Social housing sector in Hungary

József Hegedüs, Iván Tosics, Éva Gerőházi

Abstract:

The paper outlines the background of the current housing situation by describing the legal and economic changes concerning the housing sector in the last decade. The most dramatic changes could be observed in the social rental sector.

The “social rental” sector in Hungary is considered to be equal to the municipal rental sector which was about 18-20% of the total stock before the privatization process started in the beginning of the 90’s. By now this share reduced to 5-5,5% and is still reducing. The management, maintenance and the renovation of this stock makes a big loss for the municipalities as the social rents are still a lot below the market level, they do not cover even the most needed expenses. The municipalities are in the decision of widening and economizing the sector at the same time.

By now the only actor in the social housing field is the municipality, there are no signs of changing the total rental sector towards the most common European models. The paper gives a critical analysis of the latest measures of the national government which tries to avoid any fundamental changes in the housing sector and especially in the rental sector.

The presentation also tries to outline the difficulties of widening the rental and mainly the social rental sector in Hungary. These difficulties could be rooted in the weakness of the financial sector, the lack of proper organizational forms, the lack of an effective system of housing allowances etc.