Examining Rental Housing Affordability Among Eastern Ethiopian Cities

doi:10.7176/dcs/9-6-01

Abstract

The rental sector had been neglected in government housing policy and in the local government's resource allocation, though it apprehended a large number of urban dwellers and which will undoubtedly continue in the future. The study aimed to examine the rental housing affordability, assess rental housing characteristics, identify factors which determined rental affordability and devised alternatives to promote rental housing affordability. About 651 questionnaires were distributed to rental households and government officials were interviewed to capture experience on rental regulatory and administrative issues. Global and local experiences on government housing policy and strategies revealed that the rental housing was less emphasized or sometimes, it was totally ignored. However, results from inter-census survey report revealed that the rental sectors had contributed much in addressing the residential needs of the urban poor and the contribution of the sector in addressing the housing needs were raised from 45 percent to 54 percent. Results from the logistic regression analysis indicated us the rental levels in the sample cities were in the threshold at least for 60 percent of the households. However, this event does not mean that rent is affordable; rather the lessee had a compromised adequacy of housing with monthly rental price to be in acceptable range. Therefore, the government should devise alternatives to promote rental sectors through regulation and policy interventions. Among the possible measures, getting rental housing on the larger urban policy is the first and central intervention. The government should regulate the rental market through regulatory and policy measures by making balance the interests of both landlords and renters. Keywords : need for rental housing, rent affordability, housing condition, measures of affordability DOI : 10.7176/DCS/9-6-01 Publication date :June 30 th 2019

Highlights

1.1 Background of the study Housing is one of the necessities for humans, and it accounts for the largest share of household consumption expenditure
Out of the entire sample respondents, 38.1 percent of the households were found to be unable to afford based on rent to income category assessment methods. 61.9 percent of housing units are affordable in the criteria of income allocation
After the evaluation of policy documents and review from literature, one can arrive at a conclusion that an attempt to make all citizens own their house is not a practical option let alone in developing countries, it was impossible to be realized in a developed nation where housing finance is accessible and regulatory institutions are strong enough to perform their duties properly

Summary

Introduction

1.1 Background of the study Housing is one of the necessities for humans, and it accounts for the largest share of household consumption expenditure. Though their motives vary, the private sector, the public sector, and civil societies are already producing housing. Production falls far short of providing a decent and affordable shelter for all urban households. Many those who cannot have enough money to live in the formal market are pressured to share housing with family or friends or to lease (UN-HABITAT, 2008). For example, from 19942001, 63 percent of housing tenure in Cairo, 82 percent in Kisumu, 63 percent in Addis Ababa, 49 percent in Lagos, 42 percent in Johannesburg and 41 percent in Bangkok were rentals (UN-HABITAT, 2003)

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