Housing Minus Technology

For several years now, the term “the wall between universities and industries” has been discussed, along with the lack of practicality in research. Sayyed Taha Hussain Madani, the head of the Smart Governance Think Tank, believes that many economic sectors in the country, including housing, operate in a traditional manner. This is while this sector requires targeted research and modern solutions, as well as the revision of certain laws.

The head of the Smart Governance Think Tank added: One of the solutions proposed by some organizations to address the housing problem is the retailing of housing using information technology. This solution has yielded positive results so far, but it is necessary for governing institutions and housing authorities to show flexibility and, by updating their mindset, allow limited and experimental implementation of such solutions. As long as legislators and executors do not show prudent flexibility toward these new phenomena, no success will be achieved in this area.

Madani further stated: Experience has shown that traditional solutions, such as relying on the government to build housing, have not been effective in recent years. Although the laws of the country assign the primary responsibility of housing construction to the government, we must accept that the government alone cannot build this volume of housing. The involvement of the government and quasi-governmental companies can even disrupt the housing market and leave buyers highly dissatisfied. He emphasized: One of the modern solutions that the world has successfully used to direct liquidity and finance new projects is crowdfunding.

The per-square-meter sales plan is essentially a form of crowdfunding to cover the costs of a project. Experts and specialists in this field should focus on this area, clarifying the legal and technical prerequisites and providing operational solutions for implementing such plans. Certainly, the successful implementation of the per-square-meter sales plan and public acceptance of it can reassure the private sector to make a strong comeback in this market.

Madani noted: Although we have established laws for pre-selling buildings and financing construction projects since 2010, and the per-square-meter sales plan in the stock market has been proposed during this period, limiting it to the stock market is an outdated solution and has not been effective in addressing the complexities of this market. The performance of land and housing funds, as well as the effects of parallel standard forward contracts, GAM, Murabaha, and deposit certificates on the housing market and its production, are evidence of this lack of success. The housing market has its own complexities, and offering it on the stock market also creates new challenges. In the case of buying and selling coins, cars, or any other commodity on the stock exchange, the buyer fully knows the specifications of the shares or the purchased item and the delivery time. However, this is not the case with housing. Housing has many variables; for example, the type of materials or amenities may differ, and even the impact of the contracting team and its members on the project during the contract period can distinguish two units in the same project. Therefore, a mechanism must be defined to clarify what property, with what execution details and scope, the buyer is purchasing per square meter or share. If we succeed in implementing such information on the stock exchange platform, we would need to employ a large number of supervisors and staff for the stock exchange and, in effect, the government. Even if successful, which is unlikely, we would have taken a path directly contrary to Articles 43 and 44 of the Constitution.

Madani stated that the existing laws and regulations regarding per-square-meter sales should be revised and updated according to current conditions. He said: Currently, user-friendly online platforms for per-square-meter sales, or simply put, retailing of buildings, have emerged. One of the challenges with these emerging phenomena is the lack of legal and regulatory frameworks. Therefore, these platforms should be placed within a reliable legal and regulatory structure so that the idle and unproductive capital in the hands of the public can be confidently directed toward housing and construction through information technology. Additionally, in case of violations or abuses by any web-based platforms, a system for corrective measures and intervention should be established—an issue that has not been addressed so far and has exposed us to significant violations such as mass fraud and large-scale speculative sales.

Madani emphasized: The entry of these small investments into the housing market, in addition to enabling the private and public sectors to address the housing challenge, also mitigates the destructive effects of this idle liquidity on the country’s economy. Although this solution does not directly make people homeowners, by channeling their capital into construction, it can encourage their participation through the preservation of monetary value and the benefits of the added value generated from construction. Consequently, the private sector will be able to initiate construction projects, increase production, and ultimately supply housing. He added: As mentioned, the laws related to per-square-meter sales should be amended through a bill proposed by the government and supported by the Islamic Consultative Assembly, considering the emergence of these online platforms and mechanisms for per-square-meter building sales. In general, the government should, with this perspective and the acceptance that information technology can be a crucial supporter in implementing new solutions to the old problem of housing, pave the way for the participation and activity of knowledge-based companies in this field and closely supervise it.

The Commission for Development and the Ministry of Roads and Urban Development Should Take the Lead in Addressing the Housing Crisis with Elite Input

The head of the Smart Governance Think Tank said: With the amendment of laws by the Islamic Consultative Assembly, the facilitative and supervisory participation of the government, and the establishment of a clear legal framework, housing production can be entrusted to the people and the private sector. Experience has shown that the entry of the private sector into any field leads to increased productivity and faster progress. By allowing the private sector to operate in new platforms such as online retailing of residential units and buildings, the goal of “production leap with public participation” in the housing sector will be achieved.