ASSESSMENT OF REAL PROPERTY VALUATION FOR EXPROPRIATION COMPENSATION IN ADDIS ABABA CITY: THE CASE OF GULELE SUB-CITY RIVERFRONT DEVELOPMENT

Rapid urban redevelopment is generally accompanied by the onset of displacement, while tensions increasingly arise between physical modernization and social equity. Although the valuation of property is essential to any system of fair compensation, inconsistencies in valuation methods allow for inequitable outcomes. This paper explores how different approaches to valuation impact expropriation compensation for displaced households within the Gulele Riverfront Development Project in Addis Ababa, Ethiopia. It aimed to examine the actual value, expected value, weighted value and to identify factors affecting valuation and compensation of typical property. Methodically, a mixed-method research design using descriptive statistics, NPV analysis, and hedonic regression was employed, gathering data from woreda 4, Gulele sub-city through the sampling of 113 households from a population of 164 participating households. Results indicate that 55% of private homeowners were compensated, but 45% renters occupants were largely excluded. However, most displaced households expressed partial satisfaction with relocation since it helped them moving out of that risky area and gave condominium housing. Then, objective-wise property values were computed to be 17,485 for actual compensation; 9,959 for current value; estimated 38,773 for future value; 13,082 for weighted average value; and projected to exceed 8.4 million for weighted NPV (assuming 50 year life time & 10% discount rate) where all values were measured in Ethiopian birr per meter square area. In regression analyses, significant determinants of compensation value included property quality, location attributes and household characteristics. Estimated weighted NPV of properties projected over a 50-year time horizon underlines substantial underestimation in existing compensation practices. It is shown that integrated valuation frameworks bear the potential to yield more accurate property values and more equitable compensation, thus framing socially sustainable urban transformation. Beyond the case context, these results provide empirical support for policy reform in the realms of urban land valuation and resettlement compensation for rapidly developing cities of the Global South.