Rent is too high, FCH tenants argue

The Federal Housing Corporation recently changed their rental prices, setting a floor of 509 birr per square meter at the shops and offices it rents.
Now tenants are asking the Corporation to revise its prices and lower the rent to 71.50 birr per square meter.
Tenants made this argument at the meeting last Wednesday at Global Hotel. They pointed to an eight year old study conducted by the Corporation.
They argued that the Corporation is not taking into account a realistic view of the economy and market.
A woman who came from US doing business with her father in Piassa said she will shut her shops if the Corporation does not revise the new price.
“They asked us to pay 70,000 birr per month but we can’t make a profit at this price, for me it is not a problem. I can return to the US to work but what about the 43 workers who have built their lives on our company’s work,” she said.
Other tenants said the corporation’s new price will aggravate rental prices of private shops across the city.
“After setting the new price some private shops in the city have started increasing rental prices which will ultimately hurt consumer’s pockets. The corporation should have looked at the impact of the new prices before they set them,” a young tenant said at the meeting
Abrham Arega who is the member of the tenants’ committee said the corporation set different prices on the same offices in a building which demonstrates that the price increases were not properly studied.
Under the new revision 477 shops are set to pay 1,000 birr per month, 3,078 shops between 1,000 up to 2,000 birr, 447 shops between 20,000 to 30,000, three shops from 200,000 up to 300,000 birr and two buildings will pay 400,000 birr per month.
The corporation did not make any price revision for business shops in the last 40 years.
Before the new revision 3,880 of the shops were paying 65 birr per square meter and 2,052 shops were paying below 10 birr for a square meter. Surprisingly the rental fee of another 279 shops was below one birr per square meter.
The Corporation recently announced that instead of applying their new rental prices at all at once, tenants will pay 35 percent of the new prices the first year, the second year they will pay 70 percent and the third year they will pay the full revised price.