Ephrem Aklilu
As an Ethiopian invested in my country’s development, I have watched the growing influence of real estate in our national vision with mixed emotions. On one hand, I recognize that our Ten-Year Perspective Development Plan (2021–2030) aims high: to achieve lower-middle-income status by 2030, with a gross national income per capita target between $1,136 and $4,465. On paper, real estate is poised to be a key pillar in reaching that goal. Projections estimate the sector’s value at $1.33 trillion by 2025, with a compound annual growth rate of 6.2%. It’s a sector drawing significant investment, supported by urbanization, population growth, and major infrastructure projects.
But while this growth is celebrated in official narratives, I see another side of the story—one that is far more concerning. I see displacement, rising inequality, exclusion of the poor, and a creeping sense of mistrust among communities, especially in urban areas like Addis Ababa. These issues are not isolated. They are structural. And unless they are addressed with seriousness and political courage, I believe real estate development could become more divisive than unifying.
Growth Without Inclusion
In cities across Ethiopia, housing prices have skyrocketed. In Addis Ababa, prices per square meter have tripled in the last two years, reaching around $1,680. That’s over 15 million ETB for a modest apartment. How can we expect ordinary citizens—especially the 80% of our population living on less than a dollar a day—to afford such homes? They can’t. Many are being left behind entirely.
The government’s housing lottery system, while well-intentioned, delivers about 32,000 units annually. But that’s a drop in the ocean compared to the 1.2 million-unit deficit we face in Addis Ababa alone. Over 900,000 people remain on waiting lists. Others have simply given up hope. And even when housing is available, access to mortgage financing is out of reach for most. Only 23% of Ethiopian homes are mortgage-financed. The rest rely on informal family networks or savings schemes. Compare that to Kenya, where 40% of homes are financed through mortgages, and we begin to see how limited our housing system truly is.
I admire how other African nations have found ways to make housing more inclusive. Kenya’s micro-mortgages and Ghana’s REITs have opened pathways to ownership for the poor. Rwanda has integrated affordable housing into broader city planning. Ethiopia must follow suit. Otherwise, the benefits of growth will stay locked at the top.
Displacement: The Hidden Cost of Development
What worries me deeply is not just that poor Ethiopians are priced out—it’s that many are being pushed out. I have seen firsthand how new real estate projects in Addis Ababa and towns surrounding the capital have led to the displacement of long-settled communities. In the name of urban renewal and investment, families are relocated to the outskirts—places often lacking water, electricity, proper roads, or schools.
These communities are left disconnected—not just geographically, but socially and economically. They face longer commutes, higher expenses, and fewer opportunities. I find this especially painful when I think of elders who have lived their entire lives in neighborhoods now flattened for luxury towers. Or young people who must give up on schooling because their new home is two hours away by bus.
Rwanda’s urban model offers an important lesson. In Kigali, affordable housing and infrastructure go hand in hand. Ethiopia must adopt that kind of integrated vision if we want development that doesn’t trample the most vulnerable.
The Unspoken Tension: Ethnic Displacement and Unequal Power
There is another dimension to this story that we must speak about honestly, however uncomfortable it may be: the growing fear that real estate development is also reinforcing ethnic displacement and favoritism, particularly in and around Addis Ababa.
Many Ethiopians I speak with—especially non-Oromo urban residents—express concern that Oromo elites are being systematically favored in land allocation, housing distribution, and urban planning decisions. Whether through regional administrative control or informal political networks, the perception is that Addis Ababa is slowly being reshaped to reflect the interests of one group at the expense of others.
I have seen this fear intensify in areas like Legetafo, Sebeta, and Sululta, where long-standing communities—some Amhara, some Gurage, some mixed—have been forced off their land with minimal compensation. The land is then handed over to developers with political connections. Families displaced in this way often describe the experience as not just economic loss, but cultural erasure. It is creating bitterness and a sense of betrayal.
To be clear: this is not an argument against Oromo rights or development anywhere. But if we allow ethnicity to dictate urban policy—if land and housing are weaponized to reshape demography—then we are setting ourselves on a dangerous path. We need fairness, transparency, and national oversight that transcends ethnic loyalties. A multi-ethnic, citizen-centered approach must guide our future.
Financing and Policy Gaps
The financial side of the housing crisis is equally daunting. Most poor families don’t have access to banks or mortgage services. They’re excluded not because they lack the desire to own a home—but because our systems were never built for them. Even the digital systems meant to improve tax collection or loan applications are out of reach for many who lack connectivity, digital literacy, or identification.
In contrast, Kenya has embraced mobile-based lending and microfinance in ways that empower informal workers and youth. Ethiopia needs to open new channels—small-scale REITs, housing cooperatives, or mobile mortgage platforms—to ensure everyone has a stake in urban development.
On top of this, bureaucracy, mismanagement, and corruption continue to slow progress. The 2024 Real Estate Proclamation, though promising, has created more paperwork than practical change. Small developers are stuck in red tape. Government projects fall behind schedule. And when corruption scandals surface—often involving undelivered homes or land scams—public trust erodes even further.
Where Do We Go From Here?
I believe that Ethiopia still has a choice. We can follow the path of inclusive, transparent development—or allow real estate to become a vehicle for division and elite consolidation.
If I were advising our leaders, I would recommend the following:
1. Expand Public-Private Partnerships (PPPs): Like Kenya, we should bring in private capital to scale affordable housing beyond what the state can deliver alone.
2. Ensure Integrated Urban Planning: We need planning models that consider not just buildings, but communities—transport, water, schools, and livelihoods.
3. Introduce Accessible Financing Tools: Launching mobile micro-mortgages or small REITs could democratize homeownership.
4. Create a National Housing Equity Commission: This independent body should oversee land allocation in cities like Addis Ababa, ensuring that ethnicity does not become a hidden driver of urban policy.
5. Increase Pro-Poor Budget Allocation: Let 20% of our national tax revenue go toward health, education, housing, and safety nets. This is not charity—it is nation-building.
6. Protect Urban Communities from Forced Displacement: Compensation, relocation support, and participatory planning must be the minimum standard whenever development takes place.
A Call for Ethical Development
Real estate in Ethiopia has the potential to lift millions—but only if we are honest about the exclusions and imbalances it currently perpetuates. As someone who believes in this country, I want to see development that uplifts everyone—not just the wealthy, not just those in power, and certainly not just one ethnic group.
If we choose inclusivity, transparency, and justice, we can build cities that reflect the dignity and diversity of all Ethiopians. But if we stay silent while displacement, favoritism, and inequality deepen, then we risk losing not only our cities—but the social fabric that holds our country together.
The future of Ethiopia’s urban development is not just an economic issue. It is a moral one. And it demands our full attention, now.
Editor’s Note : Views in the article do not necessarily reflect the views of borkena.com
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