Housing Development Program (HDP) in

Ethiopia

11December 2017
Belay File
 1. Introduction
• Ethiopia’s Economic growth is accompanied by
rapid rate of urbanization of about 5.3%.
• Rapid urbanization rate has posed several socio-
economic challenges and housing is one of
these.
• Housing shortage in Addis Ababa is one of the
major concerns for the government. Current
shortage is estimated to be 1.2 Million units,
increasing by 100,000 units each year (MUDH,
2017)
 Cont’d

• The Government is responding with ambitious plan

for building a large number of housing units.
Currently 140,000 housing units are under
construction and 430,000 more is planned in the
second GTP.
• Housing development program is based on key
principles and objectives that guide its
implementation since PASDEP (2006 -2010):
 2. Key Objectives of the IHDP
• Reduce Urban poverty through job creation
• Enhance/ develop saving culture
• Enhance the capacity of construction industry
• Renew/Upgrade slum areas
• Ensure fair wealth creation and distribution to the
low and middle income residents (Housing for low-
income households and ensuring security)
• Ensure proper handling of urban land based on
plan.
 3. The Strategy of Housing development
1. Housing Development as an instrument of urban
economic growth (Local economic development)
2. Integrated Approach to Housing Development
– Job Creation & Poverty Reduction
– Developing Private Sector
– Developing competitive construction industry
– Linking with slum reduction
– Mobilizing savings & creation of wealth through home ownership
– Linking with finance sector development
– Creation of better functioning housing markets
– Promotion of affordable houses: Low-cost and labor intensive
technology, cost-saving designs and construction methods,
economical land use & use of local materials
3. Mobilization of All Actors: Private Sector, Housing
Cooperatives and Government.
 Cont’d

4. Role of the Government

• Provision of serviced land and Infrastructure
• Capacity building
• Technology (low cost)
• Facilitating finance
• Coordination.

5. Role of the Private Sector

– 100% construction of the houses by private sector.
 4. Guiding Principles of HDP
a. Alleviating poverty and creating wide job opportunities,
b. Ensuring planned and economical use of limited urban
land,
c. Encouraging the construction of affordable and
standardized housing,
d. Encouraging the participation of development oriented
investors,
e. Ensuring equity and transparency in the housing
development, and
f. Reducing and eventually controlling illegal settlement
and construction.
 5.Housing Provision Modalities
• Various housing delivery mechanisms of which 4 is carried
out with government support
• Government’s Support is based on the income level of
residents:
A. Low income Housing (10/90)
 Target group- Low income people with monthly income of
Birr 1200
 Expected to save 10% of the price of the house in 3 years
and 90% is bank long term loan
 Government support- Land, infrastructure including
internal design, tax free construction materials, etc..
 30% of the constructed houses shall be drawn for women
in advance during the lottery drawing program
 Cont’d
 20% and 5% of the constructed houses shall be
drawn for government employees and physically
disabled persons respectively and they shall also take
part in the remaining lottery drawing program.

 Residents displaced through urban renewal get

priority if they opt for payment of compensation as
an alternative if they can afford the price of the
house
 Design-G+2
 Modalities (Cont’d)

B). Condominium Housing (20/80)

 Beneficiaries: Lower Middle to Middle income group
 Expected to save 20% of the price of the house in 5
years and 80% is Bank long term loan

 Government Support: The same as above except

exclusion of internal electrical and sanitary facilities
 Design G+4- G+12
 Allotment of the houses is the same with 10/90
 Modalities Cont’d

C) 40/60 Housing Program (saving Housing program)

 Target Group – People with upper Middle income
 Expected to save 40% of the price of the house in 5 years
and 60% is Bank long term loan.
 Gov’t Support: Same with the above but infrastructure
provision is only up to the construction site.
 Design: G+9 – G+18
 Commercial space included(up to 20%) to compensate for
infrastructure cost
 20% of the constructed houses shall be drawn for
government employees
 Modalities cont’d

D) Housing Cooperatives (100/0)

 Any resident may organize him/her self on the basis of
his/her income and acquaintance (working place, residential
etc..) and construct a house.

 Beneficiaries: People with above Middle income (AA)

 Individuals are required to cover full price of the house initial

installments

 Government support: Land, infrastructure up to construction

site, design, tax free construction materials.
 Modalities cont’d

E) Housing Provision by Real Estate

 Target Group- People with high income
F) Housing Provision by Individuals
 For Own and for rent
G) Housing Provision through Public private partnership
 Gov’t provides land
 Investor – Avails finance, knowledge and technology
 6. Achievements to date (MUDH 2017)
• Total of over 385 thousand houses have been
constructed and under construction.

• Over 237 thousand housing units have been transferred

to beneficiaries.

• 846 thousand jobs are created.

• 2000 contractors participated in the program

 Achievements Cont’d

• Housing program has created strong linkages with MSEs

and local industries through Demand. About 11, 691
MSEs participated, as sub-contracting firms and
received capacity building (skill training and MFI loans)

• Extended Value chains has led to strong job

performance of the program.

• Housing and Cobblestone Programs have contributed

strongly towards industrial growth and jobs in Ethiopia
over the last decade.
 7. Challenges in Implementing the Policies
• Shortage of Housing Finance (Key Challenge)

• Inadequate Infrastructure Supply

• Shortage of Construction materials

• Scarcity of open land in the inner City

 Challenges Cont’d
• Limited Capacity in executing urban designs,
and neighborhood designs in short period of
time
• Low construction project management
capacity
• Poor housing administration (Key Challenge)
• Affordability issue
Thank You!