Contents

1. Introduction....................................................................................................................2
1.1. Location of the Study Area...........................................................................................5
1.2 Brief Account of the Project..........................................................................................6
1.3 Vision.............................................................................................................................6
1.4. Goal...............................................................................................................................6
1.5. Objectives:....................................................................................................................6
1.6. The Final User of this Project.......................................................................................7
1.7 The Action Area of this project.....................................................................................7
1.8. Structural Plan Functioning of the Study Area.............................................................8
1.9. Existing Land Use Analysis..........................................................................................8
1.10. Mixed Land Use Analysis........................................................................................10
1.11. Slope Analysis..........................................................................................................12
1.12. Parcelation of Proposed Site Layout.........................................................................13
1.13. Building Typology....................................................................................................14
2. Housing Provision Condition in Ethiopia..................................................................15
2.1. Types of Housing........................................................................................................15
2.2. Indicators for Housing Study......................................................................................17
2.3. Urban Housing Problem in Ethiopia and the underlying Causes...............................18
2.4. Affordability & Building Material for Housing.........................................................19
2.5. Urbanization in Ethiopia.............................................................................................19
2.6. Urbanization and Population Growth in Addis Ababa...............................................20
3. Environmental and Economic Analysis........................................................................29
4. Action Plan of this Project.........................................................................................30
5. SWOT Analysis.........................................................................................................33
6. Conclusions & Recommendations.................................................................................34
6.1. Conclusions.................................................................................................................34
6.2. Recommendation........................................................................................................35
Annex-------------------------------------------------------------------------------------------------II

1
 1. Introduction
Gozamin Trading PLC is working in printing service for the last five years. It is
established by the year 2018. Gozamin Trading PLC is playing tremendous role in the
printing service. It has produced different types of printing outputs, such as agendas of
different institutions, magazines, bulletins and other legal documents. Gozamin Trading
PLC’s currently operational building is found in the busiest corridor of the City which is
locally known as Gojam Berenda Area via to Mercato Area, in Arada Sub City. The
requested plot is found at the current office compound of Gozamin Trading PLC. In
addition, there is under developed land which is currently left idle and the developer
would like to request the mayor office to negotiate a lease holding for about 253 meter
square of land. The owners of this project are planned to develop a mixed use (mainly
apartment) complex that will not only enhance the area, aligning it with the current
development of the city; but as well as create an employment opportunity for youth in
this neighborhood.

Gozamin Trading PLC will develop an apartment complex that would be comparable to
the existing buildings of this locality in order to create convenient and habitable areas that
will be compatible with the current development of the City – Mega Projects and other
development schemes.

The Brief Account of the Housing and Apartment Development Sector

The term ‘housing’ can be conceptualized as the residential environment consists not
only the dwelling unit but also the site and setting, neighbors and community,
municipalities and public services, rules, regulation and standards, habitability and
accessibility, right and responsibilities and cost and benefits. Housing is also a physical
structure, a set of construction materials and space, building technique, materials and skill
to build a house. A building, which has cost and impact on consumed productivity and
economic value. Related with legal measures how and where to build and how to manage
it. A possible source of investment and profit making and access for employment
opportunity is made particularly for low-income group.

2
A population of more than 5 million and more, Addis Ababa is not only the political
capital but also the economic and social center of Ethiopia. Addis was founded by
Emperor Menelik II in 1886 and has an area of 540 square kilometer, sprawling and
hospitable city still bear the stamp of his exuberant personality. As the seat of the
Headquarters of the African Union (AU), United Nations Economic Commission for
Africa (UNECA) and other regional and international organizations, Addis Ababa is the
diplomatic capital of Africa. The presence for more than 100 embassies and consular
mission has enabled the capital to a venue of international activates and to be the fourth
most important center of international organization as well as embassies after
Washington D.C., New York and London. This phenomenon could contribute remarkable
effect for the greatest demand of Mega Business Head Quarters (Addis Ababa City
Administration External Relation Office, AACAERO, 2012).

Wide tree-lined streets, fine architecture, the combination of traditional with the modern
and the glorious weather characterize the capital to be delightful place to explore. With
an altitude of 1800-3200 meters above sea level including the Entoto Mountains, Addis
Ababa enjoys a mild climate and an average temperature of 16 Oc. The city is endowed
with hot springs, which was one of the major reasons for it to be established as the capital
of the country (ORAAMP, 2002).
In regard to business partners and tourist destination resource potential, Addis Ababa
owns old palaces, many churches and mosques, about 13 monuments, 10 museums, and
traditional markets including Mercato which is considered as the largest market place and
the greatest tourist attraction destination in Africa. Especially the actual location of this
project, Residential apartment, very proximity to city centers Arat kilo, Piazza and
Mercato, could have extraordinary advantage of tourist attraction, business
accommodation and better market access.
Just any other capital cities of the world, Addis Ababa has facility for everybody to pass
enjoyable nightlife-at the variety of nightclubs offering all manner of music from
traditional Ethiopian to modern pop. In case, there are many hotels and restaurants in the
capital ranking from basic service accommodation facilities from ordinary to 5 stars.
However, there is a shortage of standard apartment facilities.

3
Addis Ababa is the seat of a number of different regional, continental and international
organizations, and they are involving in provision of their head quarters (HQs) in this
Capital City. The City would have a paramount importance for national economy in
general and private sector in particular. Addis Ababa being the seats of many
international organizations and its potential to visitors lacks standard business centers,
hotels, standard apartments, cultural and modern restaurant services which could satisfy
international business firms. To fill this gap, the owners envisage involving in the
development of mixed use building (mainly apartment) building.

The Owners set an objective to establish high standards of Courtesy and Hospitality
services at level of “High Standard Residential Apartment”. This Residential Apartment
Building is planned to have services like super market, banking, insurance, restaurant and
cafeteria, gust house rooms, conference hall, shops, sauna bath, gymnasium and similar
facilities. The developers’ location is found at commerce and business category of the
structural plan.

4
1.1. Location of the Study Area
This study area is located in Addis Ababa at Arada Sub City Woreda 02, locally known
as Gojam Berenda Area.

The absolute location of the Study Area is expressed as follows. However, this is taken
from four important corners of the Study Area. These points are, from left top to right,
X=471461.3900; Y=998795.4210, and, X=471467.5100; Y=998800.0510; and from left
bottom to right is X=471476.3800; Y=998776.5510 and the right rear bottom point is
X=471485.0400; Y=998786.1410 respectively.

5
1.2 Brief Account of the Project

Project Location: Addis Ababa, Arada Sub City, Woreda 02

Project type: Mixed Use (Mainly Residential Apartment)
Project life span: 2 & half Years from site provision to final execution
Area Requirement: 253m2
Job opportunity: 20 employees will be employed permanently and 10 will be
temporary
Productivity capacity
Per day: 90,000 Eth Birr/Day
Water Consumption: 100 m3 / Day
Power consumption: 210 KW/ Day
Owner of the project: Gozamin Trading PLC
Capital of the Project: 182,873,180.55 Birr

1.3 Vision
To see the area and the place well developed within appropriate infrastructure
which is accompanied with high standard residential apartment and other service
and facilities in order to develop a residential empire in this place.

1.4. Goal
 To support the development process of the City.
 To generate business and minimize shelter and dwelling problem.

1.5. Objectives:

This project is designed to alleviate the problem of standard shelter facility; and at
the same time to reduce unemployment by creating jobs opportunity.

6
1.5.1 Specific Objectives
 To create job opportunities for jobless people.
 To solve the problem of standard residential apartment and related facilities.
 To create revenue for owners of the project.
 To create better service delivery mechanism and culture.

 To generate income for the government in the form of tax.

1.6. The Final User of this Project

Even though this project is being operated under the ownership of private owners, it is
planned to serve majority of the public in different perspective. People of this area are
expected to be beneficial in different perspective. First, they could directly participate
in engagement of construction work. Second, majority of the residents of this area are
the immediate beneficiary from the direct services which are delivered by this mixed
use building (mainly apartment) project. In other hand, the final output of this project is
served as an input for over all development of the entire City and the Country as well.

1.7 The Action Area of this project

The Action Area of the project is in Addis Ababa, Arada Sub City Woreda 02. By the
current structural plan of the City, the land use is Commerce and Business. The total
plot area of the project has covered an area of 253m2. All of this area is expected to be
appealed for lease holding.
Moreover, the existence of excessive market opportunity in the action area and in the
nearby district has proved the feasibility of the project. In addition, the existence of
ample labor force and better administrative logistic around this action area has
contributed its maximum effect for the feasibility of this project in this action area.

7
1.8. Structural Plan Functioning of the Study Area

Structure Plan is a binding technical, institutional and policy framework for guiding the
long term development of a designated city or an urban region. It is a long-term
socioeconomic, spatial and urban management vision and statutory tool for urban
development and a basis for other urban development plans. It is a plan that guides and
gives framework to ensure a coordinated and sustainable development. It is an umbrella
urban development plan that serves as a bridge between wide area or regional plans and
LDPs.
The Newly functioning Structural Plan of Addis Ababa City has indicated the area as the
following perspective. The land use of the Project Area or plot is given for commerce and
business purpose. This type of land use categories including activities such as residential
apartment, hotel, super market, banking, insurance, restaurant and cafeteria, gust house
rooms, conference hall, shops, sauna bath, gymnasium, medical facilities and similar
facilities. Furthermore, the existence of 25 meter width road, from Yohannes Church to
Gojam Berenda Area has border the Study Area at the nearby front edge. In addition, the
building height of the plot is found at Zone 3; the FAR (Floor Area Ratio) is 2 to ∞;
where the required maximum height is 70 meter for plots which are found frontage of
greater than 20 meter.

1.9. Existing Land Use Analysis

Land use means a spatial distribution or geographical pattern of city functions, residential
areas, industry, commercial areas, retail business and space for governmental ,
institutional and leisure function. In some literature the meaning of" land use "involves
two related parts. First, in terms of activity pattern of people, firms and institutions as
they use space and the second part in term of physical infrastructure or facilities which
are made to accommodate these activity patterns and functions (Brunden W.Rs the land
use transport system second edition p 2-3).
According to Berke & Manta-Conroy (2000) argue that land use plans should be
developed based on six long range sustainable development principles. Harmony with
nature: land use and development support ecosystem processes. Livable built
8
environment: development enhances fit between people and urban form. Place based
economy: local economic activities operate within natural system limits and meets local
needs. Equity: land use pattern provide equitable access to social and economic
resources. Polluter pay: those who cause pollution bear its cost. Responsible recognition:
communities minimize harm to other jurisdictions in pursuit of local goals.
Land use planning (LUP) is an iterative process based on the dialogue amongst all
stakeholders aiming at the negotiation and decision for a sustainable form of land use as
well as initiating and monitoring its implementation.

Land use planning (LUP) is an iterative process based on the dialogue amongst all
stakeholders aiming at the negotiation and decision for a sustainable form of land use as
well as initiating and monitoring its implementation.
Land use planning provides the prerequisites for achieving a sustainable form of land
use, which is acceptable as far as the social and environmental contexts are concerned
and is desired by the society while making sound economic sense.
Land Use Planning has to be understood as an aspect of “spatial planning”, that refers to
the “space” as a multidimensional concept that describes and reflects the synthesis of the
physical environment and its use by humans, whereas traditional “land use planning”
deals only with the efficient use of land (“land” as a synonym for the surface of the
earth). (Philip.R. Berker.etal. (2006): Urban Land Use Planning (University of Illinois
Press).
The existing land use status of the study area is mostly held by mixed use activity. This
activity is carried on within an area of 253521 m2. However, there are different land use
activities at the vicinity of the study or project area. For instance; commercial,
manufacturing, business and other similar activities are carried on around this locality.

9
1.10. Mixed Land Use Analysis

Mixed land use category can accommodate land use type such as industry,
manufacturing, commerce, residence and storage that requires not less than 500m 2 based
on Addis Ababa City Master Plan. In addition, service and facilities such as military
establishments, prison, waste treatment plants, land fill sites, cemetery and slaughter
houses are being classified in this category. Furthermore, social services are categorized
into mixed development land use category.
This type of development has been provoked with new approach of Urban Planning. It is
assumed that mixed use development could make certain locality more vibrant since one
service turned off the other would be active. Furthermore, mixed development has
contributed a lot for reducing mobility since all services have clustered each other to the
nearest proximity.
10
According to Urban Design Compendium; successful communities requires a full range
of local services and facilities, including commercial, educational, health, spiritual and
civic uses. These need to be conveniently sited connected to residential areas by safe and
comfortable routes. Traditionally, towns have developed around cross roads, centers of
activity or stopping places, with the incremental growth of housing, retail, community
and employment uses around the core. Yet despite the virtues of mixed development, in
modern development it often remains the exception, rather than the rule (Lewelyn, 1998).

The benefits of mixed use development are:

More convenient access to facilities
Travel to work congestion is minimized
Greater opportunities for social interaction
Socially diverse community
Visual stimulation and delight of different buildings with in close proximity
A greater feeling of safety, with ‘eyes on street’
Greater energy efficiency and more efficient use of space and buildings
More consumer choice of life style, location and buildings
Urban Vitality and street life
Increased viability of urban facilities and support for small business (Moughtin,
2003).
As the above map depicts, the function of the proposed area (which is rounded by Blue
color) is allotted to mixed commerce. It is supposed to develop different business
oriented activities by residing on this actual location. It is coded by (MUB) as the case of
the current structural plan of the City.

11
1.11. Slope Analysis

The slope condition of the Study Area is favorable for construction purpose. The Study
Area has slope variation of 9-15% at the site level and 10-19% at the locality level
respectively. Furthermore, the gradient pattern increases from Southern to Northern part
of the Study Area.

12
1.12. Parcelation of Proposed Site Layout
As the Parcelation of the proposed site layout depicts that the mixed use building (mainly
apartment) has occupied 200m2 of the entire project plot. In case, from this built up area
the BAR would be 79 %. It is a moderate portion of built up area which is almost over
average to the entire plot area; and it is less favorable for percolation of water to the
ground. There is allotted some parking area on the site; it is 30m 2. It could accommodate
only two private vehicles at once. In addition to this parking space, there is ample parking
space at the basement of the building.

13
1.13. Building Typology

According to Newly revised Addis Ababa City Structural Plan, the building height
regulation of this special locality is at Zone 3. Based on this; it has been proposed that
B+G+12 story building. According to FAR of this area, the range is in between 2 to ∞.
Furthermore, the sample model building has been shown as the following.

B+G+12 Proposed Building

14
 2. Housing Provision Condition in Ethiopia

The concept of housing goes beyond being a shelter. UN habitat (1992) defines housing
as the lay out and development of residential unit in which people can live in pleasant,
peaceful & healthy surrounding with social, cultural & recreational facility individually
& part of the resident place
As per NUPI (2000) also defined housing in terms of space i.e. assuming crowding, this
definition manifests the need for multipurpose houses like private or shared toilet and
bathing facility, private or shared tap water and access road minimum 4-6 meter.
This study defines housing in its multi-dimensional perspective as in separable human
development indicators as residential environment that includes physical structure that
family uses for shelter and facilities (water, sewer, toilet, kitchen, electricity, etc).
Housing is one of the basic needs of human being but the scarcest good. These days, the
problem of shelter becomes a global issue and holds the attention of policy-makers and
governmental officials, because of its unique nature; housing remains the unmet needs of
the majority and became a potential social crisis for most city center of developing
countries. Like any other developing countries, urban areas in Ethiopia are adversely
attacked by the problem of housing. Even within Ethiopia the magnitude of the problem
varies from town to town. The extent of the challenge derives not only from the
enormous size of the housing backlog and the desperation and impatience of the
homeless, but stems also from the extremely complicated bureaucratic, administrative,
financial and institutional framework inherited from the previous system. Housing
problem has profound impact on health, welfare and productivity of society. It is also one
of the best indicators of the quality of living in the society.

2.1. Types of Housing

In developing countries there are different types of housing provision for the people in
need. This includes the different housing schemes undertaken by different actors in order
to solve the housing shortage problems. The different types of housing as an achievement
mechanism in the supply side of urban housing are examined below.
15
 Public housing:- this type of housing provision is handled by government for the
urban poor/low income or middle class group and the houses are also managed by
the government itself.
 Private housing:- mostly such kind of housing concerns the middle and upper
income group, enterprise and individuals etc.
 Cooperative housing:- is any form of organization and actor in which small or
large group of people undertake housing initiative cooperatively to obtain housing
to be owned by those who occupy it. The main purpose of cooperative is to meet
the need of housing by voluntary cooperation.
 Self-help housing:- this type of housing strategy involves non-cash investment.
It can also be built by community participation or encouragement of self-help
initiatives with their own input. It is easy to implement but the coordination is
difficult.
 Multi story (condominium) housing cooperative:- this strategy of hosing
provision is the most successful housing schemes especially in their efficient and
economical usage of land resource. This type of buildings have a great
contribution on making healthy environment and attractiveness it is a common
investment buildings but one part of it is own possession and the services are used
commonly with the other housing units.
 Low cost housing:- this does not mean less standard houses, but those live in that
house are low income group and most of the time such kind of buildings is
constructed by loan and the beneficiaries are obliged capacity to return the
borrowed money.
 Upgrading Strategies:- this program takes place in the slum areas which have
limited coverage of urban service, unreliable service provision, deteriorated
houses and highly congested area. The efficient and active actors in this strategy
primary are government and non-government and community based organizations
(Alamerew, 2007).

16
2.2. Indicators for Housing Study

Indicators are the pieces of data we actually collected and sort in to categories they are
also what we are willing to accept as evidence to support variables. Accordingly the
indicators that are used to operate our situational analysis are summarized as follow
(Endale, 2001)
Housing characteristics indicators
 Construction materials
 Number of rooms and size of each room
 Utilities attached to housing unit
 Plot size & Housing density
 Age of housing
 Tenure etc.
Indicator of factor for squatting indicators
 Access to credit facilities and financial resources
 The existing land regulation
 Demand and supply for housing
Indicators for measures to improve housing problems include
 Site and service scheme
 Self help housing problem
 Informal credit and saving
 Slum up grading
Indicator for Service Quarter & number of Rooms
 Quarter service & number of Rooms is used as an indication for the following
characteristic
 Adequacy /comfort of housing
 Density and overcrowdings condition,
 Number of persons living per house/per room,
 Overcrowdings

17
2.3. Urban Housing Problem in Ethiopia and the underlying
Causes

Today urban centers around the world, particularly in developing countries like Ethiopia
are facing serious challenges is not only to how fill the gap between demand and supply
of urban housing, But also how to assure sustainable housing development. The problem
primary emerged from the massive rural urban migration coupled with local capacity of
local government, which can be manifested by in adequate financial resources, lack of
awareness to the existing need, less qualified staff, unclear accountability cumbersome
administrative procedure to cope up with in increasing demand for housing. The rapid
urbanization accompanied by low level income and net saving and skewed income
distribution and high cost associated with in the infrastructure shelter, urban services are
the critical factor contributing to the deterioration of urban environment in most of our
cities & towns.
The other indicator of urban housing problem is number of person per room, which will
give the degree of congestion of housing unit as different literature shown as, In the case
of Addis Ababa the ratio is 2 to 3 person per room which is very congested compared
with the size of room and as per the recommendation of UN habitat sufficient living area
is less than 3 people per habitable room minimum size of 4 meter sq. Then the growing
problem associated with poor urban management is posing a tremendous challenges and
shortage of urban housing, unemployment, lack of basic urban services, social diversity,
in creased of housing rent local price squatter settlement, slum settlement, environmental
degradation etc.
To sum up, the severing factors for acute shortage of housing or housing production are:
 Low level of the households income
 High price of construction material
 Inefficient land provision for housing which excludes the majority of
urban population
 Government regulation
 Security of tenure

18
  Housing standards & regulation, codes.
 Absence of housing finance and credit scheme for low income groups

2.4. Affordability & Building Material for Housing

In case of Ethiopian urban centers, access to housing for low income groups has been
constrained by different factors. One of these is the cost of housing construction under
the given building standards. In reality housing cost is not only the cost of construction. It
also includes the acquisition cost of land and transaction cost where transparent
administration and institution are not in place. Despite the availability of raw materials
and cheap labor market for building material production in Ethiopia, the locally produced
construction materials are too cost .there for the combination of all deficiencies is leading
the low income group towards housing in-accessibility.

2.5. Urbanization in Ethiopia

Urbanization refers to a growth in the proportion of a population living in urban areas and
the further physical expansion of already existing urban centers. The level of urbanization
in Africa is low (37.1%) when compared with developed countries like Europe (72.7%)
and North America (79.1%). However, urbanization in the developing world in general is
progressing much faster than in developed countries, which may reach 3% or even 4 % a
year. The fast rate of urbanization in developing world is attributed to rural–urban
migration, economic growth and development, technological change, and rapid
population growth.

Ethiopia's low income reflects Ethiopia’s relatively low rate of urbanization. With 17
percent of the population in rural areas (outside urban areas), urbanization is concentrated
in Addis Ababa (5+ million), which is the only urban area in the nation with more than
500,000 population. Ethiopia can expect to experience a strong rate of urbanization in the
decades to come, as people flock to the cities to seek better standards of living. By 2030,

19
the total number of urban residents is projected by the United Nations to rise to 28.4
million from 13.9 million in 2010.

Despite having one of the lowest proportions of urban population in the world at only
16.7 per cent, Ethiopia is rapidly urbanizing at a high annual growth rate of 3.49 per cent.
In the space of seventeen years the urban population more than doubled from 6.4 in 1990
to 13.8 million in 2007. The population is very young with 45 per cent under 15 years of
age. The combination of high population and urban growth rates coupled with a high
prevalence of urban poverty have placed enormous strain on Ethiopian cites. 80 per cent
of the population lives in sub-standard slum housing that needs complete replacement or
significant upgrading. Ethiopian cities suffer from a high degree of homelessness,
environmental degradation, and urban decay, a shortage of infrastructure and basic
services, and high unemployment rate.

2.6. Urbanization and Population Growth in Addis Ababa

Addis Ababa is among the fastest growing urban areas in the world. Since 1970, the
population has increased by nearly three times (Figure below). However, the spatial
expansion of the urban area has been much greater. The earliest available Google Earth
satellite photos (1973) indicate that the urban land area (continuous urban development)
has expanded over 12 times. Thus, the urban spatial expansion has been at least four
times that of the population over the since the early 1970s.

20
Since 1973, the urban population density of Addis Ababa has declined almost three
quarters, from approximately 75,000 per square mile or 29,000 per square kilometer to
20,000 per square mile or 8,000 per square kilometer. Addis Ababa represents yet another
example of the counter-intuitive reality of growing urban areas simultaneously becoming
less dense, because population growth occurs the generally less dense periphery in an
organic city. It is not unusual for urban analysts to (wrongly) assume the opposite.

Currently, Addis Ababa is divided into eleven administrative sub-cities. Four central sub
cities are comprised from the oldest portions of the city. The four central sub-cities of
Addis Ketema, Arada, Kirkos, and Lideta occupy only 8% of the city’s total area (5,200
ha2). Six significantly larger sub-cities surround these central sub-cities. The outlying
sub-cities of Akaki Kitaly, Bole, Kolfe Keranio, Gulele, and Lemi Kora. Nifas Silk Lafto,
and Yeka collectively equal 92% of the total area (46,800 ha2). Separating the four
central sub-cities from the six surrounding sub-cities highlights changes between the
older and newer parts of the city. In Addis Ababa, urban planning and land development
are the responsibilities of the City Administration. Twenty-five percent of the city’s
budget is spent preparing and servicing land for development.

Urbanization has its problems, but also economic advantages. The GDP-PPP in
Addis Ababa, according to a PWC study, is up to six times higher than that of the
rest of the nation. Assuming that this ratio held to 2010, The GDP-PPP per capita

21
of Addis Ababa would be $6,000 or more. Moreover, the study predicted that
Addis Ababa would experience the 5th greatest economic growth to 2025, out of
151 urban areas. This would result in growth greater than that of Shanghai and
Beijing. The four predicted to grow faster are the two large Viet Nam urban areas
(Hanoi and Ho Chi Minh) and two in China (Guangzhou in the Pearl River Delta
and Changchun in Manchuria).

The landscape of Addis Ababa, Ethiopia, is rapidly changing do to population and

economic growth as well as significant public housing investment. In 2006, the
‘built’ portion of Addis Ababa was 24,942 ha or 48% of the area within the city’s
municipal boundary (we included transitional bare land and mineral and gravel pits
as ‘built’ areas but excluded areas of agriculture and vegetation). By 2016, the
‘built’ portion of the city had expanded by 10,108 ha to 35,050 ha (67% of the area
within the city’s boundaries). The annual rate of expansion during this decade was
1.9%. Based on the 2007 census and 2017 population projections, the population
increased by an estimated 714,000 people. Between 2006 and 2016, every
additional person increased the urban area by .014 ha.
In 2006, 17,008 ha (33%) of the city’s land area was categorized as residential. In
2016, this increased to 20,122 ha (39%). In 2006, 51% and 31% of the land in the
central and surrounding Sub Cities were occupied by housing, respectively (Table
2). By 2016, housing in the central sub-cities had decreased to 43% and housing in
the surrounding sub-cities had increased to 38%. In the central Sub Cities, the
greatest decreases were in informal housing (from 1990 ha to 1540 ha) and low-
rise/mixed use development (602 ha to 294 ha). In the surrounding sub-cities, the
area of new condominiums increased notably from 186 ha to 2155 ha and the area
of informal housing decreased from 7647 ha to 6181 ha. The southern sub-city of
Akaki Kality has the greatest increase in new condominium housing.
There’s been a huge expansion of the periphery around Addis Ababa. Extensive
tours around the urban area provide evidence of relative prosperity. It appears that
Addis Ababa is rebuilding itself around its urban core. There is major construction
in three directions from the urban core.

22
Addis Ababa has an estimated population of approximately 5+ million with annual
growth rate of 3.8%. This means it will double every 19 years. Some
commentators believe that Addis Ababa may triple in size over the next 30 years
due to rates of rural-urban migration and the natural rate of increase in the city.
The city covers an area of 527km2 (54,000 ha) and has a population density of
5,165 people/km2 (national average = 83/ km2 ). Up to 80% of the population is
said to live in slum conditions. The living conditions are exacerbated by:
Only 60% of the city’s water demand is met and up to 40% of water is wasted due
to leaky pipes and inadequate infrastructure.
The city only has 110km of sewers, which constitute only 4% of the city’s
required network. In 1994, Addis Ababa was the only city in Ethiopia with a
sewerage system.
Only 65% of the city’s waste is collected by the council and the rest is disposed
of through informal means. GA ISIG Study Tour 2013 (Ethiopia) 3
Urban poverty is endemic and rates of unemployment are high, with one in three
unemployed in Addis Ababa.
70% of the road network in the capital is made of gravel

Addis Ababa is a fast-growing city that is overwhelmed by many problems,

including extensive urban poverty, joblessness, inadequate housing, severe
overcrowding, congestion and underdeveloped infrastructure. Ethiopia also has a
long history of people not having formal access to land. Since the 1970s, for
example, Addis Ababa has witnessed an acute shortage of residential housing,
which has worsened as the urban population has increased due to a mix of rapid
natural increase and high rates of rural-urban migration leading to a growth rate
approaching 4%per year. At the same time, the lack of investment in housing has
led to a rapid degradation of the existing housing stock in the city. The
development of slums in Addis Ababa is, unlike other examples from other
countries, not simply a result of urban poverty. This means that the slums of Addis
Ababa are not exclusively the preserve of the urban poor.

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2.7. Housing Condition in Addis Ababa

With an increase in rural-to-urban migration, housing in cities remains one of

Ethiopia’s most pressing challenges. With a 66.5% share of the country’s housing
units, the private rental arrangement is prevalent in most cities in Ethiopia, a
research document from the Ethiopian Institute of Architecture, Building
Construction, and City Development, (EiABC) indicates.
To address poverty and the lack of affordable housing nationwide, the federal
government initiated a large-scale public housing program, called the Integrated
Housing Development Programme (IHDP), in 2005. Unlike earlier efforts to
incentivize private development of low income housing, IHDP is a public effort
using money from either the federal treasury or borrowed by the government from
the state bank. The initial goals of this housing program were to construct 400,000
units countrywide, create 200,000 construction jobs (thus decreasing
unemployment rates), instigate 10,000 micro-enterprises, and enhance the
construction industry with the development of skilled labors and material
suppliers.
Addis Ababa’s Integrated Housing Development Programme IHDP (condominium
housing) was launched in 2005 by the city municipal authority and was aimed at
upgrading the inner parts of the city. The programme aimed to construct housing
units along with their associated infrastructure. The units were to take the form of
condominiums, creating affordable low-cost, high-density housing in the city.
They were to be available in a number of different sizes to meet different needs
(e.g. studio units, three bedroom units, etc.). The programme specifically targeted
the informal settlements and housing would be allocated using a heavily over-
subscribed public lottery. The plan is to clear all informal settlements from Addis
Ababa by 2020. As of 2020, the government, through the Integrated Housing
Development Programme (IHDP), has built 400,000 condominiums, indicating
that there is still a significant supply gap, according to the World Economic
Forum.

24
The IHDP has focused on increasing the supply of owner-occupied housing for
low and middle-income residents. These units are locally referred to as
‘condominium’ housing.
Recently, the Honorable Wro Adanech Abiebie, Addis Ababa’s mayor, said the
city is working to build over 1 million houses in the capital, and the Property 2000
deal was part of this plan, which is backed by the United Arab Emirates. She added
that the city would develop the plan using public-private partnership, with Property
2000 providing finance for the housing and the city government the land.
According to reports in the Ethiopian media, the land will be allocated near the
city’s Ethio ICT Park.
The housing stock in Addis Ababa continued to be characterized by high rates of
rental housing. By the mid-1980s, rental housing accounted for 60 per cent of the
total housing stock in Addis Ababa. The low rental rates resulted in little to no
investment in housing which led to a further deterioration of housing quality. The
housing conditions were poorest in the center of Addis Ababa.

The construction of 139,000 houses is currently underway in various parts of the

city, according to the city administration. The dominant player in housing is the
state, manifested through its various arms such as regional governments, districts,
and kebeles. The state controls the majority of the rental accommodation and
influences the supply of new housing through active involvement in material
production and importation, land supply, and housing finance.

A limited number of private housing developers exist, compared to other nations.

The private construction industry is very small and it is complicated and time
consuming to start a company, register it, and conduct business. Those that do
exist operate only for high-income groups, as there is little incentive to construct
low-income housing.
Since the late 1970s housing cooperatives have also provided an avenue for home
ownership. This delivery method was established in 1978, through Proclamation
No. 138. The approach is for citizens to organize themselves into small groups
(between 10 and 20 people), register as a cooperative group for land allocation,

25
develop savings capacity, prepare settlement plans, receive land and secure tenure,
and largely build their housing themselves incrementally. Cooperatives have
received varying levels of government support over the last 40 years. Data on the
national stock of informal housing units is not available; although Addis Ababa in
the year 2000 had an estimated 60,000 informal ‘squatter’ units representing 20 per
cent of the city’s housing stock.

In terms of tenure, private house ownership levels are low. In Addis Ababa only 30
per cent of houses are owner occupied. Rental housing is the dominant tenure
mode. In Addis Ababa, in the 1994 census 57.3 per cent of the housing stock was
government-rental, either through local municipalities, or the National Agency for
Administration of Rental Housing.

The government estimates that the current housing deficit is between 900,000 and
1,000,000 units in urban areas, and that only 30 per cent of the current housing
stock is in a fair condition, with the remaining 70 per cent in need of total
replacement. In Addis Ababa alone, 300,000 units are required to meet the deficit.
The housing deficit is set to increase concurrently with the foreseen high
population and urbanization growth.

Between 1983 and 2007, Ethiopia’s population more than doubled, from 33.5
million to 81.2 million, and it is projected to more than double again by 2050 to
reach 170.2 million. To accommodate future growth, the city requires a total of
over 2 million units, which equates to a considerable 225,000 houses per annum.

There is massive demand for serviced, healthy, affordable housing. This demand
stems from both the current housing deficit and the poor quality of the existing
kebele housing stock that is beyond repair. However, there is low effective
demand. Effective demand is based on the ability and willingness to pay for
housing, affected by income and what households are prepared to pay. Although
effective demand is difficult to determine because it requires reliable data on
income levels and expenditure patterns of households, their savings capacity and
prioritization of housing vis-à-vis other forms of investment, it is the case that the
26
majority of Ethiopians cannot pay for formal housing supplied by the private
market. Therefore, the greatest need is for affordable housing

Lack of sufficient and affordable housing is one of the major problems in Addis
Ababa as well as in other cities and towns across the country. Even though there is
an increase in the supply of housing by both the government agencies and private
real estate developers, there is still a huge gap between housing needs and supply
in Addis Ababa. In 2002, the number of housing units available in Addis Ababa
was about 60% of the total requirements and had a backlog of 230,000 housing
units. In 2015, the housing needs reached about 2,250,831 units, which equated to
a demand of 225,000 new housings per annum.

It is widely recognized that provisions of affordable housing for the increasing

population in Addis Ababa has been a challenge for over many years. Given the
acute housing shortage, the limited financial capacity of urban dwellers and the
scarce governmental resources in fulfilling the public demand posed a challenge to
policy makers and professionals in the housing sector. The problem is further
aggravated by many factors that include unemployment, increase in living and
material costs that require continuous effort by all stakeholders. In addition, it is
worth noting that affordability is a relative term, which is influenced by the built-
up area and site location. Therefore, there is a need for research based innovative
approach that identifies the challenges and proposes effective actions. It is widely
understood that housing affordability is affected mainly by two distinct variables;
capital and occupation variables. Capital variable is associated with costs in
purchasing a house from the market and the ability to finance purchase, whereas
occupation variables are associated with costs in maintaining the house.
Occupation variable comprises the ability to carry the costs related with land lease
and rates, service costs, building maintenance, loan repayment and interest rates.
Though, private real estate development is one of the housing sectors engaged in
providing housing for the dwellers in Addis Ababa, it was reported that the
beneficiaries of the effort are mainly few high-income groups. A study made in
2011, showed that 80% of the city population are categorized under the low

27
income group. The study further indicated that among 125 registered private
residential real estate developers, 83.3%of them targeted high income while only
16.7% respond to the middle-income groups.

Based on the 2015 Ministry of Urban Development and Housing (MOUDH) data,
the formal and informal sector of housing supply accounts for 69.8% and 30.2%,
respectively. Within the formal sector; housing supply by the real estate developers
was only 0.4% while 49.6% and 19.8% were supplied by the government and
individuals (cooperatives and lease), respectively.

Based on international experiences, real estate developments are usually financed

mainly by bank loans, client‘s advance payment and own equities. However, based
on the interviews made in five (one public and four private) banks, it was learned
that bank loan for private real estate‘s accounts for only 1% of the bank‘s business.
The study further revealed that, the sources of finance for real estate developers are
0- 1% from financers, 75% from client-installed payments and 24% from their own
equity/savings.

The UN-Habitat publication on 2011 about “Affordable Land and Housing in

Africa” put Ethiopia as a prominent example for the challenge of insufficient
affordable urban land and housing provision to accommodate thousands of new
urban dwellers who move to cities in search of the greater opportunities cities can
provide.

28
 3. Environmental and Economic Analysis

Addis Ababa has a rapid development of economic and residential activities, so it

requires acceleration in the fulfillment of urban infrastructure and facilities. This
apartment proposal is considered on the basis of the importance of increasing
housing capacity that can be offered to the community in the form of vertical
housing, especially those in the middle of the city center. Arrangement of land
functions and building functions that follow the rules of spatial layout in the city of
Addis Ababa will be considered with a sustainable development manner, namely
by balancing economic, sociocultural and ecological aspects.

The Environmental and economic impacts of this project can be seen in various
angles:-
 The project implementation shall have a positive impact on foreign currency
earnings of the country by enhancing the business activity within the manner of
environmentally friendly.
 It will create employment opportunity for over 40 workers.
 Over 60% of the positions in the organization can be held with ladies which are
economically deprived part of the community.
 The only ecological hazard which could emanate from the implementation of this
project is the organic and inorganic wastes from various service and facilities of
this building. To alleviate this problem, the kitchens of the café and restaurant
shall be fitted with waste grinder and the septic tanks shall have gravity separator
to segregate the inorganic wastes from the organic ones. The organic waste shall
be disposed through waste trucks and the inorganic waste shall be collected and
disposed according to the instructions to be obtained from expert and professional
firms and requirements set by Environmental Protection and Preservation
Authority of the Country.

29
 4. Action Plan of this Project

The process of real estate development is highly variable and project-dependent.

Nonetheless, it can be divided into several phases, bearing in mind that these are only
general patterns. These basic steps apply to development of single-family housing, office
buildings, shopping centers and other private sector projects that are the subject of this
report. In the planning and initiation phase, the development team is assembled, major
hurdles are identified and overall project objectives are assessed. Next, the feasibility of
the project is considered through an assessment of market conditions, local and regional
governmental objectives, availability and cost of financing, and potential project sites.
Typically, land will be optioned by the end of this phase at the latest. The commitment
phase of the development process involves land assembly, preparation and negotiation of
environmental documents, assembly of materials needed for other regulatory approvals,
preparation of documents needed for financing, and finalizing the design of the project.
This phase culminates when the developer obtains the needed financing and regulatory
approvals. The developer then moves on to construction and operation of the project.
Real estate development is a complex undertaking and economic analysis of the effects of
environmental regulation must reflect some basic features of this process. Some of these
realities include the following: Development is subject to multiple, uncoordinated
regulatory processes. Federal regulation can be a “signal” that increases the cost of other
regulation.
There are numerous physical constraints on site selection. Development is sequential in
space and with regard to the regulatory “queue”. Project delays can be very costly to
developers, consumers and others. Development process requires sufficient financial and
human capital. Each of these factors in turn will be addressed further and with an
emphasis on how they affect economic analysis of environmental regulation.

30
 Table 4.1:- Action Plan of the Project
The Doer Time Cost Break
Activities to be down
No of schedule Remark
performed Birr Cent
the Action
Paying 20% of advance 32000 Birr
By different
1 payment for 253m2 of Jan 15,2023 1,619,200 - per meter
experts
land of lease holding square

Preparation of designs May,11-July

2 Design team 500,000 -
for this Study Area 30/ 2023
Preparing site lay out for
3 Surveyor Nov 15, 2023 186,000 -
construction
Buying the necessary Purchaser/ Nov, 20-30
4 49,042,482 -
construction materials owner /2023
Construction the entire December
5 Building Contractor 1,2023- 72,903,728 -
Decem 1,2025
Site and compound Consultant& Dec 5-
6 5,216,217 -
construction work Contractor 18/2025
Site Supervision and Decem-20-
7 Contractor 938,215 -
Delivery 23/2025
Provision of furniture
December 24-
8 and starting giving Owners 28,614,315 -
28/2025
service & facilities
Total - - 159,020,157 -

15% Contingency - - 23,853,023 55

Grand Total - - 182,873,180 55

The entire life span of the project is about two years and half. This could be done when
consistence of time frame would be kept. The total project cost is 159,020,157 birr.
However, when 15% of this project which is birr 23,853,023.55 contingency will be

31
included the grand total project cost will be 182,873,180.55 Birr. In general, this
includesthe cost of equipment, furniture and construction cost of the buildings.

32
5. SWOT Analysis
1. Strength
 Greatest initiation of the owners for development process
 Having knowledge, experience and skill of the firm how to begin and
finish a construction of a building.
 The existence of ample space for construction; or to build appropriate
building as per the Structural Plan of the City.
 Having well developed foreign and local business experience of the
developers to execute this project.
2. Weakness
 Rising of diversified and un common ideas among different actors from
the group of developers.
 There might be interruption of commitment in achieving the final desired
goal.

3. Opportunity
 The incentives and support of government for developers.
 Government policies and strategies of higher concern for urban
development.
 The location of the Study Area.

4. Threat
 Long and clumsy bureaucratic procedure in appealing land delivery
and construction permit.
 Day to day increment of construction material cost.

33
6. Conclusions & Recommendations
6.1. Conclusions

Gozamin Trading PLC is working in printing service for the last five years. It is
established by the year 2018. Gozamin Trading PLC is playing tremendous role in the
printing service. It has produced different types of printing outputs, such as agendas of
different institutions, magazines, bulletins and other legal documents. Gozamin Trading
PLC’s currently operational building is found in the busiest corridor of the City which is
locally known as Gojam Berenda Area via to Mercato Area, in Arada Sub City. The
requested plot is found at the current office compound of Gozamin Trading PLC. In
addition, there is under developed land which is currently left idle and the developer
would like to request the mayor office to negotiate a lease holding for about 253 meter
square of land. The owners of this project are planned to develop a mixed use (mainly
apartment) complex that will not only enhance the area, aligning it with the current
development of the city; but as well as create an employment opportunity for youth in
this neighborhood.

Gozamin Trading PLC will develop an apartment complex that would be comparable to
the existing buildings of this locality in order to create convenient and habitable areas that
will be compatible with the current development of the City – Mega Projects and other
development schemes.

The planned project is found to be financially profitable; and the problem of market will
not be reflected based on the prevailing demand of residential apartment in the City. The
total initial investment cost will be 182,873,180.55 Birr; out of this 30% or birr
54,861,954.165 will be covered from owner of this project and the rest 70% birr
128,011,226.385 is covered from a bank loan.

This residential apartment project will be conducted at mixed commerce land use
category which has been provoked with new approach of Urban Planning. It is assumed
that mixed use development could make certain location more vibrant since one service

34
turned off the other would be active. Furthermore, mixed development has contributed a
lot in reducing mobility since all services have clustered each other to the nearest
proximity.

The existing land use of the study area is mainly for mixed use and residential purpose;
and majority of the area is allotted for similar function. However, there is a tremendous
improvement and up grading by the new proposed site layout plan.

The slope condition of the Study Area is favorable for construction purpose. The Study
Area has slope variation of 9-15% at the site level and 10-19% at the locality level
respectively.

The entire life span of the project is about two years and half. This could be done when
consistence of time frame would be kept. The total project cost is 159,020,157 birr.
However, when 15% of this project which is birr 23,853,023.55 contingency will be
included the grand total project cost will be 182,873,180.55 Birr. In general, this includes
the cost of equipment, furniture and construction cost of the buildings.

6.2. Recommendation

The major constraints and problems that need to be addressed in housing problem is the
housing and services backlog, and the rapid growth in housing demand represent
enormous ask for future housing policy. However, new policy is expected and procedures
are being developed and the problems associated with the rules are being addressed.
Because of the mutually reinforcing or potentially destructive relationship between the
housing process and the local government process, a high level of policy-coordination
will be essential between the relevant national and Municipal Departments.
Coupled to the scale of the problem there are other key constraints that need to be
addressed:
 Geographic disparities
Large disparities in housing conditions exist between the center and expansion areas
 Land and Planning Issues

35
The historical and existing patterns of land use and allocation, as well as the legislative
framework associated with land, provide a huge challenge and constraint. A wholly new
approach to land use and planning is required, impacting both on the professions and the
communities. The town’s extremely wasteful approach to land will have to change,
allowing for higher densities and innovation in its use. Land identification: previous
zoning practices, reluctance of certain authorities to accept responsibility for low-income
housing, resistance of many existing communities and various administrative constraints
have impeded the identification of sufficient, suitable land for low-income housing.
 Land planning
Former planning legislation and approaches are burdensome, inappropriate in the town’s
context and resource-intensive utilization.
 Construction material
Significant potential bottlenecks exist in certain sub-sectors of the construction and
building materials supply industries: the lack of basic and managerial skills and building
material production and supply constraints.
 Time Inefficiency
In our case too much eagerness and starting construction of many houses at a time has
resulted in labor price escalation, material shortage and delay of construction period.
No project in the history of IHDP has been finalized with the speculated project time
and cost.
It is understandable that the situation has increased the supply of rooms in city.
Considering the long stagnated room supply condition a decade earlier the rate in which
rooms are coming to market has already changed the land escape for those operating in
the sector & as the result the sector has become more and more competitive. However, a
number of questions with regard to the hospitality sector are not fully answered yet.
Question like, is the current market situation inviting to attract new players in the sector?
What is the middle & long term expected market outlook for the industry?

Moreover, the promoters of this project Gozamin Trading PLC has planned to construct
10 three bed room residential apartments which has 150 meter square of total width.
Construction of residential apartment building has a greatest endeavor in serving as
advertising country’s good side profiles, generating business and providing a remarkable
36
chance of job creation and in solving residence problem in general. Nowadays a lot of
investors and developers engage in this sector with great interest at different part of the
country.

Furthermore, the above idea can be proved through physical observation every corners of
the City. However, certain limitations and ways of operations are still hinders this sector.
For instance, high cost of cement, high cost of bar, high trend of smuggling of land over
this sector, the rent seekers wrong interest have disturbed trade sector. Nevertheless,
government’s interest and commitment for the development of this type of investment is
considered as good value for the prolonging of the real estate development sector. More
over; to achieve maximum values of this sector, the following ideas have been
recommended:-

i. Facilitate loan and support based on the legal procedure

ii. Motivate investors to engage this sector by providing simple taxation system
iii. Confirm transparency and accountability operation system in this sector.
iv. Avoid bureaucratic procedure in land delivery system for this sector developer.
v. There should be a developed awareness creation mobilization by majority of the
public to foster the improvement of this sector.
vi. Every sector bureau should provide the necessary service and facilities to speed
up the development of the project.

37