The major goals of the Integrated Housing Development Program in Addis Ababa (IHDPAA)rnare government housing production to meet the housing needs of the low and medium incomernpeople and also to create mass employment opportunity for Micro and Small Enterprisesrn(MSEs). The purpose of this paper is to assess the effectiveness of the Program in meeting theserntwo goals and the challenges that are facing the Program in meeting these goals. Questionnairesrnhad been distributed for condominium house owners on a random basis and to MSE operatorsrnby using stratified sampling method in Arada, Bole and Nifas Silk Lafto Sub Cities. Focus GrouprnDiscussion was conducted with Site committee members and MSE supervisors in the abovernselected sub cities in addition to the in - depth interview with MSE and housing officials fromrnAddis Ababa Housing Development Project Office, Ministry of Works and Urban Development,rnand the selected sub Cities. Percentages, tables, graphs and coefficient of correlation by usingrnSPSS version 17.0 were used in analyzing and examining the quantitative data. The empiricalrnresults indicate that IHDPAA is not achieving its goal as originally planned. The first goal ofrnmeeting the housing demand of low and medium income people did not achieve due to slow raternof housing production, low income level of residents, absence of housing finance, lack ofrnserviced land and lack of institutional capacity to effectively implement the Program. ThernProgram is successful in meeting the second goal that is creating employment opportunity. Thernlimitation of the Program with regard to employment is that the jobs created lacks sustainability.rnThe findings indicate that MSEs that are participating in the Program face different challengesrnof growth and expansion. Therefore, the study suggests that the Program should considerrnalternative housing delivery mechanisms to meet the housing demand of the city especially thernhousing needs of the low and medium income people who are more vulnerable to the problem.rnSupporting the MSEs, by solving the challenge they face, can enhance the job opportunity thatrncan be created by the Program. In addition, the government should consider other policyrninterventions that encourage labor intensive technologies in order to reduce the unemploymentrnproblem. Therefore, this study can be used as an important reference on some issues related tornIHDPAA in order to improve the effectiveness of the Program