A Rental Law Meant to Protect Tenants Fuels Tension

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It was an ordinary day for Ademu Yehulashet when her landlord told her to vacate the two-bedroom condominium she was renting. He claimed he planned to move in himself.

Ademu, a mother of a son, doubted that it was true. She asked if he wanted higher rent and offered to pay more if she could stay. Her plea did not work.

She had lived in the condominium in Abado 13, on the northeastern outskirts of the city, bordering the town of Lege Tafo, for more than a year, sharing it with her son and younger brother, under an informal contract. After the city introduced a new housing and rent law a year and a half ago, officials urged property owners and tenants in June 2024 to register units and sign a legally binding lease approved by wereda authorities.

Ademu and her landlord, who are part of the half-a-million lease agreement signed across the city last year, did so.

The officially approved contract listed the rent at 10,000 Br a month. In reality, she signed it knowing she had agreed to pay an additional 4,000 Br. On paper, the new system tightened enforcement. In practice, the absence of clearly specified rent prices  created space for side payments.

Despite the risk of non-compliance, Ademu felt she had little choice. She wanted to remain in the neighbourhood where she had close friends and a support network and agreed to pay the extra outside the written terms.

Nonetheless, even that did not secure her tenure. With a year left on her contract, she was told to go and given two months to find another place.

“The eviction notice came out of nowhere,” she told Fortune.

She was convinced that the notice violated her contract, which stated a minimum two-year period and allowed eviction only on legally justified grounds. Although she had lived in the property for more than two years, the revised contract had been signed only a year earlier.

Ademu argued she had not breached her obligations as a tenant.

When she threatened to take the case to court, her landlord reminded her that she had also participated in the off-book payments.

“He told me there was nothing I could do,” she recalled.

This is what a study carried out in 2024 found it as “problematic,” characterising the private rental market, citing high and volatile rents, frequent increases, and a pervasive sense of insecurity. Many private leases are oral only, enabling sudden rent hikes and evictions.

National studies also find that many households spend more than 30pc of their income on rent, with a substantial minority paying more than half.

Ademu eventually secured another rental and moved out, “leaving behind a prepaid electricity bill for the next unfortunate tenant who would occupy the condominium.”

She later learned that new tenants moved, paying roughly double what she had paid.

The city’s rental and housing system, once grounded in informal trust between tenants and landlords, is straining under a formal regime that many say is failing both sides. A law meant to stabilise rents and protect residents in Addis Abeba has instead opened loopholes, pushed deals off the books and called its relevance into question.

If tenants like Ademu feel exposed, some landlords say they are trapped on the other side of the same system. Rising living costs and fixed rents have left them unable to live on the income from their property, while they are barred from formal rent increases.

Birtukan Kebede, 47, owns a condominium in the Bole Arabsa area, in the southern outskirts of the city. She rents a smaller house for herself near the Abado site while leasing out her studio.

Her tenants have been paying 5,000 Br a month, the same rate they paid before the city directive came into effect. The lease prevents her from raising the rent, even as the cost of living continues to climb.

“I can’t raise the rent beyond what’s stated in the signed contract, yet the tenants continue to pay the same rent as years ago, claiming it is their right,” she said. “Similar properties rent for double.”

Birtukan pays 750 Br in taxes every three months, on top of the 2,000 Br she spends each month on her own rent. She anxiously awaits June, the month the lease ends.

“For now, it’s difficult to keep up with basic expenses like food and transportation with only the 3,000 Br left,” Birtukan told Fortune.

She has not tried to alter the arrangement, recognising that the contract was designed to restrict and regulate rent and that landlords are not allowed to increase prices outside the law’s conditions. She has also been told she has no grounds to evict, as she cannot claim her tenants breached the terms. She feels unable to benefit fully from her own property.

According to Nebiyu Mikru, a constitutional law expert, the law overlooks illegality on both sides and disregards tenants’ and landlords’ rights alike. Landlords, unable to use their property to support themselves, may feel driven to non-compliance, while tenants, unwilling to leave communities where they have built ties, may be drawn into off-book deals.

Although the Constitution guarantees equal rights and justice, he contended that existence of the law has “produced injustices.”

“The proclamation claims to uphold fair treatment and the rights of citizens seeking housing, but its failure to distinguish between parties and ensure equitable outcomes is alarming,” he told Fortune.

Nebiyu blamed the law for “disturbing community cohesion.” In the past, he recalled, landlords lived near their tenants and would go to lengths to avoid evicting them out of shame or guilt. With disputes now channelled through third parties, the process, he observed, has grown more adversarial, driving landlords and tenants further apart.

He noted that lease agreements might appear to uphold the rule of law, but the lack of enforcement has set it back. He pointed to the rule that holds rents fixed for a year, regardless of inflation, arguing there is no governance or legal framework to justify it.

“This undermines individuals’ constitutional rights to engage in the free market and to exercise control over what is rightfully their property,” he said.

Nebiyu argued that the state could have pursued alternative measures within its legal authority without overstepping constitutional limits.

“While the imposition outside of the constitution itself is harsh, it also disrupts the social and community foundations that had functioned effectively long before such measures were introduced,” he said. “Beyond its constitutional invalidity, the proclamation also suffers from poor enforcement, failing to uphold even the rules it lays out.”

Officials at the Housing & Development Bureau insisted the law is being enforced. They describe a policy built to protect tenants, stabilise rents and provide a predictable structure for both sides.

They present the housing and rental law as a step toward addressing Addis Abeba’s housing pressures and establishing a fair framework. Directives and regulatory practice allow authorities to verify compliance, yet enforcement is uneven, leaving room for breaches from under-the-table rent manipulation to unlawful evictions.

According to Abdisa Ararso, head of the Bureau, the law assigned regulators the responsibility to supervise properties before they were put up for rent, but still anticipated the disputes that might arise during the lease period.

Some landlords, under strain from the same rules, operate in grey areas to survive.

Etetu Haile, 45, a hotel cook, supports her family through her job, renting out a one-bedroom condominium in the Gerji neighbourhood. She has been renting for more than a decade. But the recent housing and rent control rules make it hard to operate strictly “by the book.”

She saw how property owners across the city feel pushed into arrangements where the rent written in the lease and the rent paid in practice don’t match.”

“Nobody tells the truth,” she said.

After a tenant she considered like family moved out four months into the lease, Etetu had to find new tenant to make ends meet and support her relatives. The first tenant had paid 18,000 Br a month for years, both before and after the new regulations. The current tenant pays 25,000 Br. For the first year, however, the tenant continued to pay 18,000 Br a month in compliance with the law, based on a pre-arranged understanding that the rent would rise after the one year of protection expired.

Because the first tenant was “like family,” he had kept paying the same rent for years even before the law entitled him to do so. The current tenant, whose two-year contract is set to expire in July, is expected to face an increase in rent.

“Raising the rent is necessary, and I intend to,” she said. “I need to make ends meet, balancing my own household and other expenses, while also supporting my large family.”

She also faces additional charges, including 38,000 Br in annual income tax over the past ten months and 3,500 Br in property tax. Under an income tax amendment law that requires payment every three months, she made her most recent tax filing about a month ago, covering the prior quarter.

While Etetu recognised that operating outside the formal contract is not right, she argues that the restrictions make it difficult for property owners to keep up with living costs. Clauses that allow leases to be suspended for specified reasons and the restrictions on raising rent during the lease period leave property owners locked into fixed income for an entire year.

Latest data is hard to come by to determine the number of people like Etete who have rented their properties in Addis Abeba, a city of renters. However, the housing market continues to be defined by its tenants rather than homeowners.

The most comprehensive baseline remains the 2007 national census on population and housing, which, using the then-average household size of 5.3 persons, identified over two million renters in Addis Abeba. Of these, private rental housing accounted for more than 1.2 million residents.

Subsequent studies, including policy assessments and urban surveys, show this trend has only intensified.

A 2016 evaluation found that rental housing comprised 54pc of all urban residences across the country, with Addis Abeba surpassing 61pc. By 2025, projections show that at least 60pc of the city's households were involved in renting, either as landlords or tenants, most of them through private arrangements.

The public rental stock, mainly administered through kebele housing, has steadily declined due to structural decay and redevelopment efforts. In contrast, private rentals continue to expand, particularly in emerging condominium zones and informal settlements where traditional tenancy agreements are standard.

Rental inflation has become a defining characteristic of the housing market. Data from the Ethiopian Property Centre in early 2026 show the average monthly rent for a studio apartment in the city's core at 45,000 Br, with extremes ranging from 35,000 Br to 65,000 Br depending on location. Neighbourhoods like Bole, Casanchis, and Old Airport fetch premium rates, driven by proximity to commercial centres and expat demand.

The surge in rental value is also a consequence of an acute housing deficit, estimated at over a million units, compounded by robust population and household growth. Urbanisation studies by the Ethiopian Statistical Service and the UN echo this trajectory, uncovering the widening gap between demand and available stock.

As renting becomes entrenched, city authorities are eyeing landlords for revenue. The “roof and walls” property tax, revised as part of a broader fiscal reform, has become a major tool for boosting city coffers.

In the last fiscal year, the tax netted over six billion Birr, a staggering 20-fold increase from the prior period. The levy is calculated based on each property's estimated rental value, with rates ranging from 1.5pc to 4.5pc annually.

Despite this leap, property tax revenue constituted only seven percent of the city's income before the revision, signalling a wider push to mobilise untapped real estate value.

With total revenue ambitions set at 125.5 billion Br, city officials are betting on a formalised and taxed rental sector. Yet, the effectiveness of this effort will depend on the city’s capacity to appraise properties accurately, enforce collection, and bring informal landlords into the tax fold.

Nebiyu, who has pursued a constitutional petition challenging the proclamation itslef, argues that the housing and rent law deprives individuals of the full benefit of their property by limiting their ability to set prices and control access. As the cost of living has surged in recent years, the law, enforced through directives issued after 2024, has left many property owners struggling to keep pace with costs while legally mandated rents remain stagnant.

Not everyone, however, sees widespread abuse. According to Asfaw Yitna, an intermediary in his mid-50s who lives near Koye Feche Condominium, house rent issues are visible in his area, but he has not seen covert deals or unlawful evictions since the law took effect.

After the rules were introduced and “a few exemplary actions” were taken against tenants and landlords, people in his area took note.

“Everyone has taken note and doesn’t dare break the agreement,” he said.

According to Abdisa, it is his Bureau’s responsibility to register and manage leases in “a regulated and fair manner,” preventing undue hikes and arbitrary evictions.

The authorities argue that the law has improved social relations and daily life for many tenants, making tenures more secure and predictable.

“Now tenants can be certain about which school to register their children in, without the constant worry of eviction, relocating to a different school, or facing unaffordable fees and rent,” Abdisa told Fortune. “A solution was needed to control rent increases and ensure rental agreements lasted for a defined period, creating a healthy and balanced framework.”

Yet disputes continue, including evictions, contested rent increases, delayed or non-payment of rent, and property damage.

Abdisa disclosed that tenants or landlords who have concerns about how the rules are being applied can bring cases to the Complaints Hearing Body at the wereda level. If issues extend beyond the district, the Housing Development Bureau takes over handling the matter.

“It’s important to recognise that unfairness can occur on both sides, and it is often impossible to point fingers at a single party,” he said. “It’s customary to agree to resolve contracts amicably and dissolve them when necessary.”

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