Since 2010, housing policy in Hungary has been characterized by a one-sided focus on the promotion of home ownership and subsidizing the middle class. The government had no answer to the unfolding housing crisis; since 2015 the growth of housing prices and rents vastly outpaced the increase in incomes. This lack of policy response has left not just the poorest in society, but also workers in key sectors and young people lacking familial support struggling to meet their housing needs. These issues have affected urban households even more severely, which has also prompted even some government stakeholders to voice their critique.
As in other European countries, the most effective tool to address the housing crisis would be the enlargement of the public housing sector – as it was also recognized in the National Strategy for Social Inclusion. Today, the public housing sector consists solely of municipally-owned rental units, which makes up about 3-5% of urban housing units.
This new amendment of the Housing Law proposes the eradication of the EUR 3bn municipal housing stock, which would lead to the deepening of the current urban housing crisis. The proposed changes in the Law will
- hand over properties to the poorest dwellers that they will likely be unable to maintain (around 80% of the current municipal stock requires refurbishment), increasing the housing precarity and the threat of homelessness;
- create new opportunities for the housing mafia and encourages speculation;
- unfairly advantage tenants occupying newly-built and recently refurbished public units, many of whom came by these units through political favors in the first place;
- punish municipalities that have gone out of their way to address the housing crisis in the past; the municipalities that have invested in bettering and increasing their affordable housing stock;
- eradicate the already limited opportunities for those in dire need to attain housing through the redistribution of empty municipal units;
- rob municipalities of their current tools to manage household arrears and aid families threatened or affected by homelessness;
- worsen spatial segregation through the dissolution of subsidized housing stock, pushing low-income residents out of the city.
Through all these effects, the compulsory privatization of municipal housing units to sitting tenants will worsen the housing crisis and increase inequalities. These politically motivated and deeply unfair changes in Housing Law, which go against European trends in housing legislation must be prevented.
13 May, 2021
Metropolitan Research Institute, Budapest