Someone should study this: Addis housing edition

Attention development economists and any other researchers who have an interest in urban or housing policy in low-income countries:

My office in Addis has about 25 folks working in it, and we have a daily lunch pool where we pay in 400 birr a month (about 22 USD) to cover costs and all get to eat Ethiopian food for lunch every day. It’s been a great way to get to know my coworkers — my work is often more solitary: editing, writing, and analyzing data — and an even better way to learn about a whole variety of issues in Ethiopia.

addis construction

Addis construction site (though not probably not government condos)

The conversation is typically in Amharic and mine is quite limited, so I’m lucky if I can figure out the topic being discussed.  [I usually know if they’re talking about work because so many NGO-speak words aren’t translated, for example: “amharic amharic amharic Health Systems Strengthening amharic amharic…“] But folks will of course translate things as needed.  One observation is that certain topics affect their daily lives a lot, and thus come up over and over again at lunch.

One subject that has come up repeatedly is housing. Middle class folks in Addis Ababa feel the housing shortage very acutely. Based on our conversations it seems the major limitation is in getting credit to buy or build a house.

The biggest source of good housing so far has been government-constructed condominiums, for which you pay a certain (I’m not sure how much) percentage down and then make payments over the years. (The government will soon launch a new “40/60 scheme” to which many folks are looking forward, in which anyone who can make a 40% down payment on a house will get a government mortgage for the remaining 60%.)

When my coworkers first mentioned that the government will offer the next round of condominiums by a public lottery, my thought was “that will solve someone’s identification problem!” A large number of people — many thousands — have registered for the government lottery. I believe you have to meet a certain wealth or income threshold (i.e., be able to make the down payment), but after that condo eligibility will be determined randomly. I think that — especially if someone organizes the study prior to the lottery — this could yield very useful results on the impact of urban housing policy.

How (and how much) do individuals and families benefit from access to better housing? Are there changes in earnings, savings, investments? Health outcomes? Children’s health and educational outcomes? How does it affect political attitudes or other life choices? It could also be an opportunity to study migration between different neighborhoods, amongst many other things.

A Google Scholar search for Ethiopia housing lottery turns up several mentions, but (in my very quick read) no evaluations taking advantage of the randomization. (I can’t access this recent article in an engineering journal, but from the abstract assume that it’s talking about a different kind of evaluation.) So, someone have at it? It’s just not that often that large public policy schemes are randomized.

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  1. 1

    And here are a few news stories (of varying reliability, I imagine) re: previous transfers of condos:
    1) http://www.waltainfo.com/index.php?option=com_content&view=article&id=4731:administration-to-transfer-7300-condos-to-beneficiaries-tomorrow&catid=52:national-news&Itemid=291
    2) http://www.ethiopiainvestor.com/index.php?option=com_content&task=view&id=1318&Itemid=88
    3) http://addisababaonline.com/ethiopian-capital-to-build-90000-condos/
    (My understanding is that the most recent round of the lottery has been much delayed and hasn’t actually started yet, and may not for some time.)

  2. 2

    And by the last article, there are 340,000 folks waiting on 20k units — note that the article is from Feb 2012, and the reference to 2005 in the article is Ethiopian year 2005 (ie, 2012).

  3. 3

    So….why aren’t you doing this study?

  4. 4

    Alas, but I don’t have the necessary level of interest, the funding, the staff, the right background, or the time (since I need to go back and finish my Masters and all)…



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