Sustainable And Inclusive Housing in Ethiopia: A Policy Assessment
Introduction
Housing is a fundamental human need that significantly impacts the well-being of individuals and communities. In Ethiopia, the urgency for adequate and affordable housing has become a pressing national policy objective, especially as the country grapples with rapid urbanization and its associated challenges. As the second most populous and fifth least urbanized nation in Africa, Ethiopia faces a unique set of circumstances. Currently, only 21% of its population resides in urban areas, a stark contrast to the sub-Saharan Africa average of 40.4%. However, this urban population is expected to grow at an annual rate ranging from 3.8% to 5.4%, leading to increased demand for housing.
Current Housing Landscape in Inclusive Housing
Ethiopia’s urban housing market is characterized by several critical issues that necessitate immediate action. The housing stock is largely dominated by owner-occupiers, with a fragmented and informal rental market that lacks regulation. Many residents live in overcrowded conditions with low-quality housing, which exacerbates their vulnerability. The rapid urbanization has led to a significant unmet demand for affordable housing, which outpaces the current supply.The government’s response to this challenge has included ambitious housing programs aimed at increasing the quantity of affordable urban housing units. Since 2006, Ethiopia has implemented the Integrated Housing Development Programme (IHDP), which has constructed nearly 400,000 units over a span of 12 years. Despite these efforts, many IHDP units remain unaffordable for low-income households, and the program has incurred substantial costs, with estimated subsidies reaching $9 billion.
Policy Framework Assessment for Inclusive Housing
Ethiopia’s national housing policy framework aims to address the dual challenges of housing affordability and compact urban development. An analytical framework developed by the Organisation for Economic Co-operation and Development (OECD) identifies key policy instruments that can enhance both compactness and affordability in housing markets globally. This framework highlights that while Ethiopia has made strides in some areas, several critical instruments remain absent. Key findings from the assessment reveal that:
- Land Use Planning: Despite public ownership of all urban land, effective land-use planning remains a challenge. There is considerable untapped potential for improving land value capture through coordinated efforts between federal and subnational governments.
- Homeownership Programs: The IHDP has made progress in addressing urban housing demand; however, it primarily targets higher-income households, leaving lower-income groups underserved.
- Rental Market Challenges: The development of a formal rental market is hindered by inadequate regulations and a lack of transparency between landlords and tenants.
Recommendations for Improvement of Inclusive Housing
To enhance affordable housing options and promote sustainable urban development in Ethiopia, several policy recommendations are proposed:
- Fiscal Measures: Establish fiscal frameworks that encourage compactness and affordability through urban cadastres and regular property valuations. Revising impact fees and implementing development taxes can help internalize infrastructure costs while boosting local revenue.
- Infill Development: Promote infill development to minimize urban sprawl by easing zoning requirements and reducing bureaucratic hurdles for high-quality developments.
- Public-Private Partnerships (PPPs): Create incentives for investors and developers to engage in affordable rental housing projects through PPPs supported by robust legal frameworks.
- Inclusionary Zoning: Enforce inclusionary zoning policies that require private developments to allocate a portion of units for affordable rental housing.
- Tenant-Landlord Regulations: Develop clear regulations governing landlord-tenant relationships to ensure equitable access to information and legal rights for both parties.
Conclusion
Ethiopia stands at a critical juncture regarding its housing policy framework amidst rapid urbanization. While there have been notable advancements in increasing the quantity of affordable housing units through initiatives like the IHDP, significant gaps remain in addressing the needs of low-income households and creating a functional rental market. By implementing targeted policy recommendations that focus on fiscal measures, regulatory improvements, and enhanced collaboration between public and private sectors, Ethiopia can move towards achieving sustainable and inclusive cities that cater to the needs of all its residents. This assessment underscores the importance of addressing both housing affordability and compact urban development simultaneously as Ethiopia navigates its path toward sustainable growth in an increasingly urbanized world.
For further reading:
Sustainable and Inclusive Housing in Ethiopia: A policy …
National Report on Housing & Sustainable Urban Development