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DOI: 10.1177/0042098012453856
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Zoltn Kovcs, Reinhard Wiessner and Romy Zischner
Perspective
Urban Renewal in the Inner City of Budapest: Gentrification from a Post-socialist

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Urban Renewal in the Inner City of
Budapest: Gentrification from a Post-
socialist Perspective
Zoltan Kovacs, Reinhard Wiessner and Romy Zischner
[Paper first received, August 2011; in final form, April 2012]
Abstract
After the political and economic changes of 198990, the concept of gentrification
inspired many urban researchers in central and eastern Europe (CEE). Despite the
growing number of papers, there is still a substantial empirical gap concerning the
transformation of inner-city neighbourhoods in the CEE. This paper is based on
empirical data regarding the physical and social upgrading of neighbourhoods in
inner Budapest. The paper argues that gentrification in its traditional sense affects
only smaller areas of the inner city, mostly those where demolition and new housing
construction took place as an outcome of regeneration programmes. At the same
time, the old housing stock has been less affected by gentrification. This is mainly
due to the high share of owner-occupation and the social responsibility of local gov-
ernments. Thanks to renovation and new housing construction, a healthy social mix
will probably persist in the inner city of Budapest in the future.
1. Introduction
The concept of gentrification has domi-
nated the literature dealing with inner-city
transformations over the past four decades
(Clark, 1991; Lees, 2008; Lees et al., 2008;
Ley, 1981; Smith, 1979, 1996). After the
political and economic changes of 198990,
the concept has also gained more attention
in urban research in central and eastern
Europe (CEE) (Kova cs, 1998, 2009; Standl
and Krupickaite, 2004; Sy kora, 1999, 2005;
Foldi, 2006). This is mainly because the
cities of CEE were affected by rapid eco-
nomic restructuring and social change as an
outcome of the post-communist transition
Zoltan Kovacs is in the Institute of Geography, Hungarian Academy of Sciences, Budao rsi ut 45,
Budapest, H-1112, Hungary. E-mail: zkovacs@mail.iif.hu.
Reinhard Wiessner and Romy Zischner are in the Institute of Geography, University of Leipzig,
Johannisallee 19a, 04103 Leipzig, Germany. E-mail: wiessner@rz.uni-leipzig.de and zischner@
rz.uni-leipzig.de.
Urban Studies at 50
50(1) 2238, January 2013
0042-0980 Print/1360-063X Online
2012 Urban Studies Journal Limited
DOI: 10.1177/0042098012453856
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and their internal socioeconomic patterns
tended to resemble the west European cities
(Boren and Gentile, 2007; Sy kora, 2009).
The massive inflow of global capital resulted
in new shopping, office and leisure centres
in inner-city and suburban locations. New
residential quarters for the better off in the
form of single-family housing and gated
communities were developed at the edge of
the compact city and more often in the sub-
urbs (Andrusz et al., 1996; Enyedi, 1998;
Leetmaa and Tammaru, 2007; Ourednicek,
2007; Ruoppila and Kahrik, 2003).
Nevertheless, the development of inner-
city neighbourhoods did not initially follow
the West European pattern. The social and
physical upgrading of these neighbourhoods
(i.e. gentrification) remained limited and
brought about only small and sporadic
developments during the 1990s (Haase
et al., 2012; Kova cs, 1998; Sy kora, 2005). In
most parts of the inner cities, a relative
decline remained prevalent after 1990 due
to worsening housing and environmental
conditions, the continuing concentration of
people with lower income and the lack of
legal and planning frameworks supporting
regeneration. In some cases, inner-city
neighbourhoods even became hotbeds of
social exclusion and segregation in the
first decade of transition (Lada nyi, 2002;
Wec1awowicz, 2002). Perhaps the only
exception within the wider region was
Eastern Germany where large-area regenera-
tion programmes with massive central-state
support resulted in spectacular upgrading
processes in the inner cities as early as the
mid 1990s (Brade et al., 2009).
However, a growing body of literature
has indicated a turnaround in the develop-
ment of post-socialist inner cities recently.
Signs of physical upgrading coupled with
gentrification have been reported from sev-
eral CEE cities even though most of these
studies focused on capital cities where
systemic transformations and globalisation
processes have been most advanced,
like Prague (Cook, 2010; Sy kora, 2005;
Temelova , 2007), Moscow (Badyina and
Golubchikov, 2005; Gritsai, 1997), Vilnius
(Standl and Krupickaite, 2004) or Budapest
(Foldi, 2006; Kova cs, 2009). Most of the
literature to date, however, lacks a convin-
cing empirical underpinning as far as the
mechanisms of gentrification, its actors and
outcomes are concerned. Therefore, it is
difficult to assess to what extent neighbour-
hood upgrading processes in post-socialist
cities fit the wider concept of gentrification
elaborated in western Europe and North
America. To narrow the gap, this paper
focuses on the socio-spatial change that has
taken place in the inner city of Budapest
from an empirical perspective. Based on
empirical research findings we try to
answer the following questions
What are the main factors of neighbour-
hood change and what is the role of local
policy in the regeneration of inner-city
neighbourhoods in Budapest?
How does residential change (displace-
ment) take place as a result of regenera-
tion and how has the socio-demographic
profile of upgraded neighbourhoods
changed?
Can we call this process gentrification in
a Western sense? What are the similari-
ties and differences between the Budapest
findings and processes described in the
Western literature?
Before introducing the empirical results and
answering these questions, we briefly reflect
on the theoretical background and intro-
duce the local framework conditions. After
the empirical analysis, we would like to turn
back to the original concept of gentrification
and fit the observed processes into a wider
conceptual framework.
URBAN RENEWAL IN BUDAPEST 23
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2. The Concept of Gentrification
and its Post-socialist Interpretations
The term gentrification has been used in the
literature in many different ways and the cri-
tique of a chaotic concept is more than ever
timely (Beauregard, 1986). If we take the tra-
ditional concept of gentrification put for-
ward by Ruth Glass (1964), it refers to the
process of transformation of old residential
neighbourhoods in which working-class and
poor residents are displaced by an influx of
gentrifiers, a new class consisting of well-
educated and better-off people. This change
results in improvements in the areas hous-
ing stock and public infrastructure with a
concomitant increase in dwelling prices and
rents (Hammel, 2009).
Over the past four decades, there has
been a shift in meaning and, in contrast to
the traditional definition, recent concepts of
gentrification apply a much broader view.
Terms like rural gentrification (Phillips,
1993), new-build gentrification (Davidson
and Lees, 2010; Rerat and Lees, 2011) super
gentrification (Hammel, 2009) broadened
the view of gentrification and covered a
huge variety of social transformation pro-
cesses in and outside the inner cities (Lees
et al., 2008).Writing about gentrification,
some authors put the emphasis on physical
upgrading which is not necessarily followed
(or just to a limited extent) by an influx of
better-off people and an increase in real
estate prices. As a contrast, others use the
term of gentrification exclusively for social
upgrading processes and, according to their
view, a physical upgrading in the gentrifica-
tion is not necessary (Friedrichs, 1996;
Glatter, 2007).
As we can see, very different processes are
interpreted in the literature as gentrification
that do not correspond to the traditional
recipe of the phenomenon. This reflects the
gradual change that has evolved in gentrifi-
cation research as far as the forms, actors
and geographical locations of the process
are concerned. As a consequence, gentrifica-
tion has gradually become a catch-all term
used to describe a great variety of social and
physical urban transformation processes
(Atkinson and Bridge, 2005; Lees et al.,
2008; Rerat et al., 2010). This is not least
because our cities are affected by many dif-
ferent types of physical and social upgrad-
ings, resulting from commercialisation,
globalisation and the growing differentia-
tion of lifestyle and housing preferences of
residents, underpinned by specific frame-
work conditions at the national and local
levels. The classical notion of gentrification
is therefore only one of the variants of the
term today. However, the use of the broad
concept of gentrification can result in the
original content of the process referring to
qualitative changes in an urban neighbour-
hood getting lost. In our empirical analysis,
we use the more focused term of regenera-
tion when selecting and analysing the case
study areas. By this term, we mean in general
the physical renewal and social upgrading of
old run-down residential neighbourhoods.
The physical and social upgrading of
inner-city neighbourhoods show great var-
iations in the post-socialist countries as
well. Cities of early reforming countries (the
Czech Republic, Hungary, Poland) and East
Germany, where inner-city restructuring
had already started in the early 1990s pro-
vide showcases for gentrification, whereas
reports on gentrification from latecomer
countries in the CEE are very rare (for
example, Chelcea, 2006). Physical upgrad-
ing of inner-city neighbourhoods first
became evident in the East German cities
where the regeneration of old residential
buildings has been significantly supported
by the central state (Bernt and Holm, 2005;
Glatter, 2007; Weiske, 1996). In these cities,
rents remained on a rather low level; conse-
quently, lower-income groups (for example,
students) continued to have access to the
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renovated dwellings and a radical displace-
ment of local population could not evolve.
Therefore, this process was labelled in the
literature as soft gentrification or con-
trolled gentrification (Wiest and Zischner,
2006).
Analysing the urban restructuring of
Hungarian cities, several studies had already
revealed by the 1990s that the basic precon-
dition for the gentrification process was the
mass privatisation of housing and the sky-
rocketing value gap in the old inner-city
neighbourhoods (Beluszky and Tima r,
1992; Kova cs, 1994). In these neighbour-
hoods, displacement of the sitting residents
took place with the active participation of
the local governments initiating local regen-
eration programmes; thus, the process was
labelled as organised gentrification (Boros
et al., 2010; Foldi, 2006; Janko , 2012;
Kova cs, 2009; Nagy and Tima r, 2012). The
role of neo-liberal urban policy was also
emphasised by Standl and Krupickaite
(2004) in Vilnius, where the Old Town
Revitalisation Programme launched in 1998
created favourable conditions in the inner-
city quarter of Uzupis for physical upgrad-
ing and a subsequent population change.
Gentrification in Uzupis was initiated by
artists at the end of 1990s (pioneer phase),
followed by the influx of better-off middle-
class families in the early 2000s.
Haase et al. (2012) found during their
on-site-research in two second-order post-
socialist cities, qo dz (Poland) and Brno
(Czech Republic), that displacement of
sitting residents did not occur in the inves-
tigated inner cities; however, they also
pointed out that the in-migration of
younger households, professionals and
students in these neighbourhoods intensi-
fied recently what could be the indication
of a forthcoming gentrification. They
called the group of new residents transi-
tory urbanites (Haase et al., 2012). In the
same vein, Marcinczak and Sagan (2011)
confirm that revitalisation and socio-
demographic change remained limited in
the inner city of qo dz (Poland) and con-
centrated only on buildings with clarified
property rights, good locations adjacent
to the main street and attractive architec-
ture. The authors labelled the sporadic
signs of upgrading in the inner city as
fac xade gentrification. Gentrification is
even more ambiguous in the capital city
of Romania. Chelcea (2006) argued that
informal and in many cases illegal transfer
of property rights is a key factor of gentri-
fication in downtown Bucharest, leading
to eviction and primitive accumulation.
Given the Janus face of gentrification
with strong local characteristics, some
scholars in the CEE are not even inclined
to apply the concept of gentrification to
post-socialist inner-city transformations
(for example, Haase et al., 2012; Sy kora,
2005). At the end of this paper, we turn
back to the issue of whether or not neigh-
bourhood change that has taken place in
downtown Budapest fits in with the tradi-
tional concept of gentrification.
3. The Framework Conditions of
Urban Renewal in the Inner City of
Budapest
The development of inner-city neighbour-
hoods in Budapest was substantially influ-
enced by the specific conditions that were
created by the post-communist transforma-
tion after 1990. Perhaps the two most
important factors with regards to urban
renewal were the reshuffle of the public
administration system and the transforma-
tion of the housing market.
In 1990, the return to self-governance in
Budapest also meant the introduction of a
two-tier administrative system and the sub-
sequent shift of power from city to district
level. The competence of districts was
URBAN RENEWAL IN BUDAPEST 25
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significantly strengthened. They enjoy a high
level of autonomy in implementing housing
and social policies, launching regeneration
programmes, drawing regulations plans, etc.
On the one hand, this political fragmenta-
tion of the city set up serious barriers as far
as the elaboration and implementation of
comprehensive urban development pro-
grammes are concerned, but on the other
hand, it also provided the districts with the
opportunity to try out and implement small,
area-based interventions. Indeed, the inner
city of Budapest became an urban laboratory
where numerous small, neighbourhood
initiatives have been experimented with
since the change of political system, resulting
in various forms of physical upgrading and
social change.
As Sy kora (2005) pointed out, with
regard to gentrification in post-socialist
cities, the most influential factors were
housing privatisation and rent deregulation.
In the case of Budapest, rent deregulation
did not have too much influence because of
the negligible role of the private rental
sector. However, the privatisation of the
public housing sector was pivotal in the
restructuring of inner-city neighbourhoods
(Hegedus and Tosics, 1994). In Budapest,
the privatisation of public housing meant a
give-away privatisation to sitting tenants at
a very low price. This practice, in addition
to no restrictions on resale of the dwelling,
made the privatisation of public dwellings
very attractive, especially those of better
quality and with more desirable locations
(Kova cs, 2009). However, there were at least
two negative effects of this practice of priva-
tisation. On the one hand, dwellings of sub-
standard quality often remained in public
ownership and the public housing sector
became gradually residualised. On the other
hand, since individual housing units were
sold to the tenants on a right-to-buy basis,
the outcome was very often mixed owner-
ship within the tenement buildings. This
made any kind of renovation in the build-
ings extremely difficult.
We can also say that in the first half of the
1990s both the legal and the planning frame-
works of urban regeneration were missing in
Budapest (Egedy, 2010). In addition, the
new local governments lacked the necessary
resourcesjust like the new owners of the
privatised dwelling stockto undertake
renovations, whereas the private sector had
hardly any interest in the renewal of residen-
tial buildings. From the mid 1990s, the legal,
planning and financial framework of urban
regeneration was gradually elaborated. In
1994, the Act on Condominiums solved the
problem of blocks of flats with mixed tenure,
giving them a firm legal status. In 1996, the
official urban regeneration programme of
Budapest was elaborated by the Budapest
municipality. From the late 1990s, financial
resources from other national programmes
(such as the social housing development pro-
gramme) could be used in urban regenera-
tion and, finally, after 2000 the private sector
also started to show growing interest in the
redevelopment of certain centrally located
inner-city neighbourhoods. These develop-
ments together led to the proliferation of
regeneration activities in the inner city of
Budapest after the turn of millennium.
4. Physical and Social Upgrading
in the Inner City of Budapest
after 1990
4.1 Research design
The following analysis is based on empirical
data collected in an international research
project focusing on the physical and social
transformation of the inner city of Budapest.
The main objective of the project was to
record the architectural and social aspects of
neighbourhood change in a comprehensive
manner and with regard to the existing
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concepts of gentrification. In addition to
empirical surveys, interviews with experts
were carried out to collect information
about the strategies and interests of different
actors (local government, investors, resi-
dents) in the process of neighbourhood
regeneration.
In July 2005, a mapping survey in inner
Budapest was performed (see Figure 1),
where the most important physical and
functional parameters of the building stock
were recorded. The survey covered 10 534
buildings of various types. This survey
enabled us to identify the intensity of dilap-
idation or renovation at the level of build-
ings, blocks and neighbourhoods.
Based on the results of our mapping
survey, seven smaller neighbourhoods were
Figure 1. The areas of investigation in the inner city of Budapest.
URBAN RENEWAL IN BUDAPEST 27
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identified where either signs of intense phys-
ical upgrading or functional changes hinting
at the presence of gentrification could be
observed. In these neighbourhoods, what we
may call core areas of regeneration, a
detailed questionnaire survey was carried
out among residents in 2006, focusing on
the renewal activities of households, their
residential mobility and housing prefer-
ences. In the seven neighbourhoods, 1234
households were randomly selected for the
survey out of which 503 were successfully
completed (41 per cent). To fine tune the
results of the questionnaire survey, in-depth
interviews with selected households were
also carried out to gather information about
the mobility and lifestyle of different house-
hold types.
4.2 Patterns of Physical Upgrading
Renewal of buildings. In the mapping
survey, visible signs of renovation and new
developments were recorded (the quality of
the fac xade, new window frames, etc.) for
each building. Table 1 summarises the
extent of renewal of residential buildings in
the survey area. For the sake of analysis, we
refer here only to data for buildings which
have a predominantly (over 50 per cent)
residential use. According to our survey, 6
per cent of the buildings were built and a
further 28 per cent have been fully reno-
vated in inner Budapest after 1990. This
means that about one-third of the building
stock was affected by some kind of physical
renewal in the post-communist era. If we
also add those cases where the fac xade was
completely renovated (major renewal),
the intensity of renewal activity is over 40
per cent in the entire inner city.
Analysing the spatial pattern of regenera-
tion, concentrations of high- and low-level
renovations can be identified (Figure 2).
Upgraded areas indicated on the map can
be classified into two groups.
On the one hand, there are traditional
high-status areas of the city centre (CBD)
where the value gap is highest. These neigh-
bourhoods were affected mostly by sponta-
neous (market-led) renewal, where the main
actors have been local residents, as well as
foreigners. According to real estate experts,
the emergence of a considerable demand
from foreign citizens in the local housing
market dates back to Hungarys accession to
the European Union (2004). As a result of
the unlimited right of EU citizens to obtain
property, the Spanish, British and Irish were
the first to invest massively in housing in the
inner-city quarters of Budapest. To this
group of foreigners, we should also add
Table 1. The intensity of revitalisation of residential buildings in the survey area, 2005
Physical renewal of residential buildings (fac xade and windows) Valid cases Percentage
New construction Built after 1990 482 6
Full renewal Fac xade and windows completely renovated 2393 28
Major renewal Fac xade completely, windows partly renovated 568 7
Partial renewal Fac xade not, but windows are renovated 2882 33
or
Windows not, but fac xades are renovated
Limited renewal No renovation on fac xade, windows partly renovated 961 11
No renewal No signs of renovation of fac xade or windows 1429 16
Total 8715 100
Source: mapping survey, 2005.
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expats and well-paid professionals of trans-
national firms working in the city centre
who prefer to live close to their workplace
(Foldi and Van Weesep, 2007).
On the other hand, an extensive upgrad-
ing process has taken place beyond the arc
of the Grand Boulevard, in certain parts of
Ferencva ros (district IX) and to a lesser
extent in Jo zsefva ros (district VIII). In
these originally working-class neighbour-
hoods, the main reason for the upgrade
was the implementation of state-led regen-
eration programmes in the 1990s. The ear-
liest and perhaps most successful urban
regeneration programme in Budapest was
launched in Middle Ferencva ros in 1992.
It was designed according to the French
SEM model (Societe dE

conomie Mixte) as
a publicprivate partnership (PPP) set up
by local government (with 51 per cent of
the shares) and a HungarianFrench con-
sortium of investors. In a similar vein,
Jo zsefva ros (district VIII) started to imple-
ment its regeneration policy in 1998 and
set up a share-holding company called
Rev8 to organise urban renewal in a spe-
cially designated area of the district.
However, there are also distinct areas in
the inner city of Budapest where no or
hardly any sign of renovation could be
identified over the past two decades. These
are typically old working-class neighbour-
hoods with multistorey tenement blocks in
the eastern periphery of the inner cityfor
example, Erzsebetva ros (district VII).
The level of renovation also shows
marked variations among our case study
areas. The ratio of newly built, or since
1989 completely or largely renovated, resi-
dential buildings was clearly the highest in
the SEM IX area (77.8 per cent), whereas in
the Theatre Quarter only one-fifth of the
building stock fell into this category. We
assume that higher levels of regeneration
would also entail higher levels of popula-
tion displacement (i.e. gentrification) in the
case study areas.
Housing tenure and renewal of
dwellings. Our questionnaire survey shed
Figure 2. The spatial pattern of residential renewal in the inner city of Budapest.
URBAN RENEWAL IN BUDAPEST 29
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light on the age, tenure and quality of
housing in the case study areas. The over-
whelming majority (83 per cent) of the
housing stock was built before the political
changes, and even before World War I.
However, the 17 per cent share of new
housing constructed after the change of
regime is also considerable. We can also
add that a disproportionately large number
of newly constructed dwellings were com-
pleted after 2000.
Our survey showed that owner-
occupation is the dominant tenure type
both in the old and new housing stock.
Altogether, 80 per cent of the dwelling
stock is owned and inhabited by private
persons in the case study areas. A typical
post-socialist phenomenon is the high
share (43 per cent) of households who
acquired their apartment in the process of
privatisation. With regard to the rental
sector, we can observe a balance between
the private and public rental sectors (10 per
cent each), which is the logical outcome of
privatisation, on the one hand, and the
development of a market-based rental
sector since the political changes.
The dynamics of the local housing market
are reconstructed in Figure 3. As shown, two
peaks of housing transactions can be distin-
guished in the post-communist period. The
first boom can be linked with the privatisa-
tion of the public housing sector at the begin-
ning of the 1990s; while the second boom
evolved in the early 2000s and was generated
by the secondary transactions of old dwell-
ings and the sales of newly built ones.
In two case study areas, the regeneration
process could be attributed predominantly
to new construction: in the Rev8 area in dis-
trict VIII and in the SEM IX area in district
IX. Both areas belonged to the most dilapi-
dated inner-city slums of Budapest before the
political changes, that became targets of state-
led regeneration programmes in the 1990s.
The newly built dwellings in these neighbour-
hoods are in general 4080 square metres in
floor area, with high levels of comfort, attrac-
tive typically for younger households but not
so much for the wealthiest sections of society
(Berenyi and Szabo , 2009).
Since 1989, the renewal of the old dwell-
ing stock has also intensified in the surveyed
areas. Our results demonstrate that a
Figure 3. Housing transactions in the core areas of revitalisation.
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significant part of the old housing stock has
been largely (30 per cent) or partially (59
per cent) renovated since 1989. This also
hints at the strong presence of incumbent
upgrading. Only 11 per cent of the old hous-
ing stock has not been affected by any kind
of renovation or just to a very limited
extent. The level of renovation is generally
the highest in that segment of the owner-
occupied housing stock that was obtained
by purchase in the free market. At the same
time, the level of renovation is significantly
lower in the residual public housing sector.
The role of local policies in urban
regeneration. The chances of regenera-
tion as well as its actual level depend very
much on the local policies of districts in
the inner city of Budapest (Foldi, 2006). In
this respect, the size of local public housing
stock, the quantity of available vacant plots
and brownfield sites where the local govern-
ment could initiate new housing projects,
just like the geographical location of the
quarter and its architectural quality, have
played an important role. On the basis of
interviews with local experts, we could iden-
tify three distinct groups among the districts
according to the local regeneration strategies.
An active strategy for urban regenera-
tion. We can find active urban regeneration
strategies in two districtsFerencva ros
(district IX) and Jo zsefva ros (district VIII).
These two districts were among the first to
formulate clear strategies for the regenera-
tion of their run-down neighbourhoods and
set into motion large area-based regenera-
tion programmes during the 1990s, provid-
ing a laboratory and also best practices for
Budapest and beyond. In both districts, a
large part of the public housing stock
remained in state (district) ownership pro-
viding local government with more room
for intervention. In addition, both districts
were rich in vacant plots which made large-
scale regeneration easier. These two districts
established special regeneration companies
on a PPP basis in the 1990s that took
responsibility for and co-ordinated the pro-
cess of urban renewal.
A limited support for urban regenera-
tion strategy. In other districts, the
regeneration/renewal process was less sys-
tematically organised; nevertheless, it has
been in one way or another supported by
the local government. A good example is
the Theatre Quarter (district VI) where
the upgrading was enhanced by local infra-
structure development (reconstruction of
street surfaces and the development of
pedestrian zones) and the promotion of
local cultural institutions in order to
increase the attractiveness of the neigh-
bourhood. In Middle Terezva ros (district
VI) a public programme was launched for
the renovation and conversion of lofts.
Through the sale of unused attic areas in
blocks of flats for private investors, housing
condominiums could acquire a good income
that was used for the renovation of the rest
of the building. In the Bar Quarter in dis-
trict IX, the development of a bar and restau-
rant quarter was enhanced by the increasing
flow of tourists to Budapest and the growing
demand for catering facilities. The develop-
ment of the catering and tourism industry in
the neighbourhood brought about additional
investments in housing, whereas the local
government supported the upgrading of
public spaces, such as the renovation of road
surfaces, pedestrianisation. The aforemen-
tioned examples are located typically in
neighbourhoods with better-quality housing
and the renewal of buildings is performed by
individual condominiums.
A hands off approach. The attitude of
other districts with regards to regeneration
URBAN RENEWAL IN BUDAPEST 31
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is rather passive and relies very much on
the market. This fits well with the
Southern City Area in district V, where
retail and business development leading to
commercial gentrification is the main
priority of local government as opposed
to the renewal of residential buildings.
Despite its relatively good opportunity for
intervention, the attitude of district VII
(Erzsebetvaros) has also been characterised
by a hands-off approach. Our case study area
in this district was the Jewish Quarter. Local
government here followed a very liberal lais-
sez-faire urban policy and provided great
opportunities for investors. During the
1990s, the vacant sites gradually disappeared
in the neighbourhood; first they were built
up with office, and later with residential
buildings. By the early 2000s, hardly any
empty plots remained for new construction;
therefore, demolition of existing buildings
started. In this process, several buildings with
great architectural value were torn down and
subsequently the architectural milieu, just
like the social profile of the whole neighbour-
hood, changed dramatically.
4.3 Social Change and Population
Displacement
The results of our survey showed that long-
term residents in the meantime became
only a minority in the selected neighbour-
hoods, 42 per cent being in situ before
1989. New constructions, secondary trans-
actions and rented dwellings provided the
basis for population change in the inner
city of Budapest. This process clearly inten-
sified over time, as only 20 per cent of the
households moved to their present dwelling
between 1990 and 2000, and another 38 per
cent in the short period of 200006. The
increasing number of new arrivals and the
extremely low vacancy rates indicate the
growing speed of population change in the
investigated neighbourhoods.
However, the massive displacement of
long-term residents, so much criticised in
the Western gentrification literature, has
been limited in the inner city of Budapest.
More displacement occurred in the offi-
cially designated areas of urban regenera-
tion where exensive demolitions also took
place. In the SEMIX area, some 70 per cent
of residentsand in the Rev8 area, 44 per
centmoved to their current dwelling
between 2000 and 2006. Tenants of public
dwellings could be displaced in two differ-
ent ways: either the district government
offered the tenants three possible rental
choices (not always in the same district or
even in Budapest) and they had to choose
one of them; or, they were offered a cer-
tain amount of compensation money and
upon acceptance they had to resign their
tenants rights. The overall level of forced
displacement has been relatively low and it
was concentrated mainly in the areas of
state-led regeneration programmes (orga-
nised gentrification). In other areas, the
predominance of the owner-occupied
sector, the subordinated role of new con-
struction and the levelling-out policies of
local governments were able to prevent
massive displacement.
Like most of the authors on post-socialist
gentrification (Standl and Krupickaite,
2004; Kabisch et al., 2010; Marcinczak and
Sagan, 2011), we use socioeconomic indica-
tors to detect the directions of social trans-
formation in our neighbourhoods. First, we
concentrate on those households (38 per
cent) who moved to the area between 2000
and 2006. These households comprise
mainly young people, predominantly under
40 years of age. They are often single-person
households, young couples with or without
children, and flat-sharing communities,
which is otherwise uncommon in Budapest.
Many of them resemble, thus, the transi-
tory urbanites class described by Haase
et al. (2012).
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The income level of newcomers is defi-
nitely higher than the long-term residents.
The share of households with above-average
income is only 7 per cent among long-term
residents, whereas it is 24 per cent among
the newcomers. Similarly, the share of
households with below-average income is
much higher among the long-term resi-
dents (Figure 4).
Taking into account the level of educa-
tion, we found that the ratio of graduates is
significantly higher amongst recent arrivals;
the ratio of households with at least one
member holding a university or college
diploma is 51 per cent in the group of new-
comers and only 33 per cent among the
long-term households. Our data thus reflect
the process of rejuvenation and social
upgrading in the selected neighbourhoods.
However, we can also note that many of
the newcomersi.e. first-time buyers, who
have moved to the core areas of regenera-
tion recentlyhave relatively moderate
incomes. It means that access to the
Figure 4. Household composition according to the year of arrival and income level.
URBAN RENEWAL IN BUDAPEST 33
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renovated neighbourhoods has been possi-
ble not only for higher-income groups, but
also for less affluent households. Since the
quality and size of the housing stock became
more heterogeneous in these neighbour-
hoods, partly because of renovations and
partly due to new construction, the socioeco-
nomic profile of local residents has also
become more mixed over the past two
decades.
The idea of creating more socially mixed
neighbourhoods has been high on govern-
mental agendas in the West (van Kempen
and Bolt, 2009); however, there has been
no sign of deliberate mixing policy in CEE
cities, yet. One of the unintended results of
the mushrooming of regeneration activities
in inner Budapest waswithout any delib-
erate policy backgroundsocially more
mixed communities. Recent critiques ques-
tion the positive effects of gentrification on
social mix, emphasising that gentrification
normally leads to social segregation, social
polarisation and displacement (Lees, 2008).
This is certainly true if gentrification takes
place in socially homogeneous low-income
areas. Yet the neighbourhoods we studied
were rather heterogeneous even before the
renewal activities, a path-dependent feature
of inner Budapest rooted in the communist
and even pre-communist periods. Critiques
are also made that, instead of the develop-
ment of social cohesion, gentrification can
create social tensionsespecially when
there are marked economic, social and cul-
tural differences between residents (Lees,
2008, p. 2456). This is not the case in
Budapest; at least, we could not find any
hard empirical evidence for local tensions
in our neighbourhoods.
Recent studies have also discussed the
connection between social mix and social
cohesion at the neighbourhood level (van
Kempen and Bolt, 2009; Musterd and
Andersson, 2005). The concept that better
social mix increases social cohesion has
been heavily criticised (Lees, 2008). Our
findingseven though measuring social
cohesion was not an explicit goal of our
surveyalso show that social interactions
were more intense and social networks
were more developed in neighbourhoods
where population change and social mixing
took place more slowly.
Taking into account the traditional class
categories in the gentrification literature,
we can confirm the presence of gentrifiers
in Budapest, especially in those neighbour-
hoods where the reconstruction of old and
the construction of new housing com-
menced hand-in-hand (new-build gentrifi-
cation). These are especially the SEMIX
and Rev8 areas among our neighbour-
hoods. Nevertheless, the group of pioneers
is much more dominant among the newco-
mers in the whole survey area. Whether
they constitute a transitory population
(transitory urbanites) who would be later
replaced by gentrifiers is more than doubt-
ful. The functioning of the local housing
market and the size of the owner-occupied
sector suggest that, despite intensifying
regeneration and subsequent population
change, the inner-city areas in Budapest
will retain a relatively heterogeneous popu-
lation in the future.
5. Conclusions
Regeneration of old inner-city neighbour-
hoods has been a spectacular phenomenon
in Budapest over the past two decades, with
regard to both its social and physical
dimensions. It is remarkable how neigh-
bourhoods that were affected by a dramatic
disinvestment and social decline during
communism have been undergoing gradual
social and physical upgrading due to
intense reinvestment. In this process, in
addition to the renovation of old buildings,
the construction of new residential enclaves
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has played an important role. As Neil
Smith (1996, p. 173) noted, Budapest pro-
vides a laboratory for examining the inter-
connected parries of supply and demand,
the impetus of production-side and
consumption-side forces in the genesis of
gentrification.
Research questions formulated in the
introductory section of this paper can be
answered in the following way. As our case
study neighbourhoods have shown, gentrifi-
cation is present in downtown Budapest in
many different ways ranging from commer-
cial gentrification and fac xade gentrification
to more traditional (Western) variants of
gentrification. Our results thus contradict
Sy koras previous findings, based on the lit-
erature of the 1990s, denying the presence
of true gentrification in inner Budapest
(Sy kora, 2005, p. 103).
The most relevant factors of neighbour-
hood change in the inner city of Budapest
can be summarised as follows
the capitalisation of the land and hous-
ing markets, a radical shift from public
to private ownership and a concomitant
rise in land and housing prices;
the growing presence of international
corporate investors and property develo-
pers integrating the city into global
capitalism;
the diverse and relatively ambitious
urban regeneration policies of the inner-
city districts, with some EU and national
government support;
the growing size of the new middle
classes with inner-city-orientated resi-
dential preferences and lifestyles, as an
outcome of post-communist social
restructuring and class formation;
the readiness of long-term residents to
invest in the renovation of their dwell-
ings acquired during the privatisation
process, as a kind of incumbent
upgrading.
Considering the social aspects of renewal,
we can conclude that urban regeneration
and upgrading in the formerly run-down
neighbourhoods of Budapest are taking
place in a smooth manner. Massive displace-
ment, evictions or social tensions among
residents could not be demonstrated (Lees,
2008). This is mainly due to the large size of
the owner-occupied sector and the social
responsibility of local governments. External
private investors have had only a limited
access to the housing stock in our research
area. If we understand gentrification as a
process of upgrading, where up-market
housing with high-status residents becomes
dominant in a formerly lower-class neigh-
bourhood, it is typical in downtown
Budapest only in those areas where new
housing construction took place due to
demolition or the regeneration of brown-
field sites. The old housing stock was less
affected by the process of gentrification.
Therefore, gentrification in the traditional
sense can be pointed out in the inner city of
Budapest geographically only in smaller
areas (such as the SEMIX and Rev8 areas).
More typical is the development of inner-
city quarters towards a more heterogeneous
pattern both in terms of the quality of the
housing stock and the social status of resi-
dents. There are not only elite gentrifiers and
alternative pioneers who contribute to the
upgrading process, but also ordinary house-
holds who prefer inner-city residential loca-
tions and follow an inner-city-orientated
lifestyle. The renovation of the building
stock is carried out not only by newcomers,
but also by those who have been living in the
area for a long time. All these can be related
to the specific pathways of post-socialist
cities retaining socially relatively mixed
inner-city communities.
There is a clear similarity between the
development of inner-city quarters in
Budapest and the upgrading processes of
East German cities where the drastic
URBAN RENEWAL IN BUDAPEST 35
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displacement of sitting residents could not
evolve; therefore it was labelled as soft
gentrification (Wiest and Zischner, 2006).
However, the gentrification process taking
place in Budapest is soft not because of
the high vacancy rate in the rental market
and extensive public investments, like in
East Germany, but mainly due to the
extreme weight of owner-occupation and
certain control of the districts local gov-
ernment. Our examples also demonstrate
that the regeneration of neighbourhoods is
dependent very much on local conditions.
The regeneration of downtown Budapest
will undoubtedly continue in the future and
the islands of gentrification will most proba-
bly expand further, pushing the gentrifica-
tion frontier outward. However, despite the
growing pressure of gentrification, it can be
assumed that under the given circumstances
the building stock will remain heteroge-
neous in inner Budapest and a healthy social
mix will persist in the years ahead; thus, no
aggressive gentrification can be expected.
We also envisage that the regeneration of
inner-city neighbourhoods in Budapest will
result in a pattern that we may call localised
gentrification, which means that, due to the
intervention of local governments, the pro-
cess will be kept under public control. The
geographical results of all this remain to be
seen.
Funding Statement
This research was supported by a grant from the
Deutsche Forschungsgemeinschaft (DFG).
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