Rental Housing Affordability Analysis Using the Housing and Transport Cost (CHT) Index: The Case of Condominium Neighborhoods in Addis Ababa City, Ethiopia.

Abstract

Rental housing is a critical housing option, but its measures continue to be debatable. The objective of the paper is to examine the mutual effect of housing and transportation (H+T) monthly expenses on rental housing affordability considering the inner-city, intermediate, and outer-city condominium locations in Addis Ababa, Ethiopia. The combined H+T affordability index, a 45% threshold, and mixed research methodology were all used. GIS analysis, 1152 residents of rental condominiums were randomly chosen and surveyed in three comparable locations. The rental housing affordability was assessed and modeled using one-way ANOVA and multiple regression models.Findings indicate that rental housing affordability is significantly diversified among the three locations. Outer-city and intermediate neighbourhoods are found to be unaffordable, as residents spend over 55% and 48%, respectively, of their monthly income on housing and transport, significantly over the 45% H+T affordability index. Nevertheless, with a 30% H+T index, inner-city neighbourhood is affordable and residents could enjoy better access to various services. Accordingly, distance to the CBD is the most significant factor, and due to their lower proximity to the CBD, outer-city residents and lower-incomers are facing higher financial burdens. So, H+T Affordability analysis provides an up-to-date understanding and will inform urban planning and policymaking to consider innovative options such as location-sensitive housing frameworks and subsidy and rental housing policies. Further researches need to employ at the national and regional levels to discover new perspectives.