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The Ministry of Works and Urban Development (MoWUD)
approved a plan to lay off nearly 90pc of the staff
at the Rented Houses Agency (RHA) as part of efforts
to overhaul the ineffective state entity in charge
of renting government–owned housing.
RHA, which rents 16,000 government properties mostly
in Addis Abeba and Dire Dawa, will fire 1,000 guards
and cleaners now on its staff, and instead ask its
tenants to pay for those services, should they
require them. RHA will also lay off 600 workers
involved in renovation of its properties and instead
outsource the work as needed.
Similarly, the agency also plans to outsource
responsibility for collecting house rents to banks,
which will result in another 100 workers losing
their jobs. In total, the lay-offs will cut RHA’s
staff from 2,800 to less than 350 by June 8, 2008, a
reliable source told Fortune.
The ministry plans to extend welfare benefits to the
workers losing their jobs in addition to granting
them retirement benefits, a senior official at the
agency told Fortune.
The move is part of a complete overhaul of the RHA,
which includes a bill approved by parliament to
rename the RHA as the Government Houses Agency (GHA)
and give the new agency more powers to enforce
collection of rent and compliance with contracts.
The RHA is currently bogged down in 1,006 court
cases over 120 million Br in unpaid rent from
tenants. Furthermore, tenants routinely violate
their contracts by using residential properties for
business or sub-letting them.
The MoWUD, in light of the RHA’s problems, formed
three committees of experts to undertake studies on
how the agency can be made more effective to help
tackle the housing shortage in Ethiopia’s urban
areas. One of the three committees made
recommendations for an overall restructuring, while
another dealt with the agency’s plans to expand into
real estate development. The third committee
formulated recommendations for changes to the
agency’s administration.
The recommendations from the three committees were
submitted two months ago, and the MoWUD approved
them this week, scheduling implementation for June
next year. Meanwhile, ministry proposed the new
legislation for the agency to the Council of
Ministries for discussion, and early last month the
House of Peoples Representatives approved the bill
that would reform and rename the RHA.
Unlike the RHA, the GHA will have the power to evict
contract-violating tenants without court consent and
to order the demolition of homes illegally built on
state land. The proclamation also makes the agency’s
staff subject to civil servant law, and eliminates
the staff’s labour union.
The construction of low-income condominiums will be
one of the new objectives of the GHA. Real estate
developers in the private sector usually target
middle- and high-income sectors, so the agency is
intended to compensate for the limits of the private
market. The ministry, however, wants the agency to
build real-estate through contractors. Currently,
the agency is preparing five new designs and some
time in mid next year, the agency will start its
real-estate development.
RHA was established a year after a proclamation that
confiscated urban land and vacant houses in 1975.
Grossing a 50 million Br annual profit, the agency
has remained an autonomous state organ, despite
tenants’ complaints over the services it renders. In
its 33 years of existence, the agency has gone
through various restructuring plans, and is now
under the supervision of MoWUD.
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