As population and urbanization increase, the federal government and municipal authorities in Ethiopia face a huge challenge in providing access to safe, reasonably priced drinking water, housing, and sanitation services for their citizens. At present the mismatch between the rapid growth of urban areas and the attendants for services is severe. Investments in urban infrastructure lag far behind the increase in urban population. Urban municipalities cannot provide adequate urban services or guide urban growth and expansion; nor can they offer accountability to their tax-paying residents. Over one and a half million urban people lack safe water and almost 3 million lack adequate sanitation. The liquid waste of over 8 million people is discharged with little or no treatment, and the solid waste of 5 million people is thrown away haphazardly. Three-quarters of urban dwellers live in unhealthy homes and neighborhoods. Congestion and industrial and vehicular emissions are on the increase. The resulting environmental ills pose excessive health hazards for the growing urban population.