City administration increases baseline housing cooperative construction costs to 50,000 birr per square meter, sparking pushback and protests from civil servants
By Staff Writer
(Nairobi, Kenya) — The Addis Ababa City Administration’s Housing Development and Administration Bureau raised the baseline construction cost for government employees’ housing cooperatives from 35,000 birr to 50,000 birr per square meter, according to an official letter reviewed by Borkena.
The directive, signed by Bureau Deputy Head Dr. Mekonen Tsebte Chikol, retroactively adjusts initial December 2024 pricing estimates following an updated municipal rate schedule released in September 2026. The price revision affects thousands of public school teachers and healthcare workers who had previously secured municipal land grants under the city’s cooperative housing initiative.
Under the initial framework launched in Lemi Kura sub-city in February 2026, the city administration provided free land to 6,194 teachers organized into 57 distinct cooperatives. Members paid a 25 percent down payment based on the initial 35,000 birr rate, with bank loans arranged to cover the remaining 75 percent balance.
Teacher cooperative committees told Wazema that the sudden price hike exceeds their financial capacity. Many members financed their initial down payments through personal loans and family assistance, expecting fixed delivery costs upon completing the required deposit.
Following a recent cost study by Addis Ababa Science and Technology University indicating that regional building expenses have reached between 50,000 and 82,000 birr per square meter, several members requested full refunds. Cooperative representatives reported that individual members who were quoted upper-tier construction rates were verbally told during internal meetings that down payments are non-refundable.
In response to the adjusted rates, several cooperatives halted work at the foundation stage, while others refused to begin construction until municipal authorities finalize baseline costs. Cooperative leaders told Wazema they reject price increases that align with private real estate rates, warning that the policy risks derailing the entire civil service housing program.
Speaking to Wazema on condition of anonymity, a senior city administration official stated that the initial 35,000 birr rate represented a low baseline estimate rather than a fixed final cost. The official explained that while the city provides free land, design support, and loan facilitation, individual cooperatives remain responsible for actual construction expenditures dictated by market rates for raw materials and contractor fees.
Municipal authorities have not formally adopted the university’s upper-tier pricing study, the official added. Instead, the administration is reviewing quarterly building material indices to prevent contractor abandonment while attempting to keep final project costs manageable for public service employees.
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