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Ethiopia: Registration Kicks for Housing Associations Under the New Scheme

July 31, 2013


The Addis Abeba Housing Bureau wants to divert capable registrants from the 20/80 scheme, for which over 800,000 home seekers registered a month ago, to the scheme designed for associations.

The Addis Abeba City Administration last week started registering existing housing associations that will be given plots to build their own homes under the new scheme. Registration for the newly formed associations will commence on August 02, 2013.

The Administration, which issued a directive to govern the registration procedure a month ago, expects to register 5,000 associations, up until August 6, 2013. Existing associations, composed of 16 members and newly formed associations, which will have 24 members each, are required to save 50pc of the construction costs at the Commercial Bank of Ethiopia (CBE).

Based on the previous directive, associations should contain 24 members. The figure was 58 before 1997.

Previously, associations had to save 9,800 Br at the CBE to get land. This, however, has changed to saving half of the construction costs for one, two and three bedroom apartments. This amounts to 210,000 Br, 280,000 Br and 385,000 Br, respectively, according to the new directive.

They will then deliver the balance after acquiring the land and before construction begins.

These prices, which do not include the finishing costs, have been estimated based on the design developed by the Addis Abeba City Housing Construction & Development Bureau. The Bureau will provide five alternative designs, two for the two-storey buildings and three for the four-storey houses.

The associations can use their own house design in the construction of the building.

“Associations can change the designs as they wish, but the price will increase,” said Shesema Gebresellassie, head of the Addis Abeba Trade & Industry Bureau, while briefing journalists about the new directive, with Getachew Hailemariam, head of the Addis Abeba Housing Bureau, on Friday, July 26, 2013.

Only two associations were registered, as of Friday, July 26, 2013, out of the 300 existed associations established in Addis Abeba. Although established before 2005, these associations have not received land from the Administration since it stopped giving land in 2005.

The city administration stopped giving land for associations after 2005, in order to stop the large levels of corruption involved in the process.

The new directive also burdens associations to pay equal compensation to what government pays, in order to clear the plot that is to be given for the associations, unlike before.

The directive also allows the Diaspora community to form associations and register for the new housing scheme through embassies and the Ministry of Foreign Affairs (MoFA).

“Residents registered for the 20/80 scheme can also register for the scheme if they form associations,” according to Getachew. “But they will be cancelled from the 20/80 scheme.”

In a bid to manage capable home seekers into associations, the administration also planned to organise those who can pay 100pc of the construction cost upfront.

This is in order to serve as many residents as possible under the new housing schemes introduced by the Administration, according to Getachew.

Close to 800,000 have registered for the 20/80 scheme, in addition to the 350,000 home-seekers who already registered in 2005. There are 23,000 people registered in the 10/90 scheme. Both took place from June 10 to 28, 2013.

There are 175,000 houses under construction currently, with a total of 16 billion Br, according to Getachew. Out of the total, 95,000 housing units are under the 20/80 scheme, while 24,000 houses are being constructed for those registered for the 10/90 scheme.

“The Administration will stop constructing houses under the 10/90 scheme, since the number registrants and houses under construction do not match,” said Getachew.

The construction of houses for associations will also be extended to regional towns, which the Ministry of Urban Development & Construction will start soon, according to Getachew.

“Since Bahir Dar, Mekele and Awassa city administrations are asking to launch the scheme, towns with more than 500,000 residents will be allowed to introduce the scheme too,” he added.

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