The Federal Housing Corporation’s first increase in commercial rental fees in 43 years in Addis Abeba has caused significant tumult among the business class across the city.

In a letter addressed and sent to each tenant on December 18, 2018, the Corporation announced hikes in commercial unit rental fees by an average rate of between 521pc in Lancha to 6,784pc in neighborhood around Stadium. City wide, the commercial rental fees increased by an astounding average rate of 2,090pc.

With a contract renewal deadline set for December 24, the revision will come into effect in the first week of January 2019.

The revised rental fees are based on a thorough survey conducted on rental tenures of private properties in the city, according to the Corporation.

“The result of the survey demonstrated that rental prices of the Corporation are not up to current market prices by any standard,” said Kibrom Gebremedhin, director of communication affairs at the Corporation. “Considering the current market price of rent in the city, it could be said that our tenants were using the commercial units for free.”

The tenants though are complaining that the revision is unfair and shocking.

A 55-year-old owner of a small bar and tenant for a decade at Sierra Leone Street around Lancha, who preferred to stay anonymous, said that he feels as if he is in a nightmare since receiving the letter from the Corporation last Tuesday.

His monthly fee, for a property that has a medium-sized main room and four small service rooms in the back, which he won at an auction following the previous tenant’s contract termination, was 15,066 Br. The revision raises his rental fee by over three-fold to 50,776 Br.

“How can I continue with this business paying salaries for 17 employees in addition to supporting six family members,” he asked. “I could not cope with this cost unless I increase the prices of my services, which may lead to losing my regular customers.”

The revision has sent shockwaves to tenants in Piassa, Merkato, Bole and Mesqel Square.