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In a drastic turnabout to expectations that the
Rented Houses Agency (RHA) would privatise
residences under its supervision and dissolve, it
rather is to join the real estate sector with
constructions that it will undertake on 17 sites in
Addis Abeba.
The first project has begun at a cost of 13.8
million Br. In the past 17 years since the seizure
of power by the Ethiopian Peoples Revolutionary
Democratic Front (EPRDF) in 1991, the Agency has
never engaged in construction.
The initial intention of the government was to
dissolve the Agency after it transferred the houses
under its custodianship to end users in sales, an
official at the Agency told Fortune.
“However,
following the decision by the Ministry of Works and
Urban Development (MoWUD) which ordered the Agency
to join the real estate sector, it has finalised
preparations to undertake its constructions,” the
official said.
The first eight-storey building of the Agency will
be installed after demolishing a residence located
in Wereda 17, Kebele 20, which the Agency owns. The
design of this edifice, which accommodates 36
households, was done by the state-owned Construction
Design SC.
The last time the Agency constructed real estate was
in 1983 in Bole, CMC and Kolfe Keranyo districts.
Afterwards, it only undertook repairs on the
existing homes.
In an attempt to bring the Agency’s holdings into an
incentive-oriented system, a proclamation was issued
in October 2005 to privatise the properties of the
Agency. However, this move has yet to be enacted by
the Agency.
Fully financing the project from its own coffer, the
Agency has received the go-ahead as MoWUD has
accepted its proposal of the real estate project.
The constructions, therefore, would be launched in
September 2007, an official at the Agency told
Fortune.
Since the time it was created in 1976, the Agency
finalised the construction of 366 houses and took
control of 815 houses confiscated by the military
regime. Until 1991, the Agency invested 524.5
million Br on the construction and repair of houses
and had 25,374 houses and 25 hostels under its
supervision until 1993.
However, the Agency lost 5,772 houses following the
decision passed by the Council of Ministers to
transfer houses located in regional states to their
respective regional administrations, except those in
Addis Abeba and Dire Dawa.
RHA lost part of the remaining 19,602 houses due to
the demolishing works that have been carried out in
Addis Abeba for developmental purposes, which
dwindled the number of houses under its supervision
to 18,260.
The Agency has been earning an average of 50 million
Br since 1976. In 2006/07 alone, it managed to
collect 160 million Br from the tenants living in
its houses.
Though RHA’s authority spans from renting to selling
houses, it, until the latest decision to enter the
real estate sector, has been focusing only on the
former since 1991.
Concentrating on the working class, the Agency has
plans to transfer the houses to end users through
sales and rent, the Agency official told Fortune.
“The construction sites, where the real estates
would be lying, are selected from its own holdings
on the basis of the size of free space available,
the status of the aging houses and the amount of
income they generate,” the official said.
Excited by the move, Tariku Legesse, a resident in
Bole District, Kebele 20, told Fortune that
he sees a glimmer of hope of acquiring one of the
to-be constructed houses when they are finalised. He
currently lives in a privately owned modestly sized
house paying 600 Br a month.
“It could have partially curbed the housing shortage
in the city if the Agency had made this decision
earlier,” said Tariku.
The five-year strategic plan of the Addis Abeba City
designed in October 1998 showed that there were
350,000 houses for the then 2.3 million residents of
the city. Of these houses 112,000 were used for
commercial purposes while the balance was designated
residential. According to the strategic plan, there
was a shortage of 460,000 houses in the city at the
time.
After 10 years, currently there are 580,000 houses
supplying an estimated four million residents of the
city. Information obtained from MoWUD shows that
there is still a shortage of over 400,000 houses in
the metropolis.
From 1995 to 2006, 661hct of land was given to real
estate developers in 94 sites. However, these
developers could not address the housing shortages
of the masses as their price tags are only
affordable by the affluent.
Based on the current market prices in the real
estate sector, the minimum amount required is 13,000
Br per square metre, way beyond the capacity of the
urban working class.
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