Public Perceptions and Socioeconomic Impacts of Restricted Land Lease Policies in Addis Ababa, Ethiopia: A Structural Equation Modeling Approach

Background: Inappropriate land policies remain a major constraint on economic and social development in many developing countries. Objectives: This study examines public perceptions and the collateral impacts of Restricted Land Lease Policies (RLLP) on land possession (LPOS), housing affordability (HAF), and socioeconomic status (SEST) in Addis Ababa, Ethiopia. Methods: A cross-sectional research design was employed, involving 384 respondents selected through a multistage sampling technique. Structural Equation Modeling (SEM) was used to analyze the relationships among variables. Findings: Results reveal that RLLP significantly enhances perceptions of land possession (β = 0.311, p < 0.001) but has a negative effect on housing affordability (β = -0.142, p = 0.003). Housing affordability emerged as the strongest direct predictor of socioeconomic status (β = 0.45, p < 0.001), with institutional support (IST) exerting a significant moderating effect. Interestingly, institutional support itself negatively influences socioeconomic status (β = -0.49, p < 0.001). Moreover, the interaction terms HAF×IST and LPOS×IST show significant negative moderation effects on SEST (β = -0.276 and β = -0.165, respectively). The model explains 44.7% of the variance in socioeconomic status, indicating strong predictive power, and 29.5% of the variance in estate satisfaction, suggesting a moderately good model fit. Discriminant validity was confirmed using the Fornell-Larcker criterion and cross-loadings, supporting the distinctiveness of all latent constructs. Measurement indicators such as RLLP6 (λ = 0.981) and RLLP5 (λ = 0.962) demonstrate strong factor loadings. The relatively high mean score for RLLP (M = 4.90) reflects general public approval of the policy framework despite its drawbacks. Novelty: This is the first study in Ethiopia to employ SEM to assess the impacts of Restricted Land Lease Policies, highlighting the critical need for integrative and transparent land policy reforms that promote equitable enforcement, enhance housing affordability, and strengthen the role of institutions in improving urban satisfaction. Keywords: Addis Ababa, Ethiopia, Public perception, Land Lease Policies, Land possession