Ethiopia’s rental control proclamation, intended to stabilize the housing market, has placed both landlords and tenants under significant financial strain, according to the Ethiopian Consumers’ Rights Protection Association.
Dr. Ashagre Zewdu, Board Chairperson of the association, stated that while the proclamation was designed to curb skyrocketing rents, significant loopholes in its enforcement have made daily life increasingly difficult for both parties involved in rental agreements.
A primary concern raised by the association is the tax regime enforced by the Ministry of Revenue. Dr. Ashagre explained that landlords are facing a complex array of tax obligations on their rental properties.
Consequently, to meet these rising tax demands, many landlords feel compelled to pass the costs on to their tenants by increasing monthly rents a move that directly contradicts the government’s intent to alleviate the cost of living.
Furthermore, the association highlighted that in areas designated for government housing projects such as the 40/60 condominium sites authorities have imposed artificial rent floors. Dr. Ashagre described this as an overreach, noting that some government officials are essentially acting as brokers.
He alleged that authorities sometimes pressure landlords to set higher minimum prices to satisfy tax revenue targets, or penalize those who attempt to rent below these government-mandated rates.
This controversy arises as the Addis Ababa Housing Development Bureau recently released a study highlighting the severity of the housing crisis. According to Dr. Norahun Andarge, a lead researcher at the Addis Ababa Leadership Academy, without government intervention, the city's middle-class population would have faced severe displacement.
The study revealed a stark economic reality: the average Ethiopian is spending up to 80% of their monthly income on rent. This significantly exceeds the 30% global standard for housing affordability. Based on these findings, the government has moved to cap annual rent increases at 11.5%.
For years, the Ethiopian Consumers’ Rights Protection Association has limited its role to advocacy and public awareness. However, Dr. Ashagre confirmed that the organization has reached a breaking point, stating that simple advocacy is no longer yielding the necessary changes.
Starting next year, the association plans to shift its strategy toward legal confrontation. Dr. Ashagre announced that the organization is preparing to challenge these government-enforced measures in court.
The strategy includes hiring legal counsel to seek injunctions against policies deemed harmful to consumers and ensuring that government actions are subjected to legal scrutiny.
In response, the Addis Ababa Housing Development Bureau maintains that its data-driven approach is necessary. The Bureau insists that it will continue to manage rent valuations to ensure market stability and reduce the overall cost-of-living pressure currently facing the city’s residents.
