Mekuria Haile, Minister for Urban Development and Construction (centre), answered questions forwarded by the stakeholders at the closing day of the meeting along with Tadesse Gebregiorgis, deputy bureau head (left) and Amare Asgedom, head of housing development & government building construction bureau.
The Ministry of Urban Development & Construction (MoUDC) unveiled a final draft of its urban housing policy and strategy, last week, which proposes to increase housing supply through eight existing and new modalities to address the deep-seated housing problems in urban areas.
Officials from the Ministry presented the document to regional and federal officials involved in the sector, parliamentary representatives, real estate developers and experts from Civil Service University for evaluation on Tuesday, October 31, 2012 at the Hilton Addis.
The government had long been criticised for not having a consolidated policy to address the housing problem in this country. It is only in 2005, under the Plan for Accelerated & Sustained Poverty to End Poverty (PASDEP), that the government rolled out its housing strategy, albeit under an urban development strategy. Since then, the construction of condominium houses had been undertaken as the visible approach to redress the problem.
In the new policy, the government has staked out a huge role for itself in terms of increasing the housing stock of urban areas. It plans to be the sole executor of five of the eight proposed methods of increasing housing supply, including the recently introduced government subsidised housing schemes for low and middle incomers, known commonly as 40-60 and 10-90, in reference to the government proposed method of financing the cost of the houses.
The other three modalities to be executed by the government include the condominium housing project the government has been involved in since 2005; a new plan to build rental houses for low income citizens and providing accommodations for those working in industrial areas, university professors, and others employed by government to carry out the Growth & Transformation Plan (GTP) projects.
The 40-60 and 10-90 schemes were supposed to be unveiled along with the housing policy, according to Tadesse G.Giorgis, deputy bureau head at the Housing Development Strategy & Legal Affairs Directorate who made a presentation of the draft housing policy to stakeholders during the consultation last Tuesday.
However, seeing the current housing problem, the Ministry thought it would be better to announce these plans earlier so that their implementation could start as soon as possible, he explained.
This was unpalatable to one participant of the consultation who commented that the action was like pushing the cart before the horse. “The policy should be well developed before pushing these schemes forward,” he commented.
Indeed, the government has now taken a step back to further work on these schemes after it had been in the running. Commotion ensued at the start of the current Ethiopian year as rumors over registration overwhelmed the city, before officials at the Commercial Bank of Ethiopia (CBE), the financier of the schemes, declared that the exact date of registration will be announced in the future.
This was raised during the meeting by representatives from different regional and urban development construction officials and members of the parliament urban development and construction standing committee.
“From what had ensued at the start of the year, we have come to understand that the public has only pinned its hopes on the 40-60 housing scheme and is uniformed about the rest of the plans that the government is offering” explained Mekuria Haile, Minister of MoUDC, to audiences on Wednesday, when he appears to answer final questions and close the meeting.
When the Ministry was outlining the 40-60 scheme, it was targeting the upper middle-class that can save quickly or pay upfront, according to Mekuria.
“We did not plan it as an option for the civil servants,” he explained. “And we never thought we would address the whole housing demand with the initial ten thousand homes we plan to build under this scheme.”
The Ministry has planned for civil servants to save a third of their income to own homes under the government scheme.
“For most civil servants, this would mean saving for the 10-90 housing scheme,” Mekuria stated.
It is only when the public is sufficiently aware of its options that registration would begin, according to Mekuria. But registration is not just limited to the 40-60 and 10-90 housing schemes but for condominium projects as well.
“Those who have already registered and are on the waiting list for condominium housing will have to get re-registered ” Mekuria announced during his question and answer session.
The earliest of the home owning schemes is marked by inefficiency. Amongst the total 430,000 people registered to get houses, only 119,431 have managed to get one under the scheme. About 30pc of registrants for condominium houses called to receive their houses do not show up, according to Mekuria.
“The government spends around seven billion Birr annually for this project, and needs to cut out inefficiency,” Mekuria stated. “Therefore, we have decided to reregister people and know the exact number that are still eligible for the homes.”
Registration for all three modalities; condominium, 40-60 and 10-90 scheme is bound to start at the same time so that people can pick the conveneinet choice.
Next to the 40-60 scheme, the issue that garnered the most comments during the evaluation project was rental housing. Altough it had not passed a final decision yet, the government plans to build 5,000 apartments in one, four and eleven storey buildings, the draft document states. This modality is the only one that had not yet gotten a decision.
During the meeting, representatives from the Government Housing Agency (GHA) asked to be given mandate.
The late Prime Minister Meles Zenawi, a facilitator behind most of these projects, was not a fan of this proposed scheme, demanding instead to focus on making citizens homeowners, according to a source from the MoUDC. “There is a lot of debate whether this will be carried out.”
By the end of the consultation meeting, however, no decision had been reached whether to include this in the scheme or not.
Those in the private sector that had attended the meeting called for more private sector involvement within the schemes. “The government should provide us with the appropriate incentive so that we can build low-cost houses for middle and low incomers,” a representative from Habesha Construction Materials and Development.
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