Wednesday, June 19, 2024
Money TalksCity runs out of houses to rent, no solution in sight

City runs out of houses to rent, no solution in sight

Brokers did not have an easy ride with business slowing in recent times, due to a lack of available houses to rent out or the high prices the units command. Even more traumatizing is for those looking to rent one that is affordable.

The most common talk among those involved in brokering rental deals recently has been the state of the business, which has changed dramatically in a few years, taking the biggest toll on the people looking to rent.

For Tilahun Gudeta, who begun to broker rental houses over a decade ago, has never seen the lack of houses to rent. He covers areas from Gerji Roba Bakery, Gerji Mebrat Hail, Jackros to Yerer.

Two years back, Tilahun says, he would be informed of a free house to rent on a daily basis and the houses sometimes sit idle for weeks or even months.

“If a tenant leaves in the morning, the house can be occupied by another tenant in the afternoon at least,” Tilahun said adding, “Sometimes, the houses don’t even have to be vacant to be occupied if there is a rumor that the residing tenant is about to leave.”

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Charging between 10 to 20 percent of the paid amount per house, the brokers had the opportunity to show various houses to their clients with affordable prices, previously.

At least three years ago, a single room with a 10 to 15 sq.m area in a shared compound with the landlords and all facilities like bathrooms could go for 2,000 to 2,500 birr per month. Even less if the houses are located farther from the main roads.

This has somehow become a moot point. Rental prices for the same type of room now go for not less than 5,000 birr. The maximum price for a single room in an apartment at Gerji neighborhood with relatively better facilities go for as high as 7,000 birr.

Condominium flats are on another level for that matter. A studio room in a condominium flat goes for as high as 8,000 birr and a one bedroom unit is being rented out for 10,000 birr or over.

“I just don’t know where the tenants bring their money from to afford renting these units,” said Tilahun with a puzzled face.

Lack of accurate and recent data on the population of Ethiopia has always been a headache for anyone looking for information, with the census not being conducted for the past 16 years. The demography of the country and the cities in particular has changed dramatically aided by internal migration.

Up until 2020, the World Bank reported Ethiopia’s population reached 114 million people. House brokers have a firsthand experience of how the city is being overcrowded, seeing the number of people looking to rent a house.

Tesfaye, whose last name is withheld upon request, works in 4 Kilo and 5 Kilo area, usually serving university students that are looking for any type of houses near school.

He currently has about three to four requests from customers looking for a house to rent, but only manages to serve a few due to the larger number of people looking for a rental house.

“It is quite visible that a huge number of people are flocking to reside in the city,” he said.

This seems to be the reason why many are reluctant to leave the houses they have rented before, in fear of lack of availability. “Thinking of not finding another one or of higher prices; almost nobody leaves after renting a place,” said Tesfaye.

The city’s housing is not enough to accommodate its residents. The slow rate of constructing housing units has also contributed; with people registered for condominium housings more than 15 years ago, still waiting to receive the properties.

Holding registrations in two rounds, the Addis Ababa City Administration registered a total number of about a million residents to build condominium houses. Even though the demand is claimed to be above this, just one third of the houses have been built so far due to a lack of finances.

The city administration seems to be aware of housing problems and increasing rental prices. Last year, the administration banned landlords from increasing rental fees for three months and evicting tenants, in a response to an increasing inflation, and COVID-19.

These bans were reinstalled again in November 2021 and then in March 2022, but this had no impacts in easing the pressure tenants face, according to brokers.

According to Tilahun, it only created some chaos in the first three months. “Rentals of course didn’t stay the same in the last nine months,” said Tilahun.

However, many in the industry state brokers have a bigger role in increasing the rental fees and driving the market themselves, especially those brokering to rent out condominium houses.

Condominium owners give the power of attorney to the brokers to rent out the houses, managing the market themselves, as Tesfaye puts it. He has two flats he manages in Arat Kilo condominium Basha Wolde Chilot Site.

This measures put by the government to regulate the market has not abated the cost of living faced by tenants.

Last year, when the city administration came up with the decision to ban rental fee increases, the headline inflation stood at 23 percent. This has increased close to 37 percent this year, with food inflation reaching almost 43 percent and non-food inflation reaching 28 percent.

Several attempts to reach out to city officials for comments bore no fruit.

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