The Ethiopian government has approved a new proclamation introducing tighter controls over housing rent increases across the country.
The legislation passed today in parliament with a majority vote, with three abstentions. Only 244 MPs were present for the vote, meeting the minimum requirement but lower than normal attendance.
Under the new law, landlords will have to use price references of relevant authorities before raising rents on tenants. The goal is to regulate rental prices and prevent sudden hikes, according to Tesfaye Blijige, the government whip.
The new rental housing proclamation mandates that regulatory authorities oversee the rental process and develop guidelines for permissible rent increases.
By July 7th, the authorities will introduce standardized guidelines that both landlords and tenants must consider when negotiating changes to rent amounts.
Specifically, landlords will be required to refer to these guidelines when determining how much to raise rents for existing tenants.
"Unjust increases in rent have fueled inflation, so government intervention is needed," Tesfaye told parliament.
The six-part, 32-article proclamation lays out rules for rent contracts, termination conditions and complaint procedures.
"It aims to make the market more transparent with landlord approval required for any rent increases," Tesfaye said.
Housing affordability has deteriorated in Addis Ababa and other major Ethiopian cities due to an imbalance between rapidly growing housing demand and a more constrained supply.
Over the last decade, demand for rental housing has surged significantly, leading to sharp increases in rent prices across the market.
In response, from 2020 onwards, the Addis Ababa municipal government instituted temporary freezes on rent increases by landlords at different points in time in an effort to stabilize costs for tenants.
The approved proclamation is the first action of its kind to be implemented by the federal administration, with now regions and city administrations, including Addis Ababa and Dire Dawa, expected to implement it.
The new proclamation imposed penalties on violators. Those who breach the proclamation or upcoming regulations and directives may receive an administrative fine of up to three months' rent.
Additionally, criminal charges cannot result solely from contravening the proclamation. The aim is to achieve compliance through financial consequences, rather than criminal prosecution.
