Natnael
Belachew, a 42-year-old resident of Italy, grew up in the Kera area
of the Kirkos District. He moved to Italy in 1990 when he was 25 to
make a better life for "The schools in Italy teach in Italian," said
Natnael. "I want my children himself.
During his
17-year stay in Italy, he married and had two children. Now that his
children have both reached elementary school age, he wants to move
his family ba ck to his native Addis Abeba to grow up in a more
Ethiopian society. to speak, read and use the language that I grew
up with."
Natnael has
temporarily settled in Arosa Hotel on Belay Zeleke Street paying 100
Br a day and has been on an intense search to purchase or
temporarily rent a home where he and his family can settle down.
His efforts so
far have been mostly in vain, with two major obstacles in his path.
On his first return home six years ago, Natnael had reached an
agreement with the owner of a home to his liking. Despite his good
intentions and enthusiasm, the 40,000 Br that he had given as a down
payment was stolen by people who turned out not to be the owners of
the home in question.
"I was
devastated," he said "It is not like I did not have to work hard for
that money. I even began to loose faith in people."
But his fear of
being deceived again is the last of his worries. Since his first
trip to Addis, the drastic increase in the prices of houses and rent
has been almost unbecoming to him.
As a result,
Natnael has begun scouring the plot auction board and waiting in
anticipation of lease plots to be auctioned off for residences.
Nefassilklafto district gave him his opportunity, pending an auction
next week.
But this has
not brought complete ease to his mind, still unwilling to leave
Addis without finding a property to buy or rent.
Natnel is just
a drop in the ocean of home buyers and renters that have faced hefty
price increases.
Established in
1806, Addis Abeba rests on 54,000ht and is home to close 4.5 million
people. There are 527,000 homes in the capital, representing a
shortage of 350,000.
In addition to
the 15pc annual population increase, Addis Abeba is the main
relocation destination for members of the Ethiopian Diaspora who
decide to move back to Ethiopia.
The increase in
demand for homes without the complementary increase in supply has
been a problem, not only for those looking to rent and purchase, but
also for brokers who have ended up with more disgruntled customers
of late.
Girum Bekelle,
a broker for 15 years, told Fortune that his business has
been steadily declining in the past couple of years since the boom
in the construction sector.
"A house in
Bole that would have sold for 2.5 million Br two years ago averages
between 3.5 million and four million Birr these days." He attributes
this to the increase in demand "There are more buyers and renters in
Addis these days so prices have increased" he said.
Girum said that
most of the homes that he sells or rents are usually older
structures that may need repair but are expensive regardless, simply
because of market prices and housing shortages.
The large gap
in the housing supply in Addis Abeba was a main focus for the former
Addis Abeba provisional City Administration under Arkebe Okubay.
In 2005, the
Administration allocated and leased plots to homeowners
associations, although auctions for individuals to purchase
properties designated for residential purposes were scarce.
As it became
increasingly difficult to lease residential plots, the prices of
older homes began showing a steady increase, with the people who
wanted plots switching their search to existing structures.
Some, desperate
to get their hands on a plot to build on, even went so far as to
purchase old homes, demolish them and build a larger or more modern
home on the plot.
"I tried for
almost a year to find a reasonably sized empty plot to build my
house" said a member of the Diaspora recently relocated to Addis.
"The city was not auctioning off residential plots unless you were a
member of some association, and individuals were asking for insanely
high prices simply because they knew they had the upper hand."
After
exhausting all his options, he found an old villa which rested on a
plot in the Megenagne area.
"I bought it
for 1.2 million Br, demolished it and built the house that I wanted
on it," he said.
But those same
older homes for sale are also the some sort are on the rental market
as well.
"Because of the
presence of international residents and people who come here for
months at a time, landlords have been taking advantage of higher
prices that they can large to people with larger budgets," said
Girum.
This has made
the rental market for local residents
very difficult. The up-coming Ethiopian
Millennium celebrations have only added more fuel to this
fire, with landlords evicting tenants or unexpectedly raising prices
citing the holiday and the possibility of higher earnings as an
excuse.
One man, who
asked to remain anonymous, recently wed, rented a two-room space in
the compound of his landlords. His wife, who was pregnant, delivered
her baby and remained in the hospital for a few days. When the happy
father brought his new family home, his landlord informed him that
he would have to leave as soon as possible.
"I offered to
increase the amount of rent I was paying; I even begged" he told
Fortune. "But they would not budge, they said their children would
be coming home for the Millennium and they needed to renovate, and
furnish the space we were in for them."
Being a
middle-class earner, and supporter of his family, he has not been
able to find a suitable substitute.
"My current
budget can only get me is a couple of dirty rooms in a shanty area,"
said the newly wed.
It was with
such people in mind and to curb the housing shortages, that the
provisional Administration began the condominium housing development
project and began giving out land incentives to real estate
developers. The city government embarked upon a number of projects
to act upon the deep rooted housing problems of the city. Aimed at
using urban land and services with more efficiency, cost
effectiveness and of minimising the gap between supply and demand,
the provisional government issued the first condominium regulation
in 2004.
The three-year
Urban Development and Good Governance plan (2004-2006) which gave
focus to housing in tandem with the regulation was put in place. A
target was set to halve the existing housing shortages by
constructing up to 50,000 housing units each year.
This ambitious
programme was disrupted during the May 2005 elections and the unrest
that resulted in Addis Abeba. During this transitional period and
amidst an increase in the prices or construction materials, the
projects fell significantly behind schedule.
There were
31,756 units begun in the 2005/2006 budget year, although they were
not completed prior to the takeover or the Addis Abeba City
Caretaker Administration (AACCA).
The
Administration completed this phase and it plans the construction of
an additional 33,000 homes in the 2006/2007 budget year. Only a
quarter of the first project has been completed, while the second
has only begun construction on 5,000 units. The ground breaking took
place just two months ago, approaching the end of the budget year.
The lagging
pace of this project has done nothing to comfort residents that have
been anticipating receiving condominium homes form AACCA.
Teklu Haile,
resident of Kebelle 15/16 in Arade District, told Fortune that the
current state of condominium construction has caused him to lose
hope.
"First they
give you hope saying the city will supply houses" said Teklu. "Then
you wait and get nothing; this is extremely frustrating."
But city run
hosing projects have not been the only potential fix facing delays
and a variety of problems. There are over 120 real estate developers
active in the capital compared to only three just five years ago.
The increase is
largely due to the incentives that were initiated by the provisional
Administration in order to have the private sector involved in
adverting the city's housing.
Real estate
companies are required to build over 50 units, 70pc of which must be
residential. The developers are also required to use land
efficiently and use cost-effective technology during construction to
decrease the final selling prices of the homes. Such companies are
given a free 50sqm plot for every family home that they build. This
incentive has attracted a large number of investors to the sector,
although they have not been able to move on their projects according
to plan.
Many attribute
the delays to the crippling cement shortages that hit the country
last year, coupled with an overall drastic increase in the prices of
construction materials.
But the
projects that are being undertaken by most real estate developers
are not in the price range of middle and lower income earning
groups, those most affected by housing shortages.
"Most real
estate developers create their business plans and design homes with
members of the Diaspora as their main targets" an urban developer
told Fortune. "Drive through our real estate developments and
it is like being in Western suburbia."
Having been
awarded a 160,000sqm plot and with a budget of 700 million Br, the
real estate project located on the route to CMC plans to construct
200 homes for the first phase of its project.
"It is not that
we will not provide homes to local residents," the developer said.
"In fact, we have more than our fair share of local clients, but
Ethiopians living abroad looking to move back have higher purchasing
power."
"With the
prices of construction materials and the increase in lease prices,
Diaspora members are a safer business target," he added. "There have
been only four lease auctions so far this year and the prices were
sky high. Plots are selling for beyond their value and land is
monopolised by a select few who can afford it
Menkir Mulat,
has been one of Addis' residents that has felt the tightening of
space and resultant lack of adequate housing in the capital.
Two weeks ago,
Menkir was informed of a 200 Br increase on the 300 Br rent he
previously paid. Unable to afford this, his search for a home within
his price range in Kebele 15/16 of Kirkos district, was fruitless.
The only place
he could find an affordable house was in Sebeta, 24Km outside of
Addis Abeba.
But the rental
inconvenience is not the only part of the housing problem that
Menkir has experienced. In hopes of becoming a home-owner and
building a house, he had participated in the first two lease
auctions held this budget year. Both times the winners had a 70pc or
more margin on the prices that he offered.
"The winner
offered 700 Br more per square metre" said Menkir. "That is two
months rent and change, I can not afford that."
In addition to
residential plot lease options, the City Administration also leases
plots to homeowners associations as another option. Similar to
residential plot auctions, this system too has seen significant
decrease in usage, with 200 such associations receiving their last
in 2005.
Addis Abeba has
been growing rapidly; it took the city 90 years to hit the million
mark, but only 30 years to triple that figure and pass three
million.
This rapid
growth in population and the corresponding demand for land has
resulted in fast physical expansion of the city. The built up area
exhibited a marked expansion between 1975 and 1985, fully consuming
21,000ht of land and approaching Entoto Mountain in the north.
Following the
approval of the 1986 master plan the city administrative boundary
grew to 54,000ht and the population has increased almost two and a
half times.
Addis Abeba has
currently consumed more than 75pc of its potential area for
development. According to the new City Development Plan for
2001-2010, the potential expansion area of 10,00ht within the
administrative boundary could be exhausted by 2010.
Yeraswork
Admsse (PhD), assistant professor at the Department of Sociology and
Social Anthropology at Addis Abeba University (AAU), told Fortune
that the increase in lease, rental, and house prices is a direct and
even expected result of the increase in the gap between demand and
supply.
"Government
needs to make a concerted effort to address this problem," said
Yeraswork. "There are manly plots in the city owned publicly that
are sitting idle or have become scrap yards; these could be leased
and developed as to help curb the problem."
But more vital,
according to him, would be the completion of the condominium
projects in order to address the shortages in housing experienced by
lower income groups, the larger part of the urban population.
For now, the
common trend amongst residents is fruitless searches and unanswered
complaints.
"These prices
are ridiculous," Natnael told Fortune, "I have been here one
month unable to find anything suitable."
