In an urban area, land is a critical resource where all social, economic andrnenvironmental activities takeplace. Studies indicate that, currently, many urbanrncenters are facing different challenges such as limited institutional capacity, poorrnurban land market, weak urban governance, and poor land information system,rnwhich retard desired outcomes of land as a basic resource. The objectives of thisrnstudy are fowfold: i) identifYing instituitional capacity of the MuniCipality inrnBichena town, ii) evaluating the land market system of the study area, iii) assessingrnthe problems of good governance, and ivY evaluating the land information system ofrnthe Municipality. A sample size of 140 respondents was taken from the localrnresidents. Moreover, professionals and the Manager of the Municipality wererninterviewed. Both primOly and secondary data were collected throughrnquestionnaire, interview, and observation. Once the data collected, edited andrnmanaged, both quantitative and qualitative analyses were conducted. Findings ofrnthe study show that the demand for land for residential purposes is increasing fromrntime to time. But because the demand and supply of land is not balanced leading torninformal selliements. Important governance factors contributing to such problemsrninclude weak institutional capacity of the MuniCipality in the field of skilledrnmanpower and financial terms, poor land information system, lack of goodrngovernance with reagard to transparency and accountability. Findings of the stuayrnalso indicate that land speculation and the establishment of unstandardized housingrnare prevalent problems allributed to poor governance of urban land. Therefore, therntown administration and the Municipality along with other relevant stakeholdersrnshould work together so as to allievate the aforementioned challenges as per thernrules and the regulatios set. The ANRS should also support the town administrationrninterms of long term and short term training to enhance the human capital of thernMunicipality thereby help bring about an all rounded development in the town.rnKey words: land management, good governance, land speculation, informalrnsettlements, sub-standardized housing