7 January 2013

Ethiopia: Preparations for Low Income Housing Almost Over

Mekuria Haile,left, Minister of Urban Development and Construction, discussing policy matters along with Amare Asegedom ,centre, head of housing development & Government building construction bureau and Tadesse G. Giorgis, right, deputy bureau head at the Housing Development at a consultation meeting for the draft housing policy at Hilton Hotel

The Addis Abeba Housing Development Agency is finalising preparations to begin registration of residents for the 10-90 housing project.

The project is aimed at low income groups, earning a monthly income below 1,000Br.

Along with the 10-90 housing scheme, weredas will also be re-registering previous applicants for the 40-60 condominium housing scheme, and new condominium registrants as well.

Last week, training was provided to data encoders, who are to be assigned to all 116 weredas, in Addis Abeba, to assist in the registration. Each wereda will get 12 data encoders who will be using Wereda Net, a network used by city administration officials, to conduct registration.

Three types of registration forms have been printed, and will be distributed to weredas this week. The City has also upgraded its network system to handle 2GB of data, up from the previous capacity of 512MB.

Although an official at the Ministry of Urban Development and Construction (MoUDC) had stated that registration would start within the coming two months, officials at the Housing Administration & Development Agency declined to confirm this.

"Once preparations are finished, the Agency will only wait for the decision of the Mayor's office before starting registration," Mesfin Mengistu, general manager of Housing Administration & Development Agency said.

The 10-90 housing scheme was first unveiled by MoUDC in July, 2012. It was introduced along with a housing scheme for middle incomers, known as 40-60. Named after the ratio of savings-to-loans a person will need to cover the cost of a house. These housing projects were provided as solutions to address the housing shortage within the City.

In the 10-90 scheme, for instance, the government plans to build 35,000 houses. Low incomers that register for the scheme will have to come up with 10pc of the cost of the house, whilst 90pc will be provided as a loan. The total cost of the house is set at 76,615 Br, for a one room apartment, with 29sqm of space.

For middle-incomers, the government stated that it would build around 10,000 houses. Those interested in the scheme are to save 40pc of the cost of the house within five years and get loans for the balance, from Commercial Bank of Ethiopia (CBE), to be paid over a 17-year period. Construction of the houses will be handled by a newly established enterprise.

The announcement of the schemes had garnered a lot of interest from residents in Addis Abeba. In October, when news got around that registration for the 40-60 scheme was about to start, a lot of people had lined up at weredas to register, indicating that there is a lot more demand for the housing scheme than originally thought.

Officials at MoUDC took this to mean that people have only focused on the middle income housing scheme option and were not as aware of the 10-90 option.

"We had planned for civil servants and others who have trouble finding affordable housing to be accommodated in the 10-90 scheme," Mekuria Haile, minister of MoUDC, stated at a meeting to discuss a draft government housing policy, in November 2012.

The road that it took was to prepare directives for both solutions and create better awareness before starting registration. However, progress with the 10-90 scheme seems to have moved faster, with discussions over whether to register those applying for the 40-60 housing scheme at banks, or through the city administration, delaying the start of the project.

Construction for the 10-90 housing has already started, at Kilinto, in Akaki Kaliti District. The Agency is hoping to finish the construction of 14,300 houses this year.

The directive for the 10-90 scheme was also issued a month ago. It is in this document that the cut off income for those eligible to register was set.

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