Soaring Rent Crisis Pushes Residents to the Brink

Feb 23 , 2025
By Eden Sahle

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Addis Abeba is in the grip of a worsening housing crisis. Rent prices have surged to record levels, forcing many residents into financial distress. Even those who manage to secure housing agreements are finding themselves vulnerable to sudden and unlawful rent hikes.

A relative's experience with a real estate company depicts the growing problem. She agreed to rent an apartment for 60,000 Br per month, paying three months' advance while waiting for the previous tenant to vacate. However, on the day she and her family were set to move in, the landlady abruptly raised the rent to 85,000 Br, before they had even spent a single night there.

The landlady justified the increase by claiming that property administrators pressured her, arguing she was charging below-market rates compared to other landlords in the area.

This is far from an isolated case. Across Addis Abeba, landlords are disregarding rental agreements, arbitrarily raising prices, sometimes multiple times a year, and leaving tenants with little recourse. Many renters feel powerless to challenge these increases, fearing eviction or retaliation.

Ethiopian law mandates a two-year fixed rental agreement, but weak enforcement and a lack of tenant protections allow property owners to exploit loopholes and impose unsustainable price hikes.

A survey of rental prices across the capital confirms the alarming trend. Four-bedroom apartments in Bole Bulbula are now listed at 100,000 Br per month, while three-bedroom units in Bole, Megenagna, and CMC go for 85,000 Br. Basic villas now cost at least 150,000 Br per month, with even dilapidated old villas in Ayat renting for no less than 60,000 Br.

Government-subsidized four-bedroom condominiums near prime locations, originally built to provide affordable housing, are now being rented for 35,000 to 40,000 Br per month.

These rent prices are completely disconnected from the income levels of most Addis Abeba residents. According to estimates from international organisations such as the World Bank, Ethiopia’s average middle-income salary ranges from 100,000 to 180,000 Br per year, roughly 8,000 to 15,000 Br per month. That means an entire year's income would not cover even two months' rent in many areas of the city. Even upper-middle-class professionals earning 25,000 to 30,000 Br per month struggle to afford housing.

Not all landlords are driven by greed. Some are considerate, offering fair prices and even reducing rent when tenants face financial hardships, such as job loss or single-income households. These property owners exemplify social responsibility at its best.

Industry experts point to several factors driving the crisis. Rapid urbanisation and population growth have outpaced the construction of new housing. Government housing projects, such as the condominium programme, have failed to meet demand, forcing more people into an increasingly competitive rental market. The cost of building materials has also surged, leading landlords to raise rents to recover their expenses.

The much-anticipated two-year rent control policy exists in theory but is poorly enforced. With a slow and inefficient legal system, tenants are often discouraged from pursuing legal action against landlords who violate agreements.

Many property owners and managers set rental prices based on demand from expatriates and high-earning businesspeople rather than local affordability. Some landlords are also accused of colluding with brokers to artificially inflate prices.

The unchecked rise in rent is pushing residents to the brink. Families are forced to relocate frequently, disrupting children’s education and increasing transportation costs. Others are downsizing into overcrowded and substandard housing while still paying inflated prices. Some have taken drastic measures, moving back in with parents, sharing housing with relatives, or leaving the city entirely in search of affordable living conditions.

With affordable housing increasingly out of reach, many low-income workers are struggling to secure shelter. If these trends continue, Addis Abeba could face a rise in family homelessness.

Achieving stable and fair rent prices in the capital may seem like a distant dream, but the government, property owners, and the public must work together to address this growing crisis.

A dedicated rent control authority could be a crucial step, ensuring rental agreements are enforced and penalising landlords who violate the two-year contract rule. Quick and accessible legal mechanisms should be in place to allow tenants to challenge unfair rent increases without fear of eviction or retaliation.

The government should promote low-cost housing projects and introduce incentives for private developers to build affordable rental units. Large state-owned land reserves could be allocated for mass housing developments to help narrow the gap.

Real estate agents and brokers should be subject to licensing and strict regulations to prevent price manipulation. A public rental registry could provide transparency on fair market rates. Establishing a tenant rights commission to educate renters about their legal protections and mediate disputes could also ease the burden on courts. Stricter fines for landlords who break rental agreements would help reduce pressure on tenants.

Banks should be allowed to provide low-interest home loans to middle- and low-income workers, expanding homeownership opportunities. The government should also increase low-rent housing options for those earning below a certain threshold, helping struggling families secure stable homes.

While legal and policy interventions are essential, property owners must also recognise their social responsibility. Inflation and economic crises affect landlords as well, but disregarding contracts and imposing unaffordable rent hikes is both unethical and unsustainable.

At a time when life is becoming increasingly expensive for everyone, compassion and fairness must take priority over greed. Housing is not a luxury, it is a basic human right. Communities deserve security and stability in their homes, not the constant fear of eviction and financial ruin.

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PUBLISHED ON Feb 23, 2025 [ VOL 25 , NO 1295]

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