Fortune News | Jun 23,2019
Tenants of state-owned commercial units vow to take their case to the Prime Minister’s Office if they do not get a response from the executives of the Federal Housing Corporation. They requested that the Corporation reconsider its decision after rental fees were amended upwards late last year.
Around 3,000 tenants held a meeting at Global Hotel on Sierra Leone Street on January 23, 2019. After opening remarks by Semehal Mekonnen, chairperson of the tenant’s committee, the ''lawfulness'' and procedures of the rental increases were discussed.
Two months ago the Corporation announced rental fee hikes by an average of 2,090pc for the first time in the Corporation's 43 years history. The rental fee amendment was applied on 6,128 commercial units, though it was subsequently revised.
Rental fees levied on non-governmental organisations (NGO), embassies, government offices and civil society tenants were lowered. The corporation reduced a square meter rental fee for these agencies from 339 to 140 Br. It has also lowered the 92 dollars a square meter fee imposed on embassies to 50 dollars.
The increases on commercial units were applied progressively over three years, rising yearly by 35pc, 70pc and 100pc. After delivering the announcement, the Corporation warned tenants to vacate the units if they disagree with the revised fees.
Unsatisfied, the tenants held a meeting mid-last week and agreed on five declarations that they intend to submit to the management of the Corporation.
The committee proposed a rental fee of 71.50 Br a square metre until a new rental fee is agreed upon. They also called for the extension of the deadline to their rental agreement, and for the Corporation to cease and desist from asserting that the tenants are paying very low rents.
Additionally, they called for a new directive to be drafted that will govern the relationships between the tenants and the Corporation; and for the suspension of the rental adjustment until another assessment is conducted.
The tenant committee submitted these requests to the Corporation the next day following a meeting held on January 24, 2019.
“We aren't afraid of the decision made by the Corporation,” said Dereje Belay, deputy chairperson of the committee.
“We will continue our appeal up to the upper most level of the government body.”
The committee has also decided to bring the matter to the Grievance Hearing Committee of the Prime Minister’s Office on January 28, 2018.
"The Corporation didn't know of the meeting and neither will it have any effect on the decision that has already been made," Reshad Kemal, CEO of the Corporation, responded to Fortune.
On Friday, the final deadline for renewal of the contract for new rental rate agreements was announced to be on Saturday, February 02, 2019. Contracts that are not renewed by that date will be transferred to other tenants.
Administering a total of 17,000 residential and business units, the Corporation has started constructing 3,200 housing units for the first time in its history with a total cost of one billion Birr. The construction is part of a 16,000-unit housing development planned in the coming three years.
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