The housing problem in Addis Ababa could be understood in terms of its qualitative and quantitative dimensions (Andargatchw, 1992). The total housing stock in 1995 was 350, 000. Of this 112, 000 houses are used for trade and businesses while the remaining 238, 000 houses are used for residential purposes. The housing demand of the 2.7million people in the city with an average family size of 5 persons is 560,000. This indicates that there is a deficit of 400,000 houses in the city (AA city government,, 1997). This shortage could be met by constructing 30000 houses each year for 10 consecutive years. This does not include the housing shortage due to population increase in the city. The ministry of Works and Urban development shows that the total housing need for Addis Ababa for 1996 to 2000 is about 261,295. Out of this, 39 % is due to overcrowding, while 31 % is due to population increase and 30 % is due to replacement of obsolete dwellings. The housing conditions in Addis Ababa become worse when the qualities of houses are considered. The 1994 census revealed that 82 % of the houses have walls, made of wood and mud, 2.73 % have stone and cement walls, 6 % have lockets, 2.4 % have bricks, 0.72 % has stone and mud, 0.23 have wood and thatch, 0.10 have reed and bamboo and the wall of the remaining 5% are unspecified (1994Census). The same survey revealed that the majority of the houses (53 %) have mud floors. Houses with better floor materials of cement or concrete, wood tiles, cement (bricks) tiles form 21, 18 and 4 % respectively.