Tehran’s municipality has launched a package of welfare measures meant to shield residents from soaring living costs, but the initiatives are facing tough questions about their financing, their likely impact, and whether the local authority is stepping into territory that belongs to Iran’s national government.
The local authority has introduced four projects it describes as protection for citizens. They include a housing scheme, a freeze on the prices of 12 basic goods, and a maternity package.
In Iran, municipalities are tasked with local services and urban management, while the national government handles broader economic policy, including efforts to bring inflation under control. Iranian law does grant municipalities some duties beyond conventional urban services. Article 55 of Iran’s Municipal Law calls on them to provide public food markets, make certain essential goods more affordable, and offer social welfare facilities and low cost housing.
That means the argument is not really about whether the Tehran municipality has the legal standing to provide such services. The focus is on the scale of the programmes and how they are funded.
The “Zero Inflation” dispute
The price freezing initiative, branded the “Zero Inflation” project, has drawn the most controversy. It arrived as year on year inflation reached nearly 90 percent last month, while annual food inflation hit 108.8 percent.
Questions have been raised about where the money will come from and whether the project can deliver. Some observers believe the measures could deepen inequality between the capital and other Iranian cities.
The programmes are seen as a response to the severe economic difficulties facing Tehran residents, difficulties that have worsened since the United States and Israel launched a war on Iran on February 28.
Tehran Mayor Alireza Zakani said the municipality had recently guaranteed prices between 5 percent and 50 percent below market rates for the next six months.
Yousef Akandeh, a political activist, told Al Jazeera that freezing the prices of certain goods or offering free services will not on its own bring inflation down to zero.
“Even if we assume that the Tehran municipality succeeded in stabilising the prices of 12 basic goods, what about the rise in rents, medicines, transportation prices, and the rest of living expenses,” Akandeh asked.
He said genuine efforts to tackle inflation would need to start with controlling liquidity growth and enforcing monetary discipline, steps he described as nearly impossible while the war continues.
Maternity support and overlap concerns
The municipality has also rolled out a maternity support programme. It offers mothers of children born this year monthly credits worth up to 40 million rials ($15) for two years for each newborn.
Akandeh pointed to an overlap with a national scheme that already exists.
“The government implements a similar package and provides monthly financial amounts for all newborns across the country and not just in Tehran, and if the municipality’s package is independent of it, the Tehrani family may benefit from the national and municipal programme simultaneously,” Akandeh said.
Drawing support from both programmes would not in itself indicate any wrongdoing. Critics are instead asking whether the municipal spending is an appropriate use of Tehran’s resources, especially when the city faces competing financial demands.
Transparency and housing questions
Amir Dabiri Mehr, a former adviser in the Tehran municipality, told Al Jazeera that supporting homeless people does fall within the municipality’s social responsibilities, but he argued the core problem is a lack of transparency. The municipality is funded by taxes and building density licences.
“The people have the right to know what the municipality spends within the framework of its original tasks, and in tasks it has chosen for itself, and where it gets its resources from?” Dabiri Mehr said.
Hamshahri, a newspaper affiliated with the municipality, said the “Zero Inflation” project is not financed through municipal budget subsidies. Instead, it relies on direct purchases from producers and on reducing commercial profit margins in council run stores.
Dabiri Mehr said the biggest crisis facing Tehran’s residents is housing, which he described as the national government’s responsibility. Food and living expenses, he added, are also the national government’s responsibility.
“If the goal is to solve the people’s problems, it seems that the biggest problem facing the residents of Tehran today is the housing crisis, and this dilemma cannot be solved by building an apartment building consisting of a few residential units,” he said.
Al Jazeera attempted to contact the Tehran municipality for comment but received no response.
Mayor Zakani has defended the financing arrangements. He told the local newspaper Hamshahri that the Zero Inflation initiative would not depend on direct subsidies from the municipal budget, but on purchasing goods directly from producers and reducing commercial profit margins in city run stores. Zakani also said the programme would draw on municipal resources, bank financing, and partnerships.
With inflation still punishing households and the war adding to economic pressure, the dispute in Tehran reflects a wider question about who should carry the burden of relief, and how transparently that help is delivered.
