Fortune News | Jul 30,2022
The Bole Bulbula area depicted a typical rural scene not so long ago. It was flush with open swathes of farmland dotted with a few modest homes sparsely inhabited. The rustic setting has changed dramatically over the past years. The small houses of corrugated steel and mud gave way to urban sprawl. So are the vast arable land jammed by condos and villas of the steel and concrete era.
A large condominium site dominates the view, comprising dozens of seven-storey buildings towering over their surroundings. The buildings, painted yellow with a hint of orange around window frames, number at least 30. The loud thumping of jackhammers and the sight of daily labourers donning orange vests leave no doubt that the site is still under construction. Security personnel were stationed every few blocks, watching over materials like reinforcement bars (rebar) and electrical wiring from would-be thieves.
Some of the blocks have been fitted with aluminium door and window frames. Others project nakedness, resembling concrete shells. Ironically, they inject a feeling overriding their bareness, outlining someone’s future home. Despite the noise and the eerieness evoked, the satellite dishes installed on some of the rooftops or hanging from walls signal that residents have begun moving into the neighbourhood.
Welcome to Lemi Kura, Addis Abeba’s newest district, formed of weredas from Bole and Yeka, embracing new neighbourhoods such as Bole Beshale, Bole Arabsa and Bole Bulbula.
Tsega Abay lives in a one-room unit on the ground floor of one of the condominium blocks in Bole Bulbula. The contractor building the block permitted her to move in with her daughter three years ago. She left her previous home, also located in Bole Bulbula, as she could not keep up with rent.
Tsega is grateful for the rent-free lodging. But living conditions in a single room shared with a five-year-old are far from ideal. The mother and daughter have no access to electricity, and their home is prone to water leakage, which only worsens during the rainy season.
Many of these blocks at the Bole Bulbula site, including the one sheltering Tsega and her daughter, were part of the 25,000 public housing units scheduled for transfer to owners through a raffle three weeks ago. Other sites included in the raffle were condominium units in the eastern peripheries of Addis Abeba of Bole Beshale, and the Megenagna area. They cost the city government 21 billion Br, financed through loans from the state-owned Commercial Bank of Ethiopia (CBE).
In a city with housing demand exceeding one million, hundreds of thousands registered to get their luck with a low-cost housing program the city government has been undertaking for over a decade. Many have, and hundreds of thousands still wait, saving their share with the CBE.
The city government offers three options to would-be homeowners depending on their ability to raise funds. However, severely constrained supply forced the authorities to administer raffles to transfer these properties. The outcome of the raffles is often controversial.
When news of the raffle began to surface in the media two weeks ago, Tsega was distressed.
“I prayed for a miracle,” she told Fortune, a sense of ease visible on her face. “I had nowhere else to go if I left this house.”
Her prayers might have been heard. Three days after the drawing was held at the Addis Abeba City Hall, the administration of Mayor Adanech Abiebie vetoed the results in the face of widespread allegations that the raffles were not fair game. The Mayor put the transfers on hold – indefinitely.
These 15-storey towers are located in Bole Arabsa, on the eastern outskirts of Addis Abeba. Some of the buildings have aluminium window frames installed, others stand bare.
Unlike Tsega, Alemu Kassa was devastated by the news.
Like so many of the capital’s residents, Alemu registered to own a condominium unit. He has been saving 561 Br a month with CBE since 2005, registered for a two-bedroom condo flat. With growing savings that reached 95,000 Br this year, his hopes of leaving life in a rental house behind were rising.
Alemu’s family of three lives in a one-bedroom apartment in the Bethel area of Kolfe Qeraniyo District. A monthly 5,600 Br in rent takes a third of his salary working as a driver for a non-governmental organisation (NGO). Despite high hopes in the early days and no shortage of promises from successive city administrations to address the capital’s relentless housing crisis, Alemu’s dreams of owning a flat have yet to come true.
Mayor Adanech’s decision to scrap the lottery results was dashing to Alemu’s hopes.
“I don’t think I’ll ever be lucky to own a place,” he said.
His misgivings are anything but unfounded.
Alemu is among the hundreds of thousands of home seekers who have saved but feel trapped. Unable to receive the flats they have saved for nearly two decades, they are in a dilemma seeing their savings eaten up by runaway inflation. They remain to hope against hope that the City Administration eventually could deliver the condos.
Divided up into middle, lower-middle, and low-income tiers, the public housing schemes had seemed viable when it was launched 17 years ago. Their execution over the years has been anything but.
To date, close to 290,000 units have been handed over to residents under the lower-middle-income scheme, for which they saved 20pc of the cost of the housing. There have been 136 condominium projects the city administration undertakes; 13 have yet to be completed. Hopeful residents like Alemu have been waiting ever since, remaining in frustration. Not enough condos were built to meet the housing demands of residents registered in the first round in 2004.
The menu for excuses is long. From a shortage of construction inputs and vague administrative demarcations to iffy contractors’ capacity, lack of finance and scarcity of forex, what ails the city’s ambitious project is several.
Less than a quarter of the planned units for residents saving 40pc of housing costs in the middle-income scheme have been transferred so far. It started a decade after the low-income housing scheme launched, with the administration planning to build 75,000 units by 2020.
Short in supply and high in ambitions, the city administration included nearly 80,000 residents, including Alemu, as eligible to participate in the latest lottery draw. City officials say that tens of thousands deemed “ineligible” were included in the raffle. They discovered that several of the condos up for draws remain fully unfinished to match the number of residents included in the raffles.
Condominium units are transferred based on procedures outlined in a directive the Addis Abeba Housing Development & Administration Bureau introduced last year.
Under Yasmin Wohabrebbi, a former state minister for Finance, the Bureau is responsible for organising and verifying information about residents registered to own flats and have been saving. It ensures they have saved their share before forwarding the list to the Addis Abeba Housing Development Corporation.
The Corporation is tasked with readying the condos for transfer. Those who saved more than 40pc are eligible to participate in the raffle under the middle-income housing scheme, while others like Alemu who have been on the waiting list since 2005 are eligible to enter the draw for a low-income housing scheme. A technical team under the Corporation uploads personal information into the raffle software 24 hours before the draw takes place. The team verifies the software’s validity - a process that entails the system is tested three times before the team’s members.
Mayor Adanech appointed Muluken Habtu (PhD) head of the Addis Abeba Innovation & Technology Bureau last September. Under his leadership, experts began developing the software nine months ago.
Despite the guidelines, the raffle was a bust.
A task force from the Information Network Security Agency (INSA) and the National Intelligence Centre found that close to 100,000 people had entered the draw, accessing the digital lottery system. Experts and officials involved in the software’s development, administration, and supervision were arrested. Muluken was among those detained and under investigation after the city council revoked his immunity.
The saga has also been a blow to tens of thousands of hopefuls registered for housing through a recently introduced model. Last year, city officials offered those able to build houses independently, forming cooperatives. Over 14,000 people signed up online. The Housing Bureau told them to report to their respective wereda offices, where they would form the cooperatives. The Bureau’s experts then identified 4,000 individuals eligible to build houses under the model in Nifas Silk-Lafto and Akaki-Qality districts.
A fifth of the eligible was scheduled for final selection under another lottery draw planned for last week, 10 days after the debacle with the raffles for condos.
It did not happen. The lottery has been put on hold indefinitely as law enforcement agencies launched a probe.
“The raffle was to be conducted using the software from the previous draw,” said Habtamu Mulu, director of cooperative housing at the Bureau.
Martha Belete, 34, a mother of two, is one of those registered under the new housing model. She can afford to pay the 900,000 Br initial payments and had saved close to 55,000 Br under the housing scheme.
“I registered for the [new] scheme thinking I stood a better chance,” she told Fortune.
The City Administration may shift the blame to the software developers and scapegoat a few officials. But the problems with the troubled low-cost housing scheme are hardly new.
Three years ago, 100 residents in a raffle for transferring units under the middle-income scheme filed a lawsuit against the Bureau and the Corporation. They accused the city administration of including those who saved 40pc while they had paid the full amount. A few months later, 1,000 plaintiffs filed six lawsuits at the Federal High Court. Last year, judges at the Federal High Court ruled in favour of the plaintiffs, represented by Andualem Buketo.
Despite judges ruling for the plaintiffs to be granted priority in the latest riffle, officials chose to ignore the ruling, according to Andualem.
These troubles could not have come anytime than now. Mayor Adanech faces serious backlash for recurrent delays in the delivery of condominium units.
Experts suggest that the administration’s failures from planning and execution to the transfer of the housing units signal the need to introduce alternative housing schemes. One of these experts is Abinet Belay, an investment consultant with MPE, a private consulting firm. He observes the condo units built under the low-cost housing scheme are expensive even for middle-income families.
He suggests the introduction of low-cost housing built for rent and not ownership could help ease the crisis.
The controversies surrounding the condominium transfer procedure are not limited to prospective homeowners.
Last November, the Corporation floated close to 2,600 commercial spaces on the ground floors of condominium blocks constructed under the low-income scheme. Shops were available at sites across the city, including in Bole and Arada districts. However, Yasmin cancelled the auction off two months later over suspicion of illicit activities in the process.
The Corporation’s second attempt to sell the commercial spaces was in vain, as complaints were lodged with the Addis Abeba Police Commission by bidders. Police arrested five of the seven committee members to oversee the bidding process. They were released after three weeks.
The shops remain under the Corporation.
PUBLISHED ON Jul 23,2022 [ VOL 23 , NO 1160]
Fortune News | Jul 30,2022
Fortune News | Apr 16,2022
Editorial | Mar 13,2021
Fortune News | Sep 06,2020
Radar | Sep 11,2020
Fortune News | Nov 02,2019
Commentaries | Jun 20,2020
Fortune News | Mar 27,2021
Fortune News | Apr 12,2020
Fortune News | Oct 30,2021
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