status of real estate located within areas approved for revitalization, upgrading, and renovation projects, whether lacking title, or lacking owner, or with no known owner, or with other issues, are resolved by a committee comprising a seasoned judge selected by head of the Judiciary, the head of the local Registration Office or his representative, and a person representing the provincial Housing and Urban Development Organization through a verdict issued by the presiding judge.” Laws related to informal settlements The most important national document dealing with informal settlements is Strategies for Enabling and Regularizing Informal Settlements adopted by the Cabinet in 2004.
  • 36. 33 Some of the main strategies and policies on informal settlements specified in this document are: General  …creation of informal settlement provincial taskforces…  Creating a national coordinating institution [National Enabling Taskforce]….  Supporting locally elected institutions in informal settlements as the focal forum for all negations…  Establishing a multi-sectoral institution at the city level …  Facilitating cooperation and exchanges between public sector and residents…  …good governance incorporating participation and consensus building…  Encouraging professional NGOs to respond effectively to the needs and demands of informal settlements…  Resolve…legal…issues within existing informal settlements towards formal recognition of the permanency of these settlements  With the aim to avoid natural hazards or to appropriate land for public goods or services, achieve resettlement through a participatory process of negotiation.  …using participatory processes for …service provision… Provision of affordable infrastructure and basic services  Reviewing…building codes …and planning regulations with a view to affordability…  Supporting self-built [housing] and self help…  Providing adequate land…for low-income housing…  …supporting regularization plans…  Creating a national center for informal dissemination, research… Financial matters  Assessing all regulations and legislation which limit access of lower-income groups to formal financial facilities…
  • 37. 34  Creating a housing and employment fund [and] micro-credit units with financial participation of local people plus other public and private resources.  Allocating a certain portion of government subsidies to seed capital for micro credit funds…  …insurance coverage for…activities…in informal settlements  Encouraging effective participation …through…credit [and] facilities…  …avoiding …untargeted subsidies…  Urgently allocating state funds usually used for the provision of urban infrastructure to informal settlements.  …creating public spaces (sports grounds, cultural and leisure centers) within the informal settlements. In conjunction with the above document a “Resettlement Framework Document” was also adopted in 2004. According to this document, resettlement should only take place in exceptional cases for which adequate compensation for financial, social, cultural, and human disturbances should be made. Resettlement decisions in each city are to be made by a “Special Resettlement Committee” formed in the Provincial Enabling Taskforce and headed by the Mayor. Shelter legislation The issue of providing land to low-income households was not specifically dealt with by the government until 2008/9 when Law on Organizing and Supporting Production and Supply of Housing (Qanune samandehi va hemayat az towlid va arzeye maskan) was adopted to address the access of low-income groups (the poor) to housing. This Law requires the government to make land available for housing both inside the cities and outside cities in detached housing complexes and new towns. Some of its main articles are provided below: Article 1—Concerning housing provision, in order to facilitate the access of those in need (especially low-income groups) to adequate housing, improve housing production in qualitative and quantitative terms, encourage investment in housing
  • 38. 35 production using advanced industrial technology, upgrade and renovate distressed urban zones and informal settlements, and retrofit existing housing units, the government is required to undertake to provide the required support to making suitable land available, eliminating or reducing the price of land in the cost of housing, offering inexpensive banking facilities, granting tax exemptions, preparing other necessary inputs to the housing sector in the framework of this Law, formulating national building schemes/regulations and monitoring their realization, and enhancing the capacity of the housing sector (production and supply) to attract investment with the aim to secure housing for those lacking it (once for every household) in accordance with the national building regulations, the housing consumption model, and urban planning and architectural principles. Part 7, Article 2—Supporting upgrading/renovation and production/supply of housing in Distressed urban zones and informal settlements by the non- governmental sector. Article 9—In order to provide part of the needed credit for implementing this Law, the Ministry of Housing and Urban Development can, with the endorsement of the government, sell some of the land in its possession through public offering, based on current prices determined by expert opinion. Article 12—The Central Bank of the Islamic Republic of Iran shall undertake to make available long-term facilities – as part of the total banking facilities, the amount of which must be determined every year – for the specific purpose of building housing units and upgrading/renovating Distressed fabrics and informal settlements as well as granting no-interest rental loans (for temporary settlement), subject to this Law. Once the housing units are built, these facilities may be transferred to buyers; transfer and repayment conditions shall be approved by the cabinet per the proposal of the Ministry of Economic Affairs and Finance.
  • 39. 36 Article 18—In order to realize the aims and programs of this Law, the government is required to foresee (in annual budgets) and provide the needed credit (from public income) in the yearly amount of 10,000 billion rials for the remainder of the Fourth Economic, Social and Cultural Plan of the Islamic Republic of Iran. The aforementioned credit is considered 100 percent allocated, and the Ministry of Housing and Urban Development is permitted to use part of this credit to aid mortgage rates provided by banks or managed funds upon entering into contracts with agent banks in order to create the grounds for the provision of inexpensive facilities and targeted subsidies.
  • 40. 37 PART FOUR: SLUM UPGRADING IN PRACTICE AND FUNDING MECHANISMS 4.1 Evolution of Activities in Physically-Distressed Zones In the past two decades a number of initiatives have been undertaken by the UDRO to tackle the problems of urban areas considered physically vulnerable, problematic, or exhibiting lack of spatial organization. In the early 1990s, the main emphasis was on reconstruction of war-damaged areas as well as on upgrading old city centers (upgrading cultural-historical axis). This was followed by a redevelopment or “urban development and renovation” focus in the mid-1990s which was a top-down attempt at addressing decline of the older parts of the cities and regenerating valuable land. The expression “distressed fabric,” mostly applied to the old city centers, gained widespread currency in this period, while the term “problematic urban fabric” was specifically referred to in the Second Economic, Social, and Cultural Plan. The main initiatives included purchasing land, integrating small lots (tajmi’), and widening streets and alleys. Some of the important cities targeted in this period included Semnan, Gorgan, Yazd, Bushehr, Shiraz, Kashan, and especially Mashhad. In Mashhad an area of 360 hectares around the Shrine of Imam Reza was designated for complete renovation. Usually, some specific company, owned by the public sector, would be created to undertake such projects. Little attention was given to the social and economic impact of these endeavors on the residents. It also soon became clear that the required funds for the purchase of land made such large programs prohibitive in most cases. While these projects were in many cases sponsored by the central government, charismatic mayors with authoritarian management styles who believed in large-scale urban renovation projects also played important roles in this period. The Navvab Avenue project in Tehran is an important example. Furthermore, despite centralization and the top-down nature of these activities, no policy-making authority existed to formulate the main strategies and policies based on best practices. The Urban Development and Revitalization Organization as a deputy administration under the Ministry of Housing and Urban Development (now Ministry of Roads and Urban Development) was formed in 1997 to usher in a new era of policy-making on slums (both distressed fabric and informal settlements). Prior to its establishment, urban
  • 41. 38 renovation activities concentrated in the city centers (especially historical parts), were dominated by central government initiatives in terms of planning, funding and execution, and comprised physical interventions solely. New ideas, particularly “balanced and sustainable urban development,” began to permeate policy, demanding increased attention to social, economic, cultural, and demographic issues in regeneration activities. Terms such as enabling, empowerment, and revitalization were thus included in UDRO’s vocabulary. Since 2005, UDRO has adopted a new approach to regenerating distressed fabric by aiming to maximize people’s participation. The main activities of the central government are concentrated on creating the grounds for and facilitating regeneration of distressed fabric though the activities of local agents, mayoral administrations, the private sector, banks, local cooperatives, charity foundations. Furthermore, upgrading projects are to be financed through the private sector, banks, participation bonds, and general government budget while addressing the needs of owners and residents. As the main policy, planning, and management arm of the government in this field, UDRO has concentrated on two sets of initiatives, namely software (non-physical) and hardware (physical) activities. Software activities include cultural advocacy (e.g., information dissemination), capacity-building (e.g., training), creating institutions and means, and documentation. Hardware activities comprise the set of physical projects undertaken by the public sector that in turn facilitate the activities of owners and residents, developers, investors and other players in the process of regenerating distressed fabric. Such projects include pilot initiatives to gain knowledge about best practices, upgrading infrastructure, street widening, creating and improving public spaces, and expanding neighborhood services (e.g., parks, playgrounds, libraries, neighborhood centers, and mosques). Table 4.1 summarizes the above experience.
  • 42. 39 Table 4.1: Evolution of Activities in Physically-Distressed Zones Timeframe 1990-1993: Upgrading city centers/cultural axes 1994-1996: Problematic urban fabric/Integration of small lots 1997-2004: Urban Renewal After 2005: Renovation and reconstruction of distressed fabric with an emphasis on sustained participation Since 2009: Urban Upgrading Main approach Reconstruction of war-damaged areas; renovation of old city centers Renovation and reconstruction of aged urban areas through purchase of land Promoting endogenous development; preventing uncontrolled expansion of cities; improving previous large-scale interventions; institution-building; formulating redevelopment regulations Continuing and improving on previous policies; return of attention to old parts of cities as well as areas generally thought as distressed and inefficient; retrofitting and improving safety Sustainable and widespread participation of citizens though the creation of appropriate grounds and activities to jump start local development process Main players Central government and mayoral administrations Central government with the participation of mayoral administrations and other stakeholder institutions through the formation of companies owned by the public sector Central government with the participation of mayoral administrations, cultural and heritage organization, banks, and other public and private stakeholders Central government through local agents, mayoral administrations, private sector, banks, local cooperatives, and charity organizations Central government as policy maker and monitoring authority, mayoral administrations for management of implementation, and the private sector as the main actor Scale/location City centers Aged inner city neighborhoods City neighborhoods and special zones Neighborhood/areas designated as distressed fabric Structural axes of neighborhoods in specific areas Financing General government budget/mayoral administrations General government budget/limited sources of other partners Public private partnership/banks Private sector, banks, participation bonds, general government budget Private sector, participation bonds, general government budget Social aspect Encouraging owners and residents/developing housing cooperatives for medium- and low- income households Pushing natives out; lack of attention to the role of residents and owners as well as planning for new residents Increased attention given to the quality of life of residents and encouraging them to participate; strengthening the role of housing cooperatives in the distressed fabric Stressing the role of social groups; strengthening the position of owners and residents and giving attention to their needs Emphasis on the participation of all social groups Physical aspect Uncontrolled, horizontal expansion of cities; declining city centers Widespread destruction of target zones; exacerbation of spatial problems Addressing spatial disorganization and attempting to benefit from all available capacity for development Addressing spatial disorganization and attempting to benefit from all available capacity for development Addressing spatial disorganization of major structural axes of urban centers Preservation aspect Formation of the Cultural Heritage Organization; grounds for increased attention to cultural values Taking old urban fabric to be problematic; destruction and reconstruction Increased attention given to existing structures; striving to reequip old structures; promoting “new life in old structure” Withholding intervention in historical zones and striving to interact with relevant organizations, especially Cultural Heritage Organization Withholding intervention in historical zones and striving to interact with relevant organizations, especially Cultural Heritage Organization
  • 43. 40 4.2 Earlier Experience with Informal Settlement Upgrading A major initiative on Iran’s informal settlements was undertaken through the Urban Upgrading and Housing Reform Project with the assistance of the World Bank in the period 2004-2009. The main purpose of UUHRP (APL1) was to pilot-test and refine an integrated approach to upgrading underserviced neighborhoods in 5 Iranian cities, and to initiate reforms in the public management of the housing sector toward a market-led structure. The upgrading initiatives in the 5 cities of Kermanshah, Zahedan, Bandar Abbas, Sanandaj, and Tabriz aimed to improve living conditions in informal settlements based on community priorities, help indigenize an urban upgrading model for Iran, and provide feedback for the institutionalization of an upgrading structure at the national, provincial, urban levels. The housing reform activities were to prepare a system, the capacity, and the regulatory framework for market-based housing reforms. UUHRP succeeded in bringing about a new government direction in dealing with informal settlements in Iran. The preparation of the national document on Strategies for Regularizing Informal Settlements was an early achievement of the Project. In this document a new approach and orientation to informal settlements based on upgrading is delineated. With this document the National Enabling Taskforce was formed assuming the responsibility for the subject and coordinating activities on the informal settlements. The National Taskforce has also established provincial taskforces not only in the 5 UUHRP cities but also across the provinces in Iran. Most of these taskforces have commissioned studies on the informal settlements and how to upgrade them while some have already come up with upgrading initiatives of their own. Implementation coordination taskforces have also been formed in some cases at the city level to coordinate the activities of the municipality and urban service agencies based on the recommendations of the commissioned studies. Some training has already been provided to members of these taskforces by the National Taskforce. As a result of the project, a specific national budget line was approved for the informal settlements. The heightened attention of the authorities to informal settlements in Iran was revealed in the President’s provincial trips. In Bandar Abbas alone 350 hectares of land were allocated as collateral for the purpose of informal settlement upgrading by presidential decree.
  • 44. 41 UUHRP was able to deliver a set of upgrading activities in the informal settlements of 5 target cities using an integrated approach with significant impact on their urban management orientations. A major change of attitude toward and appreciation for the upgrading approach to informal settlements has been a clear result of the project. As an important example, while the project spent about US$ 14 million in Bandar Abbas, it is claimed that the Province put in an additional US$ 20 million while the mayoral administration spent US$ 4-5 million on the target settlements. The Municipality in particular has significantly increased its activities in the target informal settlements and has in some instances enhanced its quality and quantity of interactions with the communities. In effect, it has fully embraced its responsibilities to the target neighborhoods, perhaps since they no longer appear so informal. The same may be true for other agencies. For example, it is claimed that new projects have been formulated for the target settlements and a specific detailed urban plan for the informal settlements is being commissioned (since much of the informal settlement areas are not covered by the city’s detailed plan). UUHRP was able to disburse around 50 percent of its loan amount only. This means that it was unable to deliver the full package of its activities. Furthermore, at the time being, prospects for the outputs of its housing reform component are at best uncertain while those for the institutionalization of an urban upgrading process and urban upgrading fund as well as city development strategies are only slowly evolving. Yet, the major positive impact of UUHRP should be observed outside of its own subprojects, in developing a new orientation to informal settlements at various public sector levels in Iran. It has created a number of institutions at the national, provincial, and city levels that should ensure major future activities concerning informal settlements. As a result of the project, informal settlements have now attracted major funding from the public budget. Furthermore, the main reasons behind UUHRP’s lackluster performance may be summarized as: UUHRP’s complicated initiatives that required coordination among a great number of actors; the novelty of the activities in Iran, which meant that neither UUHRP staff nor Iranian consulting firms (against the background of a limited use of international consultants) nor Iranian authorities were experienced in delivering or facilitating the delivery of the Project’s outputs (especially in the case of software initiatives such enabling, capacity building, and institutionalization, but also across the subprojects); and
  • 45. 42 difficulty of delivering works in informal settlements due to their nature as well as land acquisition problems. Project initiatives in the cities have shown some success with regard to beneficiary satisfaction, participation, and sustainability as demonstrated by the case of Bandar Abbas. Sustainability and participation have been enhanced in areas where interactions between the Municipality and the people have been high. Many of the resident priorities have materialized including better street conditions, surface water drainage, canal rehabilitation, access to transport services, garbage collection, and green space for families in which to spend their leisure time. The project has ended the isolation of the neighborhoods and has increased their security. However, the scale as well as the geographical and substantive scope of the initiatives has been limited. The neighborhoods are still in need of services that are supposed to be provided by the unfinished initiatives as well as those not planned or not with a full geographical coverage. Community mobilization activities, interactions between the community and service agencies, and other enabling initiatives have been promising (e.g. Municipality-resident interactions, neighborhood mayor, microfinance groups, etc.). Yet, they have not been adequate in number and coverage to leave a lasting impact. Nor did the enabling activities create the theoretically-desired synergy with the physical improvement initiatives. They nonetheless have set a number of good examples on which to build further efforts. 4.3 Funding for Slum Upgrading Upgrading initiatives undertaken in Iran in the last two decades have benefited from a number of funding modalities explained below. Financing Revitalization of Physically-Distressed Zones 1. Subsequent to a preliminary analysis of the extent of physically-distressed zones in Iranian cities, funds were earmarked in the budget law of 1994-95 (in conjunction with the Second Five-Year Development Plan) for a set of upgrading feasibility studies to be conducted under the supervision of the Ministry of Housing and Urban Development (currently Ministry of Road and Urban Development) on 273 hectares across 24 selected cities
  • 46. 43 (approximately 10 hectares per city). This was the first time specific government funds were allocated for such a purpose. 2. Concurrent with the above research initiative, physically-distressed zones in the Shush neighborhood of Tehran and peripheral neighborhoods of Imam Reza’s Shrine in Mashhad as well as certain areas in Gorgan, Ardabil, Hamadan, Kermanshah, Semnan, Esfahan, Shiraz, and Yazd – totaling 63 hectares – were targeted for revitalization. Around 130 billion rials (in 1995/6 prices) were allocated from the internal sources of the Land and Housing Organization (through the sales of its real estate assets). 3. Regeneration of the peripheral areas of Imam Reza’s Shrine in Mashhad was taken up by the government as a priority project. As a result, other than the internal funds of the Housing and Land Organization, purchase of the needed land was made possible through issuing participation bonds in 1996-7. 4. A certain national budget line was allocated for the first time for the purpose of renovating valuable architectural/cultural/historical buildings in physically- distressed zones in 1996-7 based on an edict issued by the Supreme Council of Money and Credit. But this initiative did not prove effective. 5. Along with the establishment of the Urban Development and Revitalization Organziation (UDRO) in 1997/8, through an edict issued by the cabinet, 10 billion rials worth of land belonging to the Land and Housing Organization was set aside as capital asset for UDRO’s operations. Funds released from the sales of these assets were allocated to specific projects (mostly opening passages and free up spaces) in the physically-distressed zones of Tehran (Cyrus neighborhood), Orumieh (Imam Khomeini Circle), Tabriz (Saheb-ol- amr underpass), Rasht (Seyqalan-Takhti axis), Shiraz (Karim Khan underpass), and Mashhad (further purchase of land around Imam Reza’s Shrine) as well as preparing upgrading and renovation plans and repairing valuable buildings under the “Old Structure, New Life [kalbade qadim, zendegie jaded]” project. The aforementioned assets are still being used for to fund upgrading projects.
  • 47. 44 6. In 2001/2, participation bonds for a total amount of 100 billion rials were issued (based on the permit provided in the budget law of the aforementioned fiscal year) to fund the purchase of land and a few projects in conjunction with the revitalization plan of Imam Reza’s Shrine in Mashhad as well as renovations concerning the Shahid Beheshti Circle of Tabriz, Imam Khomeini Circle of Orumieh, and few historical buildings of value in Yazd. Participation bonds were further issued in 2006/7 and 2007/8 for the amount of 6,500 billion rials. Eventually more than 15,000 were issued by municipalities aiming to fund the renovation of the peripheral areas of Imam Reza’s Shrine, the shrine-to-shrine project of Qom, and certain areas of Tabriz and Tehran. 7. Through the efforts of the Management and Planning Organization (now, Presidential Deputy Office for Supervision and Strategic Planning) and based on the provisions of the Annual Budgets Law, 10-20 billion rials per annum were allocated through the Housing Bank for the purchase of land in physically-distressed zones (opening up space) in the period 1999 though 2004/5. 8. A total of 79 billion rials were allocated in 2002/3 budget law for the purpose of purchasing land in physically-distressed zones as well as projects undertaken by UDRO. 9. Credit was allocated in 2004/5 to private-sector developers for the purpose of upgrading and renovating the peripheral areas of Imam Reza’s Shrine of Mashhad and Sheikh Safi-al-din’s Tomb in Ardabil in the form of managed funds – one third of which was covered by the Management and Planning Organization and two thirds of it was provided through the facilities of Bank Tejarat. 10.Upgrading a number of physically-distressed zones in Tehran was financed (worth $300 million) by ABC Bank of UAE through Bank Mellat. 11.In light of the ratification of the Fourth Five-Year Development Plan requiring the revitalization of physically-distressed urban zones within ten years, support packages were also approved in the annual budgets laws of 2005/6, 2006/7, and 2007/8. Furthermore, with the passage of law concerning
  • 48. 45 reorganization and support of housing production and supply, the incentive package for upgrading and renovating physically-distressed zones, as detailed below, assumed a permanency.  Discounts of 50-100 percent on renovation and high-density construction taxes  Provision of inexpensive facilities and subsidies toward renovation and purchase of housing units in physically-distressed zones (with the government subsidizing at least 6 percent of interest rate): for each unit under construction, initially 140 million rials and currently 200 million rials (may be increased in the near future).  Provision of inexpensive facilities and subsidies for the repair of buildings of architectural/cultural/historical value.  Addressing cost of temporary relocation during reconstruction or retrofitting of buildings in the physically-distressed zone. 12.Annual budget allocations comprising special credit to assist upgrading and renovation of physically-distressed zones has increased every year since 2008 and reached 650 billion rials in the latest Iranian fiscal year (2011-12, ending last March 20). This special credit has been used through UDRO to address the impenetrability of certain distressed urban fabric (reopening space) via tripartite agreements matching provincial and municipal funding in equal terms. Some of this credit has recently been used for advocacy to prepare residents to participate in upgrading distressed fabric. Financing Informal Settlement Upgrading 1. The Urban Upgrading and Housing Reform Project (UUHRP) was funded by the World Bank (providing loan to cover 80% of costs) and the Iranian Government (covering 20% of costs). The main purpose of UUHRP was to pilot-test and refine an integrated approach to upgrading underserviced neighborhoods in 5 Iranian cities, and to initiate reforms in the public management of the housing sector toward a market-led structure. The upgrading initiatives (Component A) in the 5 cities of Kermanshah, Zahedan,
  • 49. 46 Bandar Abbas, Sanandaj, and Tabriz aimed to improve living conditions in informal settlements based on community priorities, help indigenize an urban upgrading model for Iran, and provide feedback for the institutionalization of an upgrading structure at the national, provincial, urban levels. The housing reform activities (Component B) were to prepare a system, the capacity, and the regulatory framework for market-based housing reforms. A third component of the project (Component C) created management capacity for the implementation of the project. All three components were supposed to eventually feed into the second (and ultimately third) part of a 12-year program. UUHRP was implemented in the 2004-2008/9 period and was able to disburse around 50 percent of its budget only before closing. 2. In Bandar Abbas alone 350 hectares of new land were added to the city and allocated to UDRO as collateral for the purpose of informal settlement upgrading by presidential decree. 3. A microfinance initiative was carried out by the Agricultural Bank that targeted some informal settlements as well. This project used linkage banking.
  • 50. 47 PART FIVE: RECENT PERFORMANCE AND POLICY PROSPECTS CONCERNING SLUM UPGRADING AND SHELTER PROVISION 5.1 Current Policy Government policy on slums, both informal settlements and distressed fabric, is increasingly assuming an urban upgrading orientation. Emphasis is placed on reshaping existing structures, introducing new elements, reorganizing spaces and functions, and planning for the optimal utilization of existing capacities. A wider range of issues are now taken into account and local capacities and enabling approaches have become important areas of focus. Furthermore, the central government is avoiding direct intervention and is delegating significant authority to local agents. Major efforts are also being made to benefit from private sector funding and financial resources of slum residents. This is in line with the emphasis placed on enhancing the role of owners and residents to address their needs and to solicit the participation a wide range of stakeholders in the process of urban upgrading. This in turn requires creating the appropriate grounds and the qualitative as well as quantitative requisites and incentives. The main initiatives undertaken to create the grounds for upgrading activities include the formulation of necessary means, enabling, and cultural advocacy. Further tools to jumpstart local development are demonstration pilots on the one hand and provision of services and improvement of infrastructure on the other. Finally, managing the upgrading process strategically rests upon institutionalization, capacity-building, and coordination. The main players in the process of urban upgrading include the private sector, the government, the mayoral administrations, and most importantly the people. The main governmental agency responsible for policy and coordination is UDRO. 5.2 Current Activities Concerning Physically-Distressed Urban Fabric As mentioned, 72,800 hectares of distressed fabric with a total population of 8.5 million persons across 471 cities has been identified by UDRO. Since 2005, 5,885 hectares of the urban distressed fabric has been renovated. The current instruments for the renovation of distressed fabric are: preparation of specific plans for physically- distressed zones; provision of loans up the amount of 150 million rials for each housing unit without any collateral; giving a 50 percent discount on housing

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