Metropolitan Research Institute

Metropolitan Research Institute, Budapest

Publications

József Hegedüs’s publication in the Housing Finance International is availble

József Hegedüs has published a paper in Housing Finance International comparing the housing finance crisis of 1989 and 2008 and its policy response. The causes and management of the two very different crises provide a wealth of information on the nature of the transition from a socialist housing system to a market-based housing system. The interesting difference is that in the first case the risk was borne by the state, which forced the borrowing population to share the gains from inflation, but did so with very modest support for the low-income population. In the second case, the risk was borne by the borrowers and the state essentially forced the banks to bear part of the losses of the families. However, the loan bailout was very unfair, as it favoured the top 20 per cent of income earners but did little to support the wider middle class. Both schemes included an element to help the most needy families, but this only reached a small proportion of those in need.

Read the paper here.

New study: on the metropolitan dimensions of urban manufacturing (ESPON MISTA) co-authored by MRI

A recent study co-authored by MRI on the metropolitan dimensions of urban manufacturing (ESPON MISTA) has just been launched on the ESPON website. The study was carried out by Politechnico Milano, WIFO – Austrian Institute of Economic Research, Latitude and Metropolitan Research Institute.

The study is organised around the role of manufacturing in urban areas of Europe with special attention to the forseen challenges of the 4th industrial revolution and the specific sectors of manufacturing in different urban areas that ensure the satisfacton of local needs but keeps the competitive position of cities at the same time. In order to reach these goals the research concentrates on finding the proper coordination mechanisms on metropolitan scale in the framework of fragmented governance systems.

The study evaluates the general trends in the manufacturing sector (decreasing labour force but increasing added value) in and around urban centres and analyses the spatial dynamics of different segments of manufacturing moving out from urban cores. The study also aims to identify possibilities for cooperation through which a more optimal division of manufacturing capacities can be achieved on a metropolitan scale based on the cases of Berlin, Oslo, Riga, Stuttgart, Turin, Vienna and Warsaw.

The study concludes that to a certain extent the division of roles in manufacturing between the city cores and their agglomeration is natural: having high added value activities inside cores where land prices are high, while locating manufacturing activities with high land use and transportation needs outside cities. However, this natural phenomenon tends to be harmful in cases where it generates additional transportation flows of goods and people, emptying out the city cores of basic manufacturing activities which provided jobs and sustained services. Thus, stronger interventions by public actors are needed not only on the level of the city but rather across whole urban functional areas to influence locational decisions of individual companies.

You can find the study with all its attachments at https://www.espon.eu/mista

Social Housing under and ‘Unorthodox’ Regime in in Post-crisis Hungary

The article “Social Housing in Post-crisis Hungary: A Reshaping of the Housing Regime under ‘Unorthodox’ Economic and Social Policy”, authored by MRI Managing Director József Hegedüs is available on the website of Critical Housing Analysis.

Hungary stepped on a very specific path two years into the Global Financial Crisis and the recession in its wake, on which it replaced ‘traditional’ austerity programs with ‘unorthodox’ economic policy. This policy paradigm shift affected the emerging social housing policy in two respects. First, the mainstream approach to social problems related to worsening housing affordability (due to increased loan repayments and other cost items together with decreasing incomes) provided strong support for the middle class. Second, intervention toward low income households remained minimal, and served only to pacify political tensions. This dual approach characterized the policy of the government, and resulting shift in the social structure did not necessarily follow the direction policy makers intended. Programs aimed at the middle class were poorly targeted, and often helped the upper middle class the most, who again did not behave the way policy makers expected (which would have been increased consumption to stimulate economic growth). Programs aimed at low income groups rendered the social structure more rigid, decreased the chance of low income persons to escape from extreme poverty, and cemented the opportunity discrepancies between the rich and the poor. The most recent housing policy measures suggest that the mistakes committed in the 2000s will likely be repeated, and there are not measures in place which could correct their course.

The effect of GFC on tenure choice – the case of Hungary

The article “The effect of GFC on tenure choice in a post-socialist country – the case of Hungary”, co-authored by József Hegedüs (Metropolitan Research Institute), Adrienne Csizmady (Hungarian Academy of Sience) and Gyula Nagy (FHB Bank) was published in Issue 2, 2017 of International Journal of Housing Policy. The paper takes a look at the effect of the Great Financial Crisis (GFC) on housing tenure choice in a post-socialist setting, based on the case of Hungary. Central and Eastern European transition countries had a very predominant owner occupied sector  prior to the GFC, where owner occupied dwellings typically amounted to 85-95 percent of the housing stocks. The paper sets out to assess if stakeholders in the housing sector (households, government, banks, etc.) will learn from these experiences, and start showing a stronger preference and support for renting, which could result in a more balanced tenure structure and more stable housing system.

The full article is accessible on Taylor & Francis’s website.