condominium housing in ethiopia - International Union of Tenants

Through the firm’s involvement in the programme,they have trained and certified 13 consultants on costefficientconstruction so far, and have contributed to thejury that decides on the designs for new condominiumsites across the country, following government-releasedcompetitions. Mr. Haile, Managing Director of theMH Engineering, is on the Board of Directors for theIHDP, which has been set-up to discuss the design,cost, monitoring, construction, finance, technology,administration, and allocation of new condominiumprojects. The board is composed of 11 members and ischaired by the Mayor of Addis Ababa.Commercial Bank of Ethiopia (CBE)The Commercial Bank of Ethiopia is a governmentownedbank, whose mandate is to provide financefor commercial purposes. In 2006, facilitated bythe MWUD, the CBE agreed in Memorandums ofUnderstanding with the five involved regional statesand the city of Dire Dawa to purchase bonds in orderto enable the regions to finance the implementation ofthe IHDP. The city of Addis Ababa, after exclusivelyusing the cities own budget during the first years, alsostarted selling bonds to the CBE to finance all factors ofthe programme, including construction costs. The Bankprovides funding for the total cost of the programme’simplementation in Addis Ababa and in the regions, andnot on a site-by-site basis.The Bank has also come to an agreement with theHDPO to provide a loan-service to all condominiumbeneficiaries, whereby the Bank pays 80 per cent of theunit price on behalf of the beneficiary at the handoverof the property (the beneficiaries pay the 20 per centdown payment themselves) and the families enter into aloan-agreement with the CBE to pay back this amountsubject to interest.The Bank benefits from the programme by receivinga significant influx of clients without the needfor advertising and, as only a small percentage ofcondominium beneficiaries (approximately 5 to 10per cent) are able to pay the full 100 per cent of theirpayment at handover, the remaining enter into loanagreements with the bank.As a result of this collaboration, the Bank has accumulated36,933 new customers in Addis Ababa alone, and hashanded out the total loan sum of ETB 1.7 billion (USD130 million) which is charged at an annual interest rateof 8.5 per cent interest rate. The Bank has also providedloans to approximately 4,535 customers in the regionalstates, but has chosen not to continue their support inthese regions in the future as demand is too low.2.2.2 Legal frameworksWhile the following list is not exhaustive, the key lawsrelating to the IHDP are:Proclamation No. 172/2002 pertains to the lease holdingof urban land, with all land in public ownership.Proclamation No. 272/2003 stipulates that land isprovided free of lease charge for low-cost housingdevelopments.Proclamation No. 370/2003, The Federal CondominiumProclamation, pertains to condominium housing. Itdefines condominium as “a building for residential orother purpose with five or more separately owned unitsand common elements, in a high rise or in a row ofhouses, and includes the land holding of the building” 1 .Proclamation No. 19/2005 deals with beneficiaryeligibility criteria and selection and penalties for noncompliance2 .Proclamation No. 455/2005 affirmed the basis andamounts of compensation for displacement and landexpropriation. 90 days notice period must be given;compensation is to be paid at market value; relocationcosts incurred must be met; and rental and ownershipoptions must be provided at fair prices, in the same ornearby location.Proclamation (number unknown) allowed theimportation of cement as the lack of locally availablecement caused major construction delays forcondominium projects.Regulation No. 15/2004 outlines the establishment of theAddis Ababa City Government Housing DevelopmentProject office and outlines its duties and responsibilities.Regulation No. 12/2004 outlines the condominiumregulations for Addis Ababa city, regulating furtherdetails to Proclamation No. 370/2003.2.2.3 Programme FinanceGovernment financeThe Integrated Housing Development Programme isentirely financed by public resources. The programmewas originally funded by the city government’s ownaccount. After three years, however, it became necessaryto consider a new strategy. The new approach came in theCondominium Housing in ethiopia17