Tehran’s municipal authority has rolled out a set of welfare initiatives to help residents cope with rising living costs. The measures, however, have raised questions about how they are financed, whether they work, and whether the city government is taking on duties that belong to the national government.
The municipality says it has launched four projects to protect citizens. They include a housing scheme, a freeze on the prices of 12 basic goods, and a maternity support package. Critics have asked how these projects will be paid for and whether they go beyond the municipality’s traditional role.
Municipal duties under Iranian law
In Iran, municipalities are responsible for local services and urban management. The national government handles wider economic policy, including efforts to bring down inflation. Iranian law does, however, assign municipalities some duties beyond standard urban services.
Article 55 of the Municipal Law asks municipalities to provide public food markets, help keep certain essential goods affordable, and offer social welfare facilities and low-cost housing. As a result, the debate is less about whether Tehran’s municipality may provide these services and more about how large they are and who pays for them.
The Zero Inflation price freeze under scrutiny
The price-freezing initiative, known as the “Zero Inflation” project, has drawn the most controversy. It comes as year-on-year inflation reached nearly 90 percent last month, while annual food inflation hit 108.8 percent. Some people doubt how the project will be funded and whether it will be effective, while others warn it could widen the gap between the capital and other cities.
The measures are viewed as attempts to ease the severe economic strain on Tehran residents. That strain has deepened 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, said freezing some prices or providing free services would not on its own bring inflation down to zero. He asked what would happen to rents, medicines, transport and other living expenses if the 12 goods were stabilised. Akandeh argued that real progress would require controlling liquidity growth and imposing monetary discipline, which he said is nearly impossible while the war continues.
Maternity credits raise overlap and transparency concerns
The municipality has also introduced a maternity support programme. It offers mothers of children born this year monthly credits worth up to 40 million rials, or about $15, for two years for each newborn.
Akandeh pointed to institutional overlap, noting that the national government already runs a similar package that provides monthly payments to all newborns across the country, not only in Tehran. He warned that if the municipal package operates independently, a Tehran family could benefit from both programmes at the same time.
Receiving support from both schemes would not in itself indicate wrongdoing. Critics, however, are asking whether it is an appropriate use of Tehran’s municipal resources, particularly as the city faces competing spending demands.
Amir Dabiri Mehr, a former adviser in the Tehran municipality, said that supporting the homeless is part of the municipality’s social responsibilities. He argued that the real problem is a lack of transparency, noting that the municipality is funded through taxes and building density licences. Dabiri Mehr said residents have the right to know what the municipality spends on its original tasks and on the tasks it has chosen for itself, and where it gets its money.
Municipality defends its funding model and housing role
A newspaper affiliated with the municipality said the Zero Inflation project is not funded through municipal budget subsidies. Instead, it relies on direct purchases from producers and reduced profit margins in council-run stores. Zakani made a similar case to a local daily, adding that the programme would also draw on municipal resources, bank financing and partnerships.
Dabiri Mehr countered that the biggest crisis facing Tehran residents is housing, which he said is the responsibility of the national government. Food and living costs fall under the same authority, he added. He said that if the aim is to solve residents’ problems, building a small apartment block would not resolve the housing dilemma.
Comment was sought from the Tehran municipality, but no response was received.
