July 1, 2021

Soaring house rents leaves Addis Ababa dwellers desperate

City: Addis AbabaEconomyLifestyle

The housing problem is becoming more and more serious.

Avatar: Solomon Yimer
By Solomon Yimer

Solomon is a content editor at Addis Zeybe. He has worked in print and web journalism for six years.

Soaring house rents leaves Addis Ababa dwellers desperate

In Ethiopia, the wet season is coming again. Many enjoy the rain as it cools down the hot temperatures, but for some, it is a headache because of the problems that come with the inclement weather.

Tariku Ayalew, 43 is a civil servant in a government office in Addis Ababa who earns 2,500 birr a month. He lives in a rental house with his wife and two children around Shiromeda, on the outskirts of Addis. “Every time summer comes, the family worries about the leaking roof which prevents all of us from sleeping at night. Water is everywhere in the room.”

But leaking roofs are not the only problem – with rents again on the rise. “I pay 1,500 birr for this 10-square meter mud wall room which is expensive,” says Tariku. “I have searched all over Addis Ababa for affordable rent, but with my salary, I could not find anything.

“I pay more than half of my salary for house rent and my wife is a daily laborer with a daily wage who gets 150 birr only. At the end of every month, we are worried about how we can pay our house rent and feed our children with the rest.” He adds: “We are living through a miracle.”    

However, this miracle doesn't work for all. Three months ago Taye Adugna, a street vendor, could not afford to pay his house rent which had been rising and he became homeless. Now he resides on the streets in Addis Ababa, around Kebena, where he runs his business.

Though the government has attempted to tackle housing problems by introducing housing schemes, little seems to have been done to alleviate these deep-rooted social problems in cities like Addis Ababa.

The government also stands accused of doing nothing in the rental housing space since no government policy regulates this sector. Meanwhile, the price of private house rent is escalating alarmingly.

As this applies to a large number of urban dwellers, a majority of the population who live in rental housing in Addis Ababa are affected.

“I know people who pay a third of their salary for house rent, which is really odd,” said Henok Mekuanint, 35, a business person who lives in a three-room rental house paying 15,000 birr a month. 

“These landlords in the city have no reason to increase house rents. Two months ago, I was first asked to pay 12,000 birr. Then they asked me to pay an additional 500 only after two months” he added.  “I think the government needs to do something to regulate rent housing prices.”

With an increase in rural-to-urban migration, housing in cities remains one of Ethiopia’s most pressing challenges. With a 66.5% share of the country’s housing units, the private rental arrangement is prevalent in most cities in Ethiopia, a research document from the Ethiopian Institute of Architecture, Building Construction, and City Development, (EiABC) indicates.

Another issue exacerbating the housing problem is the emergence of agents (most of whom are not licensed) as integral players in the rental market. They possess the power to evict tenants and raise rental prices. 

“Real estate agents are the main reasons for this rapid increase in house rent in Addis Ababa,” said Henock. He also said that the government needs to set rent-control guidelines which limit how much landlords can increase rent by each year.

Tariku also stresses government interference in the rental housing sector. "Last year my house rent was 1,000 birr and this year it rose to 1,500, 50 percent increase," he explained. "We are paying the amount which is settled only by the owners, we have no say because we have no choice."

Taye does not understand why the city administration is silent on the issue of housing rents. 

"I think it is the major cause of the inflation in the city,” he says. “As rents go up, so does everything else.  

However, experts take a  different view. Yohannes Mekonnen is a lecturer at Addis Ababa University, Ethiopian Institute of Architecture, Building Construction and City Development, (EiABC). “For many years the government’s focus in the housing sector was very poor, as it tried to solve the problems without reasonable participation from the public sector. At the same time, it failed to provide affordable housing for residents of the city.

“In order to reduce the housing problem the governments need to focus on constructing low-budget houses for city residents, and this would help ease the burden.”

Remembering the government’s attempt to regulate the public house rent price years ago, Yohannes, who has closely followed the sector for more than a decade, sees it as the wrong solution to the problem.

Regulating the price of very limited housing stock will do nothing to solve Addis Ababa’s housing problem. He believes it is better if the government works on the construction of low-budget houses, with the involvement of the private construction sectors.

As of 2020, the government, through the Integrated Housing Development Programme (IHDP), has built 400,000 condominiums, indicating that there is still a significant supply gap, according to the World Economic Forum.

Yohannes acknowledges the government’s recent efforts to increase homeownership opportunities, which is included in Ethiopia’s 10-year development master plan. It has set out to build 4.4 million houses over the next decade. The private sector is expected to meet 80 percent of this target.

However, the government has not introduced any plans to regulate or build any low-budget rental housing or prepare a kind of approach to support the private sector in investing in rental houses in cities like Addis Ababa.