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Social rental agencies in Hungary

In 2013, Habitat for Humanity Hungary, in partnership with the Budapest-based Metropolitan Research Institute, conducted research and put together a proposal to set up social rental agencies. This initiative aims to create affordable housing options for families who face housing problems and cannot become homeowners.

The housing privatization that engulfed Hungary in the early 1990s and accelerated with the transition from socialism to a market economy created a class of homeowners. The state sold its housing stock to the sitting tenants at a fraction of its prince. This policy almost eliminated the social housing stock in the country. By 2012, only 3 percent of homes, around 119,000 units, were social housing, while it was estimated that the housing waiting list grew to 400,000-500,000 names.

This policy created a class of poor homeowners who had no means to maintain their property. The need for affordable housing has become greater in recent years because of the economic downturn that followed the 2008 financial crisis. Today, according to Habitat for Humanity Hungary and Metropolitan Research Institute estimates, 25 to 35 percent of households may face serious difficulties in covering housing-related spending. This goes beyond the poorest groups and reaches the lower middle class families.

At the same time, there are a lot of empty homes around the country. Although some of these units are uninhabitable, far away from the job market and lacking basic services, up to 150,000 units could be easily put to use with the right conditions.

The proposed social rental agencies can become an intermediary between potential landlords and social renters. These agencies can contact potential landlords, who are willing to commit to long-term contracts for three, five, seven or more years, for a rent level of 70 percent of the net amount. They also can guarantee regular rental income, manage potential risks and guarantee the preservation of property conditions. On the other hand, the families who face housing problems can get affordable housing through this plan. On top of the rent discount, families can receive rent allowances.

Habitat Hungary and the Metropolitan Research Institute propose to test the viability of the model through a pilot project. Different institutions, including NGOs and local government, have expressed interest in the program.

For a full description of the model and how it can work, please consult this short summary prepared by Habitat for Humanity Hungary and the Metropolitan Research Institute. You can also check FEANTSA research on existing models of social rental agencies in Western Europe.