Maskan-e Mehr system offered developers free government land to build affordable housing units for first-time owners. Since most citizens have difficulty getting small bank loans, homeowners who signed up for Mehr housing were given 99-year mortgages guaranteed by the state. Banks acted as intermediaries between developers and the government, and the central bank was instructed to print more money to pay for the scheme.
Readymade communities were erected in barren deserts, often with little regard for the on-the-ground ecological conditions. The plan was to equip each community with a range of amenities: public transportation, parks, hospitals, schools, mosques. But the actual implementation of these plans soon proved haphazard. The skyrocketing inflation rate, as well as tightening international sanctions, made these ventures unprofitable for developers, leading them to jettison projects mid-construction. Some 200,000 units lacked access to water, heating and sewage systems. The undertaking failed to achieve its goal of providing housing to the underprivileged, since most of those who could afford it under the worsening economic conditions were middle class.
Maskan-e Mehr housing scheme finally resulted one of the largest hurdles to Iran’s economic recovery.