Introduction

For over 40 years, housing policy in Hungary ignored housing renewal. Socialist policy concentrated on new housing development and the existing stock was neglected until the late 1980s when the first renewal attempts took effect. The transition to capitalism was marked by the large-scale privatisation of housing, following which the renovation of multi-family housing was dependent on decision making games between owners in each condominium. Following a decade of ‘non-policy’ in housing, new financial initiatives were introduced at the national level from the early 2000s directed towards the energy efficient renewal of condominiums, mainly in large housing estates.

This chapter has five sections. Following an opening review of the history of frustrated urban renewal efforts in Budapest, the second section summarises the conditions underpinning the renewal of residential areas in Hungary during the socialist period and the transition to capitalism. The third section analyses housing policy approaches to renewal in post-socialist Hungary and the fourth focuses on the development of a municipal area-based renewal strategy in Budapest, an exciting story about the battle between market factors and public policy efforts. The final section draws conclusions and considers the prospects for the future.

As the largest city in Hungary, and with unique experience of urban and housing renewal dating back to the 1970s and 1980s, Budapest provides the case study for the chapter. Following mass privatisation, and with problems arising from a complex two-tier local government system, the municipality developed an area-based urban renewal framework at the end of the 1990s. After years of limited success, a new period began in 2007 when European Union (EU) funding began to be available for the renovation of multi-family housing in relatively poor areas. As a result, new integrated and area-based urban renewal programmes were developed, in which the renovation of housing became one of the most important elements. The emerging financial crisis, combined with a decrease in EU funding due to changes in the eligibility of Budapest, and new local government regulation have, however, created an uncertain future for area-based urban and housing renewal.

In this chapter a distinction is made between housing renewal and urban renewal: the latter refers to area-based and concentrated efforts to achieve the renovation of all buildings in a given area. In Budapest, the large scale of renewal problems has necessitated going beyond building-by-building renewal to achieve a more spatially concentrated approach.