BY ABEBE WOLDEGIORGIS
According to the United Nations Charter, obtaining residential house is the right of all citizens. The Ethiopian constitution also endorsed that citizens have the right to live in a place where suitable environment is availed and constructed in the standardized manner. In the country where population growth is the highest such as Ethiopia meeting the basic needs of citizens such as food, clean water, residential house with better sewerage system is not an easy one and needs land, huge amount of money, man power and technology.
The construction of residential houses in the city also must put account citizens affording capacity, whether it is environment friendly, go in line with the master plan. The construction of residential houses in addition to meeting citizen’s demand, it has various values.
The sector creates job opportunity to thousands, market opportunities to cement industries, query, electric line installers and moreover boost the transportation sector.
In the city the demand for residential house is increasing from time to time due to population growth. The natural birth and rural –urban migration put pressure on demand. On the other hand, due to shortage of supply and high construction cost the price of house is increasing from time to time and for most residents is beyond their paying capacity.
In the past various approaches were employed in house construction depending on the land ownership system.
During the imperial era land was privately owned and transacted based on demand and supply. That time the price of land was not as expensive as today and was not monopolized by the government. The house construction materials also were not expensive as such. Though the municipality had master plan most houses were muddy with on average two rooms. In that era, the price of rent house was cheap and affordable to the ordinary citizens.
However, due to the population growth and rural-urban migration the house demand was increasing. In fact poverty was rampant and Shanty places were scattered here and there which intern overshadowed the then attractive features of the city. Approximately, that time the number of population was half a million.
The down fall of the imperial regime by the popular movement in 1974 totally changed the land ownership system and the house construction modality. The military government nationalized the land and other means of production by the proclamation in which still existing.
Extra residential houses which had been built by the urban resident’s meager resources were also confiscated and begun to be administered by the Kebele officials. Unlike the imperial era, land lost its transaction value and it became in accessible to ordinary citizens. The construction of residential houses through free market by individuals also halted and after years, the demand for land and houses is increased.
The private sector engaged in house construction which was flourishing in the imperial era due to the emergence of socialist oriented government was curtailed. Some local private companies also left their country due to coercive environment.
To fill the gap, the regime established the Ministry of House and Urban Development. The government allocated huge amount of budget for house construction. In addition, to some extent it obtained support from the multinational institutions with regard to urban development scheme.
By this scheme many apartments were constructed and mostly supplied to the high government officials in the very lower rent.
Urban utilities such as piped water and electric service and sewerage system were moderately improved and the city status was also upgraded as compared to the previous era. The city administration also tried its level best to modernize the city through planning
In addition it took other steps to meet the house demand and to that end the government announced that citizens can construct their houses through organized themselves by association. Land was availed in the lower price as the government perused socialist economic policy the price was affordable to the ordinary citizens. Bank loan with very fair interest rate was provided to the associations engaged in house construction.
Construction inputs were also availed in affordable price. Most of the members of the house construction associations were civil servants and others work in private companies who can save money permanently. The poor who did not have fixed income were not eligible to be the members of the associations. In the Dergue era as mentioned above residential houses were constructed by the government and by associations and the construction was carried out based on the city master plan and the scheme was environment friendly.
The dawn fall of the Dergue and the assuming of power by EPRDF totally changing the land tenure system in the urban centers while in the rural part continued as it was. The gap between demand and supply of house market was widening and access to land for house construction was also continued to very intact. Monopoly of land ownership by the government both in rural and urban center was continued. But what the new phenomena occurred in the urban center was that the introducing of new law indicates the provision of land in lease system which was totally practiced in the advanced capitalist countries. The system made the price very expensive and provided by the auction system. Leasing land for hundred years or so was intact to the ordinary citizens. It is only affordable to the reach and foreign companies. The high price of land also brought its own inflation pressure on the price of houses. Because investors before they construct the building for office work of for real estate they will pay huge amount of money for land based on the size of the land offered based on the auction. Real estates developed by investors in fact could help to meet the housing demand but it was very expensive only the haves could afford. It is undeniable fact that the development of real estate formed capital, enhance the city administration revenue income, introduced new construction technology, strengthen the private sector involvement in the economy more over beautify the city as it is metropolitan.
Addis Ababa is the capital of Africa which is the resident of more than 100 embassies from all over the world. Therefore the urban development works carried out in the last 25 upgraded the city value in relation with other African cities and in this regard the credit goes to the government. According to some studies the population is grew fast and the land area also grew by three fold in the last three decades. More infrastructures are developed in the aspect of roads, sewerage system, and electric power and others. But in meeting the house demand particularly the middle and the lower class segment of the society still needs far to go. The government in order the resolve housing problem of the ordinary citizens it introduced the construction of condominium houses since 2005. Most civil servants, private workers and employees registered to obtain the house in this program. They registered by 10/90, 20/80 and later by 40/60 and each registered person save money monthly based on the requirement in the commercial Bank of Ethiopia. In return the bank provides loan to the City Administration House Construction Agency. Since then hundreds of thousands could obtain residential rooms with studio, one, two and three bed rooms. But as mentioned earlier the house demand in the city has been unmeet due to population growth and the sluggish pace of the house construction projects. The projected job opportunities to thousands and create market for input suppliers but to date more than millions are waiting to get the house.
When the project is delay the cost of construction inputs are growing and left most registered citizens left in desperate. The project was intended to address housing problem of the lower class of the city but the objective is derailed. The heavy handed role of brokers in the housing market disrupted the normal transaction. When some win the lottery to obtain the house fail to pay the down payment which is 20 percent of the total cost forced to sell and the intervention of the brokers makes the transaction very expensive and from time to time both the house rent and the house price is increasing and aggravates inflation in the hole economy.
The housing construction in addition to trying to narrow the gap between demand and supply in the market, it played crucial role in renewing shanty areas which are unfriendly to the environment. Resident in the old areas were displaced and resettled in new areas where condominium houses are built. The construction of new residential and real estates in the renewed areas changed the feature of the city to the better. The other modality implemented by the government to meet the residential houses is constructing through association.
Many house constructing associations are established by residents and the government provides land by lease system for hundred years. In this approach many members of the association could be the owner of the house and still continue to construct. But still the gap between demand and supply in housing market is widening unprecedentedly. Based on the witnessed fact constructing the house by the government ownership is not economically feasible and open the get for corruption. Therefore, the government should pull itself from such venture and should play only as facilitator.
Editor’s Note: The views entertained in this article do not necessarily reflect the stance of The Ethiopian Herald
The Ethiopian Herald 17 July 2022
