Index – Economy – Time has stopped in Hungary: housing poverty affects as many people now as it did 35 years ago

“As for the apartment, it worries me because I can’t buy it. The disturbing words of these scumbags, thieves, pickpockets who call themselves the government do not caress my heart. Moreover, they encourage everyone to buy their apartment, but they only give loans and money to those who have real estate, etc. {…} For twelve years, I looked at the people leaning out of their own windows, with bitter longing and thinking about when I would be able to do this” – excerpt from the reminiscences of Erzsébet Király, who was able to take over in 1990, during the regime change, the requested in 1978 council flat.

Historian Grexa Izabella, secretary of the Department of Philosophy and History of the Hungarian Academy of Sciences, brought the story to life in the issue of the scientific journal of the Hungarian Maltese Charity Service entitled “Housing challenges in everyday life”.

And why did we start this article with this quote? In order to illustrate, the housing crisis and housing poverty have been an unsolved problem in Hungary since the regime change. Only the parameters causing the difficulty have changed.

Anxiety, insecurity even then, still today

At the end of the 1980s, 4.5 percent of the apartments in rural areas and half of them in Budapest were council apartments. In the countryside, the Kádár cubes were built from their own resources. It is clear from this that the conditions and possibilities of getting an apartment were different even then in the capital and in the countryside, and it is no different today either, at most the possibilities have somewhat closed. Council apartments were sold as permanent residences from 1983. The resident had the right of first refusal, but if he could not buy the apartment, the municipality could sell it, which led to anxiety and insecurity. In the 1960s, the wave of panel constructions eased the difficulties of getting to the home to some extent, the extent to which these apartments met the requirements of that time is another question.

Even before the system change, assistance to the needy with a home was already differentiated, with families enjoying an advantage, while those without children or pensioners found themselves at the end of the queue – just like today, when the majority of home building subsidies are tied to having children.

A problem spanning decades

At the round table discussion organized by the Maltese Charity Service, the experts pointed out that housing poverty still affects many people in Hungary today. At the end of the Kádár era, this means 2-3 million people, and unfortunately, after nearly 35 years, adequate housing is still not provided for so many of our compatriots, “only the set of problems has been transformed”.

The topic of the housing crisis was also dealt with by Index several times. Our approach was based on the trap 22 of the real estate market, in which we took as a basis the funds necessary to rent an apartment or, in the case of self-owned property, to pay off the loan, but even with this, many obstacles make housing difficult.

and even “gets so far” as to think about it; pay an expensive sublet or an equally expensive loan repayment.

The people in question either have no chance of owning their own apartment, or they live in their own property in a very bad condition, the renovation of which is essential, but they cannot do it without sufficient resources. Nor does it run on market-based subletting, which is not surprising in light of the fact that, in terms of the national average, the rent of an average 40 square meter, one and a half room apartment in good condition costs HUF 200,000, while the same in Budapest has already reached HUF 270,000.

For them, a municipality-maintained rental apartment could be a solution, but there are very few of them left. After the regime change, the privatization of social rental housing began, with the result that there are now only 110,000 housing managed by local governments across the country. If we put the 2-3 million people on the other side of the equation, it can be clearly illustrated that housing poverty is a really pressing problem.

They are looking for a property to rent

Several non-governmental organizations are working to ensure that these people have a suitable quality roof over their heads. However, they do not have an easy job in several ways. In addition to the fact that there are few properties that can be “used” as social rental housing, a significant part of the domestic housing stock is considered outdated from a technical and energetic point of view (the home renovation program 2.0, which is expected to start in June, may provide some remedy for this gaping wound).

Just as difficulties are caused by the rigidness and inflexibility of the Hungarians – which organizations trying to help often face.

There was a case when we found a suitable property for a lady living in Veszprém in a settlement 8 kilometers from the city, but she refused to move

– said economist Attila Lendvai-Frikkel, managing director of Veszol (Veszprém Community Housing Agency) Nonprofit Kft. operating in Veszprém county.

The specialist emphasized: they are looking for a tenant for the apartment and not the other way around, which means that even though a studio apartment is available, they will not move in a family with several children, while they will not provide a three-room property for a single person either. At the same time, Veszprém does not abound in apartments that can be used for social purposes either.

Attention should also be paid to adjusting the rent to the income of the person looking for a home. “It is a rule of thumb that the amount spent on housing cannot exceed 40 percent of the total monthly income, otherwise livelihoods are at risk. We pay close attention to this,” said Attila Lendvai-Frikkel.

It is an entry point for many

Similar to Veszol, MR Lakásalap Nkft, founded by the Magyar Máltai Szeretetszolgálat and the Magyar Református Szeretetszolgált, helps the needy with housing difficulties. They did this casually, for example, during the period of the foreign currency loan fraud, when thousands of families could not pay their loans and lost their homes as a result of sudden increases in repayment installments. 6,500 such apartments came under their maintenance, which the people in trouble could then rent back for a nominal amount – HUF 17,000 on average – and later buy back. 4,500 such homes were returned to their former owners, said Ádám Lutár Balázs, MR Lakásalap Nkft. executive director, who also highlighted the low mobility rate experienced among our compatriots during assistance, and the extreme emotional attachment to home.

(Népszava reported last year that MR Lakásalap received 6,473 properties that were stuck in the National Asset Management (NET) Program and could not be bought back by their tenants free of charge. The state also provides the money necessary for operation. In 2022 and 2023, they will receive a total of HUF 6 billion.)

Especially single people and parents raising their children alone are in a difficult situation. Everyone has the right to safe housing, but at the same time, a kind of education is also needed in the social tenant market, since sustainable, energy-efficient housing has a special role in the age of the energy and climate crisis, and emphasis must also be placed on preserving the condition of a non-owner-owned apartment, emphasized the professionals.

Local governments mainly maintain rental apartments when it is socially, politically and economically worthwhile for them. After all, for example, the rent of these apartments is a fraction of the market price, which cannot cover the repair and maintenance costs that arise, so the municipalities have to cover them from their own coffers.

Not everyone can live in private property, so the rental housing market also needs subsidies from local governments and non-governmental organizations to help with housing, as this is the entry point to the real estate market for many. This requires the involvement of both domestic and EU funds

said Attila Lendvai.

According to experts, a state-regulated rental housing market would be important, companies and individuals could be conditioned with various motivational tools to rent out their properties cheaper than the market average. However, implementing this is a serious political task.

Neither news nor ashes of the program

Index wrote last summer, citing industry sources, that the government is preparing a rental housing program to alleviate the housing crisis, and the draft law on this is already being prepared. According to our information, several ministries are involved in the development of the program. There is no further information on where this project has been since then.

(Cover photo: Kitti Kolumbán / Index)