Addis Ababa Rent Adjustment Draws Questions Over Contract-Based Increase

June 29, 2026
By Mintesinot Nigussie

The new annual rent adjustment framework introduced by the Addis Ababa City Administration has triggered discussions among landlords, tenants and city officials, with authorities saying the 11.5 percent increase was calculated based on legally registered rental agreements rather than informal arrangements.

The city’s Housing Development and Administration Bureau said the adjustment was applied to the rental prices stated in existing contracts, even in cases where the agreed amount did not fully reflect the current condition or value of a property.

“Even when the rental price written in some contracts does not match the actual house condition, we recognised the agreement as a legal document and applied the increase based on it,” said Kidist Woldemichael, head of the bureau, during a discussion with representatives of landlords and tenants.

She added that the increase was not calculated from unofficial agreements between parties. “The 11.5 percent increase was applied to what is written in the contract, not what was hidden outside it,” she said.

The rent pricing study presented by the city considered several factors, including inflation, location, house size and distance from major roads, according to Nurahmed Andargie, a researcher at the Addis Ababa Leadership Academy who participated in the assessment.

He said the rapid growth of the city’s population has contributed to a mismatch between housing demand and supply, making rent regulation increasingly necessary. The study also found that, before a standard system was introduced, 28 percent of landlords had been adjusting rental prices periodically without a consistent framework.

The researcher said uncontrolled rent increases could push many residents out of their homes, creating pressure for government intervention. Internationally, housing expenses are often considered affordable when they account for about 30 percent of household income, but the study indicated that in Ethiopia rental costs currently consume between 50 percent and 80 percent of income for many households.

The discussion on the new rental pricing system also highlighted concerns from participants over whether the increase would create additional pressure on tenants. Some representatives questioned why the same percentage adjustment was applied across different areas of the capital despite differences between central districts and expansion areas.

A participant from Arada Sub-city said both landlords and tenants contribute to challenges in the rental market and called for a shared understanding between the two sides.

Another participant from Kolfe Keranio Sub-city raised concerns about unclear practices among both landlords and tenants, saying transparency would be necessary to establish a fair payment system.

Responding to the concerns, the bureau said the adjustment was based on the contract value used as a starting point for the study rather than a new market-based pricing model. Kidist said the city did not apply different increases for central and peripheral areas because the study focused on existing contract values.

“If someone rented a house in an expansion area or in the city centre based on a certain agreement, the adjustment follows that agreement. The study did not introduce a separate increase for the city centre and expansion areas,” she said.

The official said the administration considered the 11.5 percent increase manageable for tenants compared with other possible adjustments. She added that applying broader studies without local adjustments could have resulted in a higher increase.

The annual rental price adjustment will take effect from July 07. More than 50,000 rental houses in Addis Ababa have reportedly been registered and entered into a digital system as part of efforts to improve monitoring of the rental market.

Source: FSX Business News