On 11 December, the Republikon Institute held an event entitled "Affordable Housing - Dream or Reality", which explored the issue of housing in Budapest in a panel discussion with politicians and experts.
Opening speech by Gábor Horn (Chairman of the Board of Trustees of the Republikon Institute)
Political Panel
Krisztina Baranyi, Mayor of Ferencváros: She said the housing crisis is affecting the disadvantaged, whose ability to earn an income was basically limited. In addition, it is very difficult for young people to solve the housing issue, as renting a room costs 100,000 forints. As a municipal task, the housing problem of the socially deprived is addressed. The situation is different in this respect, in the past the 9th district did not privatise the public housing stock, instead the municipality tried to renovate the dilapidated flats and rent them to the residents. For this reason, there is a much higher proportion of municipal rental housing. Much of the district's resources are being used to rehabilitate these houses. The funds provided in the Municipal Act are not sufficient to solve the problems, but the municipality has a duty to help people who cannot afford decent housing at market prices. Social rental housing and housing applications can help disadvantaged people and young people. He stressed that in Hungary everyone would prefer to own property, a cultural trend, but in Budapest this is difficult at market prices. He disagrees with the Airbnb regulation in Terézváros - he believes that this phenomenon is not linked to the housing crisis, the regulation will not reduce the price of long-term rentals, he believes that it will do more harm than good. No other district has used either a ban or a restriction. Regulation, he said, should be a central legislative task, not a municipal one.
Péter Niedermüller, mayor of Erzsébetváros: He described the housing crisis as a process where nothing has happened since 2010 - old houses (more than 100 years old) are in inhuman conditions, and no government programme has been put in place to address this.In 2019, when they took over the municipality, there were 500 uninhabitable flats in the district, of which nearly 200 have been fixed up in the last five years. The other part of the problem is that many families are living in very small square meters, not in a dignified way. They need better housing. He believes that municipalities cannot solve this alone, it needs bigger concepts. It must be an absolute priority to prevent someone from losing their housing. They have a relatively well functioning debt management system, a mentoring programme. He believes that the government is helping those who have relative financial security from the bottom up, but every year they are taking money from local authorities, e.g. freezing business rates. This should be given to the municipalities to maintain housing policy. Without it, local authorities cannot take real action. Because it is not only the disadvantaged who need to be addressed, but also housing needs to be set aside, for example sheltered housing for people fleeing domestic violence or living with a disability. He considers himself pro-regulation, but doesn't see why it should be banned, as banning Airbnbs won't bring down the price of housing, he says it doesn't address the housing problem.
Tamás Soproni, Mayor of Terézváros: At the beginning of the panel discussion, he pointed out that in order to get back into the Christmas spirit after the event, we need to listen to a lot more Mariah Carey, as the housing crisis paints a very gloomy picture of the future. He agreed that this is a problem that municipalities cannot solve alone. He said that rents have risen across Europe, but that the rise in rents in inner cities is a self-expanding process, affecting outer districts. What will come from the United States is that various capital investors will buy up ready-made blocks and neighbourhoods and can beat prices from a monopoly position. It is worth looking to the West to see what lies ahead, and we could look for solutions, such as Vienna, but we cannot do that without state support. And pushing people out of the city centre is not good for the fabric of society. On the Airbnb ban, he thinks that the municipality is banning a lot of things by default (e.g. opening a pub on the 2nd floor of a condominium). The increased number of Airbnbs is pushing out local residents, but he also thinks that a ban is not the final solution, for example, at national level it would be right for a private owner to rent out an apartment. Policy makers should have recognised this earlier and regulated it. He is glad that Terézváros residents voted the way they did to put an end to investment property ownership, because it does not create a healthy community.
András Pikó, mayor of Józsefváros: He could not name any element of the housing crisis where the situation is not catastrophic. There was no example of a housing crisis that could not mention any crisis that could not be solved. In the inner city of Józsefváros, the number of people affected by the housing crisis is growing. On the supply side, there is an infrastructure crisis - many of the 130 houses are unrenovated. In 2019, there were more than 800 empty municipal flats, which are being renovated. The previous municipality gambled to sell them, there was no social policy objective. Józsefváros has caught up in the sense that long-term rentals are the same as in other inner-city districts. The other problem is that there are a lot of houses over 100 years old, which require extremely large sums of money to renovate. And the quality aspect is that there are people living in appalling conditions, 5 or 6 people per 30 square metres, even in flats with no comfort. The housing is built in the last century and cannot be made more comfortable. If you look only at the volume, how many people are being provided with housing and how many people need it, it is very little, it is not enough to tackle the social problem. He finds the Airbnb ban an interesting experiment, their district has seen a lot more Airbnbs since then. He considers himself pro-regulation. He sees Józsefváros as a colourful community, but he doesn't see the problems that Airbnb's would cause socially. But there is much more demand pressure, even if all Airbnbs in the capital were banned and this were to transition to long-term home ownership, only half of the demand would still be met. The economics is that a ban will not reduce the price of long-term home rentals.
Expert panel
Judit Székely Gáborné (KSH): housing demand can only be met from the market, if this is not possible, compromises have to be made, such as size or quality of housing, or the tenant makes a concession on location and moves to the suburbs or the suburbs. In the last census, an incredible proportion of empty homes were reported by residents, with occupancy rates in the inner suburbs below 50%. These are virtually unbelievable rates and there is a very high proportion of seasonally occupied dwellings.
When a lot of people gave up their homes during the covids, wage levels were very slow to come back. Wage levels are now about 20% higher than they were in 2015, and rental prices are not rising as steeply as owner-occupied prices, where a class of people has emerged who are willing to pay more and more for a home to buy it.
Balázs Váradi (Budapest Institute):It is important to stress that housing poverty is also poverty. It is important to stress that housing poverty is important. In Elisabethváros, we carried out a survey which showed that of the 1 600 rented out flats in the district, only a quarter were occupied by people in need.
Market rents are high, but mobility works to some extent there. Those who live in council housing or in very cheap housing are not happy because they are trapped and they live in housing that they don't want for themselves because it's tiny and musty, but they won't give up what they get for a tenth of the market price. The number of housing subsidies should be increased.
Vera Kovács (Housing Agency): it is not only a financial issue, there is also a kind of discrimination if the housing market is unregulated. It is not just financial discrimination. There is also discrimination against the Roma population or families with children, and accessibility is not really solvable. Although public expenditure is present in the framework of the CSOK, the identification of the public task is not so well done. The CSOK addresses the current issue in the opposite way. It promotes the acquisition of private property, which goes outside the benefit system and ultimately increases private property.
The question arises whether housing should be a residence or an investment. Treating housing as an investment makes it more expensive.
Housing policy has not been around for long, it has only been family policy.
Within the framework of the work of the housing agency, the capital rents privately owned apartments at slightly below market price, which it then sells on at slightly below market price to those who have income but cannot afford market-rate housing. All apartments are over-subscribed by hundreds of times.
Eszter Somogyi (Városkutatás Kft.): Our housing system amplifies social inequalities. The structure of the housing sector is skewed, with high rates of ownership, low rates of renting, and even lower rates of affordable municipal social housing. In some inner city districts, the reason why the proportion of local authority housing is high is because a large proportion of them were earmarked for rehabilitation, where they couldn't privatise housing, so there is a stock of housing that the local authorities have bought and privatised, and those who couldn't afford to buy their own housing are left in these flats. In these areas the municipality cannot raise rents either. A change in the law would be a key to a more effective housing policy and housing management. Rent subsidies and an increase in non-profit ownership of housing would be important. Effective housing policy cannot be implemented without government support and will. Municipalities currently have little scope to monitor and regulate the private rental housing sector. A good solution would be to register private rented housing, so that there is information on the market about rents and the length of time for which apartments are rented out.
Éva Tóth (Erzsébet Family Transition Home): the family transition home is for people who either come from overcrowded homes or have never lived independently. When you had kovid, many RBMB apartments were rented out to families, and only after the kovid was gone did they apply to us. While these flats were rented out, fewer people applied to the transitional home for families. There is no requirement for the applicant to be working to qualify for the program, we can help them if they need it. We have to live together with other families and this is often not easy. Families are allowed to stay in a temporary home for a year and a half, after which they can move to an exit flat, where they can stay for another year and a half, but they have to save money. Then comes the housing agency.
Republikon is supported by the European Union. The views and opinions expressed at this event do not necessarily reflect those of the European Union. Neither the European Union nor the funding organisation can be held responsible for them.
