Scenarios and Challenges of Formal Urban Land Acquisition for

Housing in Bahir Dar, Ethiopia

1
Adigeh, Dereje Tessema (Corresponding Author)

A Ph.D. Candidate at the Department of Urban and Regional Planning, College of Ethiopian
Institute of Architecture, Building Construction and City Development, Addis Ababa University,
Ethiopia
Email: dereje.tessema@eiabc.edu.et

2
BAbebe, Birhanu Girma (PhD)
Ph.D., Associate Professor and Institution Director for Undergraduate Academic Program at the
Department of Urban and Regional Planning, College of Ethiopian Institute of Architecture,
Building Construction and City Development, Addis Ababa University, Ethiopia
Email: birhanu.girma@eiabc.edu.et

Abstract

This article aims to examine the issues, scenarios, and challenges of getting land and the policy
implications of accessing land for residential use in Bahir Dar city. The authors examined the
modalities of urban land access and the principal challenges that constrained it, intending that
the municipal managers find the main issues to focus on. The study used a qualitative approach
under exploratory research design to achieve the intended goal. Data were received from twenty-
five key informant interviewees (government officials and experts from land and housing
departments both at municipality and sub-city levels). Accordingly, it is concluded that rapid
urbanization-led land demand and supply imbalances, high land prices, the inefficiency of the
land lease policy, and lack of good governance in the land administration sectors were the main
challenges and issues that hampered land acquisition for housing in Bahir Dar city. Auctions and
allotments are the only ways to get land in cities, but the poor can't afford to buy land at an
auction. Only housing cooperatives can get land through allotments. The study area is facing
multiple challenges in supplying adequate land for residential housing, and there is a lack of

1
empirical study on this critical issue to suggest possible remedies. Therefore, the paper intended
to contribute by filling this study gap.

KEYWORDS: Housing Challenges, Urban Land Acquisition, Urban Land Policy, Land Lease,
Urbanization

1. Introduction:

Today, In light of Ethiopia's low levels of development and poverty, land administration has
become a major source of concern. According to article 40 (3) of the Constitution, the right to
own rural and urban land, as well as all natural resources, belongs to the State and the people of
Ethiopia. Under sub-articles (4) and (5), the Constitution put that rural land for agriculture and
grazing should be possessed without any payment perpetually (FDRE constitution, 1995).
However, the Constitution said nothing about the tenure system of urban land, particularly for
housing development.

Apparently, to fill the gap, Ethiopia introduced the lease system as the only way to hold urban
land in 1993, before the FDRE constitution. Ethiopia implemented the leasing system as the
exclusive method of urban property ownership in 1993 (Proclamation No 80/1993). Accordingly,
the lease system is criticized as having no constitutional basis since it was adopted before
adoption of the Constitution (the supreme law) and because the Constitution does not pertain to
urban land holding system (Arjjumend and Seid, 2018; Adam, 2019). Thus, this proclamation,
and subsequent lease proclamations, lack constitutional support.

This decree was repealed in 2002 (Proc. 272/2002) (Arjjumend and Seid, 2018) and was again
replaced in October 2011 by the current proclamation (Proc. 721/2011). Lease periods range from
15 to 99 years based on land use types; the highest lease period is given for residential and social
service land uses, while urban agriculture land use is the shortest lease period. It requires payment
of the negotiated lease total bid to the relevant government within the time-frame indicated in the
lease contract by the municipal government. Prior to the implementation of the urban land lease
Proc. 721/2011, there were five distinct options for obtaining urban land: auction, negotiation,
assignment, award, and lot purchase (Takele, 2018).

Due to the fact that the majority of them are classified as corrupt activities, the new legislation
recognizes only tender (auction) and allotment (land lease transfer without auction) as the two
2
primary modes of government-to-citizen lease transfer (Article 6 of Proc. 721/2011). The federal
Constitution vests city governments and municipalities with authority over urban land under their
administrative territory. However, there is no standardized framework for land administration in
metropolitan areas. Without standard procedures and a legal framework, land delivery systems are
bureaucratic, opaque and exclusive, dishonest and irresponsible toward land demanders, impeding
the efficient use of urban land and delivery systems, which results in illegal procedures, land
speculation, informal land access, inadequate infrastructure provision, and insufficient revenue
collection (Alem, 2021; Arjjumend and Seid, 2018).

Several salient problems with the current urban land allocation system have been identified in the
contemporary Ethiopian urban land lease literature. In his report Chi ‐man Hui (2004), for
example, identifies some of the bottlenecks in the existing lease system, such as those related to
evaluating, registering, transferring, and compensating payment; Teklemariam and Cochrane
(2021) have addressed the issue of land use rights in Ethiopia using sustainable development and
social justice as guiding principles. Despite this focus, their work dealt with rural land
transactions in general, as well as rural land leases specifically. On the other side, according to
Takele (2018), Agyemang and Morrison (2018) and Adam (2019), one of the most critical issues
with the existing system of urban land leases is the lack of effective implementation, while they
parenthetically indicated that the lease system is formulated in a way to ensure the benefit of the
government and the rich.

In Ethiopia, the trend of housing demand has become alarming when compared to the supply side.
Such an unbalanced urban population in relation to housing stock and other basic infrastructures
is among the critical issues that could absorb the attention of researchers. People in Ethiopia's
cities are expected to triple in size from 15.2 million in 2012 to 42.3 million in 2037, rising at an
average rate of 4.1% each year (CSA, 2013). Therefore, more studies shall be there to look at the
challenges of getting land for residential housing at the household level, as well as the policy
implications of this important part of human settlement. In the case area, Bahir Dar City, urban
populations are growing at a high rate that demands huge services and infrastructures, of which
land plots for housing are crucial.

The municipalities are facing multiple challenges in supplying adequate land for residential
housing development, especially for those who are in the low-income earning class of society,
3
though they are engaged in transferring residential plots to housing cooperatives. Therefore, it is
believed that assessing the challenges to access land for housing in urban areas and policy issues
related to land access and housing in Amhara Regional State in general and Bahir Dar city in
particular, is important to gain a better understanding of the existing situation; suggest or
recommend possible remedies that reduce the challenges and issues related to access to land for
residential housing.

In light of this, this article had the purpose of looking into the issues, scenarios, and challenges of
getting land and the policy implications of accessing land for residential use in Bahir Dar city.
Hence, this study sought to address the following fundamental research questions; What does the
land access scenario for residential purposes in Bahir Dar seem like? Are there any bottlenecks in
accessing land for residential use in Bahir Dar?
2. Literature Review

Land is essential to the supply of housing in every community, which is a crucial component of
the property development process, and its purchase is necessary for the provision of efficient and
sustainable housing in metropolitan areas (Owoeye and Adedeji, 2015; Outule et al., 2018;
Arjjumend and Seid, 2018). It is necessary to note that giving access to land and enabling the
populace to make optimal use of it is essential to poverty reduction. Fanta and Megento (2020)
claimed that living on land not only provides us with all the food we need to survive but it also
enables us to achieve good social standing, economic security, and political power.

It is significant to realize that having unfettered land access is a strategy against poverty and
homelessness. With this in mind, it is essential to consider several factors when acquiring a
dwelling, such as land availability, affordability, and ease of transaction as well as security of
ownership (Adam, 2014; Gebremichael, 2017; Outule et al., 2018). It is claimed that a sufficient
supply of land is often seen as a prerequisite for a sustainable housing delivery system, given the
importance of land to the socioeconomic lives of individuals.

According to Arjjumend and Seid (2018), access to land for home building in urban regions of
several emerging Sub-Saharan African countries is getting more difficult with each passing day.
Africa and other regions of developing nations are experiencing unprecedented growth in the
urban population, which is increasing the demand for urban land at an unprecedented rate

4
(Arjjumend and Seid, 2018). When urbanization is handled appropriately, it can accommodate a
massive rise in urban population in relatively limited geographical areas (Keller and Mukudi-
Omwami, 2017).

Recent studies indicate that the world's population is overgrowing and is expected to stretch to
around 9 billion people by 2050 (UN-Habitat, 2016). As of 2015, urban regions accounted for
54% (4 billion) of the world's population. The urban population is predicted to continue growing
to the point where the world's population will become nearly one-third rural (34%) and two-thirds
urban (66%) by 2050, essentially reversing the worldwide rural-urban population split in the mid-
twentieth century (UN-Habitat, 2016). Africa's urban areas are increasingly becoming the future
home of the bulk of Africans. By the mid-2030s, it is predicted that 50% of Africans would live in
cities.

In the previous two decades, Africa's urban population has almost quadrupled, from 237 million
in 1995 to 472 million in 2015. Africa's urban population is projected to nearly double between
2015 and 2035. In the next decades, the population of Sub-Saharan Africa is expected to rise
quicker than that of any other region, from 823 million in 2010 to 1.9 billion in 2050 (UN-
Habitat, 2016). Ethiopia's urban population is anticipated to almost triple from 15.2 million in
2012 to 42.3 million in 2037, at a rate of 3.8 percent per year, according to official figures from
the Ethiopian Central Statistics Agency (CSA, 2013).

According to Arjjumend and Seid (2018) and UN-Habitat (2016), the land area occupied by cities
increases faster than the pace of urban population growth. Between 1990 and 2000, a worldwide
sample of 120 cities revealed that although the population increased by an average of 17%, the
built-up area increased by 28%. By 2030, it is expected that the urban population will double and
the urban area will quadruple in emerging nations (UN-Habitat, 2016; Arjjumend and Seid,
2018). In recognition of the inevitable growth in urban populations and the consequent need for
housing, developing countries attempted to address the issue by offering public or subsidized
housing, but their efforts were woefully insufficient to meet the demands for housing in their
cities (Chi‐man Hui, 2004; Irumba, 2015).

Given the unavoidability of urbanization and the limited resources available to governments, the
housing crisis can be resolved only if all interested people are able to build their own homes (Han

5
and Vu, 2008; Cheng et al., 2015; Cai and Wu, 2019). However, this potential has been highly
reliant on their ability to get housing land in the appropriate location and at the right price
(Takele, 2018). Authorized land rights are a vital prerequisite for providing adequate and
affordable housing for all. In contrast, inadequate access to land for housing causes rising living
costs, the spread of slums and informal settlements, environmental degradation, and increased
vulnerability for the urban poor, women-headed families, and other marginalized and
disadvantaged groups (UN-Habitat, 2011; Adam, 2019). In addition, the land is public property,
and a person may only enjoy the usage rights connected with land that they own.

Baye, Wegayehu and Mulugeta (2020) stated that the formal (legal) way of obtaining land plots
for house construction and investment reasons is liable on the efficiency with which leasing
policies are applied. In sub-Saharan Africa, the lack of economic and political power of low-
income earners makes it difficult for them to acquire land and housing in acceptable areas for
home development (UnHabitat, 2016; Irumba, 2015; Arjjumend and Seid, 2018). As a result, the
majority of urban people are compelled to stay in slums and squatter settlements with poor living
conditions, insecurity and restricted access to essential amenities that are harmful to human,
physical, and economic development.

3. Research Methods

3.1. Study Area Overview

The city of Bahir Dar is the capital of the Amhara National Regional State, Ethiopia. It is situated
northeast in Ethiopia, at 11° 38' N and 37° 15' E, 1790ms above sea level, and about 565
kilometers north-west of Addis Ababa. The city is notable for its broad, palm-tree-lined streets
and its level terrain. The United Nations, Education, Scientific, and Cultural Organization
(UNESCO) considers it to be one of the most attractive, well-planned, and secure cities in the
world. The city received the UNESCO cities for Peace Prize on March 18, 2002, in Marrakesh,
Morocco (Dawud, 2012).

Administratively, Bahir Dar is made up of six sub-cities: Atse Tewodros, Gishe Abaye, Belay
Zelke, Dagmawi Menelik, Tana and Fasilo. There are also three satellite towns: Zegie Town in the
north, Meshenti Town in the south-west, and Tis Abay Town in the south-east. The city is 563 km

6
north of Ethiopia's capital city, Addis Ababa, on the Addis Ababa-Debre Markos-Bure road,
which connects Addis Ababa to the city.

Fig 1. Location map of Bahir Dar City (Own prepared on February 12, 2022)

Current Housing Units And Anticipated Demand: the 1984 population and housing census
revealed that Bahir Dar has around 9206 housing units (HU) and 10,291 households (HH),
showing that 90% of the households have private dwellings units while approximately 10% have
not. After ten years, the 1994 census proved that there were 20,857 households, which was double
the number of 1984, and 19808 dwelling units in In Bahir Dar City, almost 95% of the households
had residential homes, while 5% of the households had not. Here, it is concluded that there was
apparent housing construction in the between decade. Assuming the same ratio persisted through
2005, it is anticipated that the number of dwelling units will reach 35,566, with 37,344
households. Considering the ratio would reach one to one in 2015, the number of housing units
(HU) would reach 61,570, and the number of households (HH) housed in these housing units
would also reach 61,570. In order to attain the desired one-to-one ratio, 26,004 dwelling units had
7
to be built in 10 years of planning (FUPI, 2006). Assuming that the same number of housing units
be developed each year, a minimum of 2,600 housing units must be built annually (Bahir Dar
Integrated Development Plan, 2006). However, the reality shows that there are 91,012 households
in Bahir Dar city, while the total residential stock is 39, 473 including private, public and condo
houses (Municipal Housing Department annual report, 2021). This shows a huge gap between
housing demand and supply, which applies pressure on urban land demand.

3.2. Research Methodology

The analysis of urban land access scenarios for housing in Bahir Dar city was done using a case
study methodology as an appropriate strategy. We gathered primary data as well as secondary
data from the target offices: Bahir Dar municipality office, Planning Office, Urban Land
Management Office, Cooperative Housing Office, and Housing Development and Management
offices.

Using a purposive sampling technique, departments directly related to the issues under study were
identified from these target municipal offices. As part of the case study method, a multi-
perspective analysis had to be conducted in order to find out more about the complex situations
being studied. This meant that different data collection methods and sources would have to be
used. Furthermore, the provision of urban land is a multi-sectoral activity that involves various
stakeholders and actors. In order to increase the credibility of the information collected, it was
triangulated from different sources on the same subject.

Interviews with experts and department heads continued until the required data reached a
saturation point. Two sets of semi-structured interviews were undertaken in total; the first set
included department heads from the study's designated offices. As a result, researchers gained a
deeper and more comprehensive understanding of urban land access scenarios and bottlenecks. In
the second round of interviews, experts from the selected departments were interviewed to
generate more detailed information and to provide an explanation of how urban land acquisition
for housing appears in the city.

To answer the main research question, experts and heads of departments were selected through
purposeful sampling. Respondents were selected based on the length of time they have worked in
their departments. Accordingly, respondents had a range of seven to fifteen years of work

8
experience. In some cases, researchers also selected respondents using snowball sampling and did
so based on recommendations from colleagues. Across the target offices, twenty-six key
informants were interviewed. We analyzed necessary paperwork, such as plans, policy
documents, rules, regulations, and legal processes, as well as strategy papers, monitoring and
evaluation reports, and financial and other yearly reports, in order to substantiate the conclusions
from the interviews and triangulate the findings.

4. Results and Discussion

4.1. Introduction

The Universal Declaration of Human Rights (UDHR), adopted by the UN General Assembly in
1948, declares that housing is a fundamental human right, ensuring access to a safe, secure,
habitable, and affordable home, and protection from forced eviction. According to Article 25 (1)
of the UDHR, it is the duty of the State to guarantee everyone's right to live in safety, peace, and
dignity, regardless of their wealth or financial resources. The Ethiopian Constitution, in Article
41(3), affirms that every citizen of Ethiopia has the right to equitable access to urban land for
housing and public social services.

However, the empirical situation in the country shows that there is a problem in ensuring the right
to equal access to resources, especially the land demand issue. In Ethiopian urban areas in general
and Bahir Dar city in particular, urban land acquisition and access to affordable housing have
become a highly sought-after commodity; landlessness is a big concern in the nation because of
its large and rapidly expanding population (it is now Africa's second most populated nation next
to Nigeria), on the one hand, and the lack of access to land equivalent to the urbanization demand
(Brightman, 2017; Teklemariam & Cochrane, 2021). Therefore, urban residents seek to acquire
land by purchasing peri-urban agricultural plots informally. Informal settlements are forming
because municipalities don't provide enough housing plots and can't enforce rules. The problem is
made worse by speculative farmers, brokers, and corrupt bureaucrats and administrators (Mersha,
Mulugeta, & Gebremariam, 2021).

4.2. The Land Access Scenario for Residential Purposes in Bahir Dar

Bahir Dar, located in the Amhara region of Ethiopia, is one of the rapidly growing cities in the
country. However, the city faces several challenges, including land access for residential
9
purposes. The land access scenario for residential purposes in Bahir Dar is quite complex, and
several factors contribute to this issue.

One of the primary challenges is the high demand for land due to population growth,
urbanization, and migration. The number of people seeking land for residential purposes far
exceeds the number of available land plots. This has led to an increase in land prices and housing
scarcity. Many people cannot afford to buy land at the prevailing market prices, and this has
resulted in an increase in the number of informal settlements in the city.

Another factor that affects land access for residential purposes in Bahir Dar is corruption in the
land sector. Corruption in land allocation, transfers, and administration has resulted in many
people being denied access to land, especially those from low-income backgrounds. Some
officials and intermediaries in the land sector engage in illegal activities such as extortion and
bribery, making it difficult for ordinary people to access land.

The lease policy in Bahir Dar is another challenge to accessing land for residential purposes. The
policy is skewed towards wealthy individuals, and the tender and allotment modalities limit
access to land for middle-income and low-income households. The lease policy has also failed to
adequately serve low-income groups, including government workers, who are entitled to access
land at benchmark prices through the creation of housing cooperatives. The inability to execute
this opportunity has resulted in the growing tendency of unlawful land acquisition in the city.

Moreover, the city's urban development plan has not been able to keep up with the pace of
urbanization, leading to the creation of unplanned settlements. These informal settlements are
often located in high-risk areas, such as flood-prone zones, putting the residents' lives and
properties at risk.

To address these challenges, the government and other stakeholders need to take several steps.
Firstly, the government needs to implement policies and measures that promote transparency and
accountability in the land sector to combat corruption. Secondly, there should be a review of the
lease policy to make it more inclusive and equitable. The government should also invest in the
creation of affordable housing and the provision of serviced land to low-income groups through
housing cooperatives.
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Furthermore, the city's urban development plan needs to be reviewed to cater to the growing
population's needs and avoid unplanned settlements. This includes the identification of
appropriate locations for housing development, provision of basic amenities, and the enforcement
of building codes and standards to ensure safe and sustainable housing.

In conclusion, the land access scenario for residential purposes in Bahir Dar is complex, with
several factors contributing to the issue. Corruption in the land sector, inadequate urban
development plans, and skewed lease policies are among the significant challenges. Addressing
these challenges requires the government and other stakeholders' concerted efforts to promote
transparency, equity, and sustainability in the provision of land for residential purposes.

The urban land access strategies in Bahir Dar can be categorized into two main groups: formal
and informal. Formal urban land access, as per Lease Proclamation 721/2011, is limited to two
methods: auction or allotment. This is done to capture the complete urban land value owned by
the municipality and utilize it for infrastructure development. However, due to the rapid
urbanization rate in the city, urban land values are increasing rapidly, making it difficult for low
and middle-income groups to participate in the auction. Therefore, less than 5% of high-income
residents are the sole beneficiaries of this approach. Conversely, the allotment modality aims to
provide access to lease land at a benchmark price, with cooperative housing and public
condominiums being the only eligible land uses. It primarily aims to provide land access for low
and middle-income groups.

As municipalities struggle to meet the residential land demand of their inhabitants, informal
access methods, such as occupying state lands or purchasing plots from peri-urban farmers, have
become more common. Informal access is typically pursued by those who cannot afford the
formal methods of acquiring residential land.

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 Fig 2. Urban Land Provision Modes for Housing in Bahir Dar City (Own prepared)
Interviews with government officials and experts at the municipality and sub-city levels indicated
that the primary methods of accessing land for housing development are currently through lease
auctions and purchasing from peri-urban landholders. Some informants noted that informal land
purchases were a more straightforward option for many city residents compared to the formal
ones. Unfortunately, this informal method has been facilitated by illegal land brokers, corrupt
officials, and land management experts.

An uncontrolled market is developing as a consequence of urbanization, along with the

accompanying population pressures and elevated levels of demand for land in metropolitan areas.
In other words, the fast increase in population is leading to the development of unregulated
urban land markets as well as the conversion of property rights under customary tenure into
different types of privately owned rights. These changes are occurring as a result of the
privatization of previously held rights. Land transactions have evolved into a consistent
component of urban and peri-urban regions as a direct result of the development of land markets.

According to the study, a significant number of city residents have obtained land for residential
housing development by purchasing it from the informal land market. As Adam (2014) notes, this
method of acquiring land for housing development benefits the local population as it allows them
to bypass complicated procedures and regulations. Informants stated that a majority of city
residents live on land that was acquired through informal means, indicating that it remains a
viable option for obtaining land in the city.

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Fig 3. The most common mode of access to land for housing in Bahir Dar (The Municipality,
2021)
The data obtained from the study revealed that the most prevalent methods of acquiring land for
housing development are lease auctions and informal purchases from peri-urban farmers in the
informal land market. Scholars such as Arjjumend & Seid (2018) and Owoeye & Adedeji (2015)
suggest that in the absence of formal land allocation by the State, people tend to opt for informal
methods of acquiring land.

4.3. The Bottlenecks of Obtaining Residential Land in Bahir Dar City

The Bottlenecks of Obtaining Residential Land in Bahir Dar City

Bahir Dar is a city located in the northern part of Ethiopia and is one of the fastest-growing cities
in the country. As the population of the city continues to grow, there has been a significant
increase in the demand for residential land. However, obtaining residential land in Bahir Dar has
become a major bottleneck for many people, with a number of factors contributing to this
problem. In this essay, we will explore the main bottlenecks that make obtaining residential land
in Bahir Dar a challenging task.

The first bottleneck is the high cost of land. The demand for residential land has significantly
increased in recent years, leading to a rise in the cost of land. Many people find it difficult to
afford the high prices of land, which has resulted in a limited number of people owning land in

13
the city. The government has attempted to address this issue by implementing policies that
encourage affordable housing, but the effects of these policies have been limited.

The second bottleneck is the slow and bureaucratic process of obtaining land. The process of
obtaining residential land in Bahir Dar is a long and complicated process that involves various
government institutions. The process can take a long time, and many people find it difficult to
navigate the complex bureaucracy. The government has attempted to streamline the process by
implementing various reforms, but the effects of these reforms have been limited, and the process
remains slow and bureaucratic.

The third bottleneck is the lack of transparency in the land allocation process. There have been
complaints from many people regarding the lack of transparency in the land allocation process.
Many people feel that the process is biased and that some people get preferential treatment. This
lack of transparency has resulted in a lack of trust in the system, which has made it difficult for
people to obtain land.

The fourth bottleneck is the scarcity of available land. The city's rapid growth has resulted in a
shortage of available land for residential use. This shortage has made it even more difficult for
people to obtain land, and it has also contributed to the high cost of land. The government has
attempted to address this issue by opening up new areas for development, but the effects of these
efforts have been limited.

The fifth bottleneck is the presence of land speculators. Land speculators are individuals who buy
up large tracts of land and hold onto them in the hope of selling them at a higher price in the
future. This practice has contributed to the high cost of land, and it has also made it difficult for
people to obtain land. The government has attempted to address this issue by implementing
policies that discourage land speculation, but the effects of these policies have been limited.

In conclusion, obtaining residential land in Bahir Dar is a significant bottleneck for many people
due to various factors. These factors include the high cost of land, the slow and bureaucratic
process of obtaining land, the lack of transparency in the land allocation process, the scarcity of
available land, and the presence of land speculators. The government must take action to address
these bottlenecks and make it easier for people to obtain land. This could involve implementing
more effective policies that encourage affordable housing, streamlining the land allocation

14
process, improving transparency, opening up new areas for development, and discouraging land
speculation. By addressing these bottlenecks, the government can help to ensure that more people
in Bahir Dar can obtain the residential land they need to build their homes and improve their
lives.

There are many challenges on both the government's and the demand side of accessing residential
land plots in Bahir Dar city. These include the fact that the rate of urbanization is so high that the
municipalities can't keep up with the demand for serviced land. The interviews conducted with
government officials and farmers confirmed that the population growth and migration that have
been undergoing in the city make the supply of land more challenging. According to the people
who told us this, too, there are a lot of new people moving to the city.

The unparalleled urban population expansion in Africa and other regions of the developing
countries is driving an extraordinarily quick rise in the demand for urban land. This is leading
urban land prices to skyrocket. As of right now, urban centers in Ethiopia are battling with the
rising demand for land for a variety of urban development goals. Because of this, the process of
urban land delivery has become an important land policy issue in Ethiopia. The government has
been expropriating and reallocating land, mostly from peri-urban regions, as a reaction to the
rising demand for land for fast urbanization and the need for updated infrastructure. This is done
as a response to the need for modernized infrastructure. So, the study found that the huge
backlogs that have built up and the rapid urbanization that has been taking place have led to high
demand for land in the city.

The availability of land is one of the most important concerns regarding land development and
management systems; this problem has been a significant bottleneck in each and every
metropolitan area in Ethiopia. Existing realities in many urban centers demonstrate that these
realities have hampered the achievement of a range of development goals for the centers. This is
the case in many of these urban centers. Because of a wide variety of policies, legal and
institutional issues, and procedural problems, the preparation of detailed land use plans, the
acquisition of land (also known as expropriation), and the development of land with services have
all been painfully slow processes, both in the past and in the present.

15
In addition, the migration of people, particularly from the surrounding Weredas and rural Kebeles,
towards the urban centers in search of jobs is increasing at a high rate. This condition has led to
increasing demand for land for housing development in the city. This shows how the city hasn't
done enough to make sure there is enough land for residents and how the city hasn't kept enough
land for residents. The other challenging factor in the land delivery system in Bahir Dar is
corruption.

The interviews conducted during the field survey with government officials, sub-city
administrators, and farmers confirmed the existence of corruption in the land sector of the
municipality. In particular, the interview held with the manager of the ethical and anti-corruption
office and the corruption investigation office of the municipalities provided information that gives
a general picture of the practice of corruption in the land sector of the municipality. Shown were
bribery, hiding personal files, long waits for service, and other things. The land operational staff
were also shown manipulating their own personal files. The urban land audit report for seven
years to 2021, prepared by the collaboration of the Anti-corruption Commission of Ethiopia and
the Federal Audit Authority, disclosed that the corrupt activities include seeking money to shorten
bureaucracy, preparing false maps, erasing lease agreements, omitting or decreasing lease prices,
to name a few (Report of the Federal Audit of Ethiopia, 2021).

The ineffectiveness of land lease policies to serve low-income residents is another challenge to
accessing land plots for residential development. The interview conducted during the field survey
confirmed that, currently, it is difficult to get land through winning lease auctions, particularly for
the low-income groups in the city. In line with this, some informants stated that the only way for
low-income groups to gain access to land with a floor price for lease is to form housing
cooperatives. Bahir Dar's benchmark land lease price for residential housing is 300 ETB/m2,
which most people can afford. This figure comes from Amhara Regional State Directive
No.1/2013, which implements Lease Proclamation 721/2011.

However, in the auction modality, the price of residential lands is more than 25,000 ETB/square
meter on average in the city, which is unthinkable for almost all urban residents. This reveals that
only the richest people can access the natural resource (land), which should belong to everyone.
The price of a commodity is determined by the demand for that commodity. As such, the highest
bidder gets the opportunity to access the land. Land prices are a critical factor in access to
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housing. The article concluded that because there is not enough land, there are strict rules, and
many people don't have a lot of money, high land prices have become a big problem for people in
many developing countries.

4.4. The lease holding Policy Implications on Formal Land Acquisition for Housing

The lease-holding policy is a concept that allows individuals or organizations to lease land for a
specified period from the government or private landowners. The policy has been implemented in
many countries, including Ethiopia, to facilitate formal land acquisition for housing. In this essay,
we will explore the policy implications of the lease-holding concept on formal land acquisition
for housing.

The first policy implication of the lease-holding concept is that it allows for the efficient
allocation of land. The policy allows the government to lease out land for a specified period,
ensuring that land is utilized effectively. This approach ensures that land is not held idle, waiting
for development. It also enables the government to regulate the use of land, which helps to avoid
the overuse of natural resources.

The second policy implication of the lease-holding concept is that it promotes affordable formal
land acquisition for housing. The policy allows individuals or organizations to lease land for a
specified period, which is cheaper than buying land outright. This approach is particularly
important in areas where land prices are high, making it difficult for people to afford formal land
acquisition for housing. It also helps to promote sustainable urbanization by ensuring that land is
used for its intended purpose.

The third policy implication of the lease-holding concept is that it encourages the development of
formal housing. The policy allows individuals or organizations to lease land for a specified
period, which provides them with the security of tenure they need to invest in formal housing.
This approach helps to promote formal housing development, which is essential for improving
living conditions, reducing informal settlements, and enhancing urban planning.

The fourth policy implication of the lease-holding concept is that it promotes economic growth.
The policy allows individuals or organizations to lease land for a specified period, which provides
them with the security of tenure they need to invest in businesses that require land. This approach

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helps to promote economic growth by encouraging investment in productive activities and
creating job opportunities.

In conclusion, the lease-holding policy has several implications for formal land acquisition for
housing. It promotes the efficient allocation of land, affordable formal land acquisition for
housing, the development of formal housing, and economic growth. It is, therefore, essential for
governments to implement this policy to ensure that land is utilized effectively, and formal
housing is developed, which will improve living conditions, reduce informal settlements, and
enhance urban planning.

Land tenure in Ethiopia has shifted dramatically, from feudalistic systems during Emperor Haile
Selassie's monarchy (1930–1974), to socialist land policies during the Derg military government
(1974–1991), and finally to the current system under the Ethiopian People's Revolutionary
Democratic Front (EPRDF), which took power in 1991.

During the data collection session, the interviewees were asked their opinion on the effectiveness
of Ethiopia's urban land lease policy. Accordingly, the data showed that the lease proclamation is
only workable for the richest countries that can compete. In the latest lease proclamation
(721/2011) version, only two modalities (tender and allotment) are functional to transfer land for
housing purposes, except for cooperative housing and condominiums. This implies that only the
haves, who are the high bidders, can get access to residential land, which is a natural resource to
be fairly distributed among every class of society. On the other hand, according to Proclamation
No. 211/2011 of the land lease policy, low-income groups shall have access to land at the
benchmark price of land through cooperative housing. But, this opportunity to access land for
residents was not implemented effectively. Thus, there is a little-to-no opportunity for low-
income residents to access land through the floor price of leases in the city.

5. Conclusions

Land delivery is a critical service that municipalities provide to their citizens. Customers demand
high-quality and timely services that meet their expectations. However, in Bahir Dar city, the
municipality lacks the necessary land and land-related services. The formal access to land for
residential development in the city is constrained by the lease policy's modalities of tender and
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allotment. As a result, a considerable proportion of residents are finding it challenging to access
land, as only the highest bidders can obtain residential plots.

Several challenges hamper the land acquisition process, including the high level of urbanization
that exceeds the municipalities' capabilities to access serviced land. Corruption in the land sector
and the lease system itself are also significant challenges. The lease system is inefficient in
transferring land for housing in base case areas due to the limitations of the modality and tender.
Moreover, the leasing policy is skewed to favor the wealthy and deny middle-income and low-
income groups the right to own a house.

The growing backlog, fast urbanization, population expansion, and migration from other urban
and rural areas have contributed to Bahir Dar city's increasing need for land. The number of
applications for land plots has consistently exceeded the number of available plots, leading to a
steady growth in demand. The municipality has been unable to keep up with the pace, volume,
variety, and complexity of the city's land delivery difficulties. The mismatch between demand and
land availability has resulted in an increase in land prices and housing scarcity.

The Land Lease Policy Proclamation No. 211/2011 stipulates that low-income groups should
have access to land at benchmark prices through the creation of housing cooperatives. However,
this opportunity to acquire land for housing purposes has not been efficiently executed, and the
land leasing program has failed to adequately serve low-income groups, including government
workers. As a result, the tendency of unlawful land acquisition is growing in the city due to the
municipality's failure to provide sufficient land for residential house construction via the
allotment modality.

In conclusion, the inadequate land delivery service in Bahir Dar city is hindering formal land
acquisition for housing. The lease policy's limitations and corruption in the land sector are the
primary challenges to land acquisition. The municipality should take necessary steps to improve
the land delivery service, address corruption, and implement the lease policy fairly to provide
equitable access to land for all income groups. This will help to promote sustainable urbanization,
affordable housing, and economic growth in the city.

Land delivery is one of the services provided to municipality citizens (clients). Customers
demand timely delivery of high-quality services that meet their expectations. However, Bahir

19
Dar city perspective lacks the municipality's land and land-related services. The scenario of
formal access land for residential development in the city is hanging at the lease policy in the
modality of tender and allotment. A considerable proportion of dwellers are hardly getting access
to land since the lease paves the only way for riches; the higher bidders can only get residential
land plots.

Many challenges hampered the land acquisition process, including the high urbanization level
running beyond the capabilities of the municipalities to access serviced land. Land sector
corruption and the lease system itself are found to be the dominant ones. It is concluded that the
lease system is inefficient to transfer land for housing in base case areas due to limitations on the
modality and tender. The leasing policy is skewed to add for the haves and deny the middle-
income and low-income societies the right to get a house.

Backlogs, fast urbanization, population expansion, and migration from other urban areas and
surrounding rural areas have all contributed to the city's growing need for land. The number of
applications has always exceeded the number of available plots, and there has been a steady
growth in demand or number of applications throughout the years that has not been met by the
supply of plots in Bahir Dar city. Perhaps this has meant that the municipality has been unable
to keep up with the city's land delivery difficulties' pace, volume, variety, and complexity. The
mismatch between demand and availability of land had a significant role in the increase in land
prices and the city's housing scarcity.

Owing to their inability to meet the requisite cost of land for housing due to poverty, low-
income groups, on the other hand, should have access to land at the benchmark price via the
creation of housing cooperatives, according to Land Lease Policy Proclamation No. 211/2011.
However, this chance to acquire property for housing purposes was not executed
successfully/efficiently. As a result, the land leasing program could not adequately serve low-
income groups, such as government workers. To respond to the outgrown demand, the
tendency of unlawful land acquisition is growing in the city, mainly due to the municipality's
failure to provide sufficient land for residential house construction via allotment modality.

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