What Drives Urban Densification? Free Market versus Government Planning in Iran

Is the compact city more likely to materialize if development is guided by the “invisible hand” of the market or the government’s “iron fist”? This article explores this question in the context of Shiraz, a medium-sized, medium-density city in south-central Iran. Through a series of longitudinal analyses, we examine the roles of the market and planning along thirty years, from the mid-1980s through the mid-2010s. The study reveals that since the mid-2000s, market forces have superseded government planning in guiding urban development in Shiraz. The government has reduced its interventions in the market: it no longer issues public land for housing development. Combined with natural constraints and sociodemographic pressures, this new planning/market balance has produced a denser and more compact city than ever before. Shiraz has been transformed from a city of villas, nightingales, and gardens into one dominated by mid- and high-rise apartment towers. The direction and intensity of development have not followed the recommendations of local planners and plans. Rather, they have been driven primarily by developers and residents. Regardless, density and compactness are generally positive—as long as housing and infrastructure quality are sustained, and residents have good access to parks, open spaces, and natural sunlight.