An Assessment of Urban Development Housing Policy and Residential Real Estate Development in Addis Ababa: Opportunities and Challenges

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Addis Ababa University


The main purpose of the study was to assess the opportunities and challenges of urban development housing policy and residential real estate development in Addis Ababa. Mixed research method, that is both quantitative and qualitative research methods, was employed in the study. Moreover, a case study was used in tentionally to deeply investigate the overall condition of residential real estate development in the city of Addis Ababa. To achieve the purpose, two residential real estates i.e., Ayat and Sunshine real estates were selected for the case study. These residential real estates were selected by using purposive sampling in order to include the most experienced developers which started construction earlier and transferred houses for clients. The residents were selected using propoltionate stratified and systematic sampling techniques. The stratified sampling was taken by considering the housing typologies i. e. Villa and Apartment types. The study employed questionnaire, interview, observation, and document review as tools of data collection. The resu lt of the study shows that the Addis Ababa housing policy could be considered as targeted policy in its strategy, aiming at provision of houses for all sections of the society. The housing development agency has been stri ving to meet its goals despite the emerging challenges. The policy allows individuals, cooperatives, real estates, NGOs, and governmental organizations to construct houses with different market prices in order to alleviate the existing shelter problem in the city. Accordingly, 125 residential real estate developers involved themselves in the production of houses. However, the finding shows that only few residential real estates were active developers, focusing predominantly on high income groups in the city. Even though they have been producing houses and creating job opportunities, particularly for the poor people of the society, majority of the real estate developers misused the plots. For instance, they have used the land as collateral for loans from banks. It was also discovered that they have never started construction on the land they took on time and that they have even transferred the plot to a third party without the consent of the city administration. Ap31t from this, they have been reported to construct houses illegally. On the other hand, it was found that the residential real estate developers have faced challenges like limited supply and high price .. t of land, low availability and high cost of construction materials, low availability of finance as well as infrastructure, and service problems. Based on the findings, it was recommended that the City Government of Addis Ababa should control the overall activities of the developers in line with the objectives of Urban Development Housing Policy of the city in order to keep the contribution of residential real estates in producing decent houses. Besides, it is essential for the city administration to formulate a comprehensive viable policy and strategies regarding real estate development as well as housing. The policy then would become involved in the process of creating well planned, defined and splendid built up environment of Addis Ababa.



Urban Development Housing Policy