The Rent Law Protects No One Well. Time to Rewrite It.

Jun 27 , 2026.

The federal legislative house rushed through one of the country's most contentious housing laws two years ago. Today, the result satisfies almost no one. Tenants still feel insecure, property owners feel constrained, and the law struggles to deliver the protection it was meant to provide.

The law governing rent control and administration was contentious from the start. The way it was drafted and the speed with which it passed drew criticism. It was approved in haste, with limited deliberation, and media outlets were barred from the legislative session in which it was debated and adopted. A market long governed by informal understandings between property owners and tenants was pulled, almost overnight, into a formal legal frame.

The purpose was straightforward as the law sought to regulate rent increases for residential housing nationwide. Rent adjustments would be set by regulatory bodies established in Addis Abeba, Dire Dawa, and the regional states, which would weigh prevailing social and economic conditions, the cost of living, and other relevant factors before approving annual increases. It guaranteed tenants a minimum two-year tenancy and permitted eviction only under legally specified circumstances.

On paper, the law promised relief for hundreds of thousands of tenants. In a city such as Addis Abeba, where a large share of residents rent, state controls looked like a way to cool what was supposedly an overheated market and shield tenants from relentless rent increases. Others warned that the law went too far, restraining property rights and limiting what owners could do with their own assets.

Both readings have since found evidence to cite.

City administrations issued their own implementing directives, with Addis Abeba among the first to enforce the framework. In June 2024, city officials told lessors and tenants to register rental properties and sign legally recognised agreements approved by wereda administrations. The drive registered close to half a million rental units. Yet two years on, the system appears to be struggling under a formal arrangement that many believe is failing both parties. A law meant to stabilise rents and protect residents has instead created loopholes, encouraged unofficial arrangements, and raised doubts about whether it is meeting its objectives.

The pressure is showing again as another cycle of lease renewals arrives. For many lessors, rents have barely moved for nearly two years, even as the cost of living has climbed, and they are eager to adjust rentals to reflect the market. Tenants, already stretched by current rates, dread another wave of increases. City officials, such as Kidist Weldegiorgis, head of Bureau for the Addis Abeba Housing Development & Administration, keep warning that no adjustment is lawful without regulatory approval.

Nonetheless, the arrival of June has again brought uncertainty to thousands of households, with notices to vacate growing more common and anxiety over rent rises spreading.

Weak enforcement has deepened the problem. Although the law was meant to protect tenants from arbitrary eviction, many property owners have reportedly found other ways to reclaim their properties. Claims that an owner intends to move in or renovate have become standard explanations for ending a tenancy. As a result, many tenants find themselves insecure with the law set out to eliminate has not gone away.

The evidence is not only anecdotal. A 2024 study by EthioData identified high and volatile rents, frequent increases and widespread tenant insecurity as a defining problem in the private rental market. Many agreements remain verbal, which makes it easier for property owners to impose sudden increases or evict occupants without a formal procedure. National studies indicate that many households spend more than 30pc of their income on rent, while a substantial minority spend more than half their earnings on housing.

Recurrent spending on rent has become a defining feature of the capital's housing market. Data from the Ethiopian Property Centre in early 2026 put the average monthly rent for studio apartments in the city centre at 45,000 Br, with rates ranging from 35,000 Br to 65,000 Br by location. Neighbourhoods such as Bole, Casanchis and Old Airport command premium rents, close to commercial centres and in demand among expatriates.

The rental surge is tied to a housing deficit estimated at more than one million units. Rapid population growth and rising household formation continue to widen the gap between demand and supply, according to studies by the Ethiopian Statistical Service and the United Nations. Although almost two decades, the most comprehensive count remains the 2007 Population & Housing Census, which recorded more than two million renters in Addis Abeba, over 1.2 million of whom were in privately rented housing.

However, later reviews unveiled that the trend has only intensified. An assessment conducted a decade later found rental housing accounted for 54pc of urban residences nationwide and more than 61pc in Addis Abeba. By 2025, projections indicated at least 60pc of households in the capital were in rental arrangements, as tenants or property owners.

If tenants struggle with affordability, many lessors counter that two years of largely frozen rents have become impossible to sustain. Food, transport, utilities, and taxes have all gone up sharply, while rental income for law-abiding owners has remained stagnant. In practice, the law overlooks illegal conduct on both sides while failing to protect either. Owners unable to earn enough from their assets are pushed toward non-compliance, and tenants determined to stay in their communities drift into unofficial deals of their own.

The damage runs deeper than money. Perhaps unintentionally, the law appears to have produced new forms of inequity. It has also frayed the relationships that once defined the rental market. The customs whereby lessors lived near their tenants and hesitated to evict them out of social obligation and personal ties seem to have gone. Today, disputes increasingly run through government offices and third parties, turning a neighbourly arrangement into an adversarial one.

Kidist and her officials reject these complaints, insisting the law is being enforced as intended. They argue that the law is built to protect tenants, stabilise rents and create predictability for both parties. The broader question, however, remains unresolved, and it extends well beyond the price of a lease. At its core lies the state's role in the housing market.

Should government bureaucrats step back and let property owners and tenants negotiate under market conditions, or step in more forcefully with stronger oversight and firmer enforcement of the rules already on the books?

What is increasingly clear is that the law has fallen short of the goals it was used to justify. Enacted to protect tenants from arbitrary eviction and runaway rents, its enforcement has exposed weaknesses neither side foresaw. Property owners complain that prolonged limits on adjustments have eroded the value of properties' income as living costs soar. Tenants react that unofficial increases and indirect evictions continue despite the legal shield.

Two years on, the argument is no longer about whether state intervention was warranted in a city wrestling with rising rents and a severe housing shortage. It has shifted to whether the present framework can balance two competing claims between protecting tenants from insecurity while preserving property owners' right to benefit from and control their property.

The state should choose. It can commit fully to making the law work, through effective regulation, credible enforcement and a fair balance between competing interests, or it can reconsider the reach of its intervention altogether. What it cannot afford is the current middle ground, where tenants still feel insecure, property owners feel boxed in, and a law meant to bring order struggles to deliver on its promises.

PUBLISHED ON Jun 27,2026 [ VOL 27 , NO 1365]