The Addis Ababa Housing Development and Administration Bureau has announced a 11.5% ceiling on annual rent increases for the 2019 fiscal year, aimed at easing the cost-of-living burden on residents and curbing informal practices in the rental market.
This decision, based on existing rent control regulations, was reportedly informed by a scientific study that took into account the paying capacity of the city's residents.
Following the announcement, the Bureau confirmed that mandatory registration for all new landlord-tenant lease renewals officially began today, July 1, 2018 (E.C.), across all sub-city housing administration offices.
The Bureau emphasized that all rent adjustments and contract renewals must be based strictly on the rates established in previous lease agreements.To enforce compliance, the Bureau has placed a strict ban on any practices that bypass the new registration process or the mandated price ceiling.
Specifically, the government has outlawed "special" or "village" agreements that fall outside official registration channels, unauthorized neighborhood-level contracts, and any illegal leasing arrangements regarding condominium units. The Bureau warned that any landlord or tenant found violating these directives or exceeding the 11.5% price cap will face legal action.
The new directive has drawn mixed reactions. Dr. Ashagre Zewdu, Board Chairperson of the Consumer Rights Protection Organization, pointed out that for the past two years, landlords and tenants have often bypassed regulations by paying only a portion of rent through banks for tax purposes while settling the remainder in cash.
He questioned the government’s capacity to effectively monitor and enforce the new rules, noting that the current study lacks concrete solutions for these long-standing operational challenges.
In response, Kidist Woldegiorgis, head of the Addis Ababa Housing Development and Administration Bureau, defended the decision, stating that the study was designed to balance the interests of both landlords and tenants in light of current economic conditions.
She added that oversight committees have been established to address public complaints and that the Bureau is committed to modernizing its processes.
Experts suggest that to address the city’s housing shortage effectively, the government should prioritize building and providing affordable housing directly.
Furthermore, they argue that implementing a legal framework requiring private developers to allocate a portion of their units for rent, combined with increased overall supply, is essential to stabilizing the rental market.
