A new housing program for citizens with middle incomes has begun. It targets those who can make a down payment of 40pct of the home price before acquiring their house and the remaining 60pct within 17 years.
This affordable housing scheme was introduced two years ago when the government announced its five year GTP program. However the project is just getting off the ground now.
The houses will be divided into three levels. According to Kuma Demeksa, Mayor of Addis Ababa, the construction of 10,000 houses will begin this fiscal year.
“Site selection and other pre conditions have been completed,” he said.
The Addis Ababa City Administration announced that the construction of new middle class houses will begin this fiscal year.
Registration will begin in the next few weeks at 30 branches of Commercial Bank of Ethiopia (CBE).
According to the new scheme, the houses cost is determined by the number of bedrooms that the house has. The cheapest price is 128,590 birr for a house with one bedroom that has 55sqm total area. Two bedroom homes cost 200,475 birr and are 75sqm, and the price of the biggest house is 320,000 birr with three bedrooms and 100sqm of space.
According to the plan, residents have to save 857 birr per month to qualify for the one bedroom home, 1,337 birr for the two bedroom and 2,133 birr for the three bedroom houses per month. Abay Haile, vice president of CBE, said that if a potential resident can save the 40 percent within a short period of time, they will be able to obtain their home sooner than those applicants who will save the first down payment as per the schedule.
Kuma said they will soon make public the criteria as to how people can qualify for the new housing program and the registration process.
Though affordable, these houses are expected to be of higher quality and more spacious than the currently undertaken condominium housing projects.
Mekuria Haile, Minister of Urban Development and Construction, said that the people who were registered for condominium house programs eight years ago can be part of the new program. “But they are not allowed to be in both programs they must choose between the two housing options,” Mekuria said at the press conference on Thursday July 19 at Hilton Hotel.
The city administration has plans to construct studio houses, which will rest on 29sqm for lower income residents. According to the officials, these homes will cost around 76,000 birr and the government will subsidise 50,000 birr while resident will pay only 26,000 birr to get the studio houses. The low income residents are expected to save 10 percent of the total amount to qualify for the studio. According to Kuma the construction of the houses for low income residents of the city has already started. “We will develop 14,000 houses during this year,” he said.
Currently the city administration has formed an independent office responsible for this specific project.
To solve the residential housing problem, which is one of the major snags in the city; the government has been working on affordable housing projects for the past decade.
Low cost housing projects, popularly known as condominiums, were first introduced in the capital city in 2004 when the city administration was in the hands of former Mayor Arkebe Equbay, who is now a construction sector adviser for the Prime Minister.
But the low cost housing project is not satisfying the demand. The government has constructed tens of thousands of houses since the program was launched.
The housing scheme with a 40/60 percent payment is being introduced by the government to address the residents that are able to pay a little more than the condominiums cost.