In Hungary, tenants of private rental housing are exposed to significant tenure insecurity and unaffordability. Since 1993, private leases are loosely regulated by the state, and many tenancies, informal ones not based on a written contract, are not even subject to the Housing Act. As a result of wide-spread informality and loose regulation, tenants often lack protection from eviction, overcharging or rent increase. As the share of private tenants among people with the lowest income is high, in 2016, Habitat for Humanity Hungary decided to address this issue in its BlackFlat campaign, run in the framework of Solid Ground.
As a result of the give-away privatisation of the former public housing stock to sitting tenants after the regime change, around 90 percent of Hungarians now live in owner-occupied housing. However, as years of housing privatisation passed, so did access to an owner-occupied dwelling or a social housing unit become harder for the population, increasing the proportion of people living or planning to move into private rental housing. Despite increasing demand, Hungarian private rental sector is still characterised by very low security of tenure.
Since the regime change, housing lease is loosely regulated. The law on lease of apartments in effect since 1993 leaves the definition of conditions of lease to the agreement of the landlord and the tenant, makes the conditions of long-term lease unfavourable and does not duly define landlord’s and tenant’s rights and obligations with respect to the maintenance and renovation of the dwelling – an issue that is crucial in disputes about deposit refunding. In addition, authorities do not effectively control the sector, therefore renting without a contract is very widespread and a large share of tenants are not even subject to the weak protection of the housing law.
In recent years, insecurity problems in the private rental sector have been coupled with an affordability crisis. In major Hungarian cities an unprecedented price increase took place, yet due to the high share of concealed leases such changes could not be properly tracked by official statistics.
Poor people’s exposure to the consequences of an unregulated private rental and the very small share of the social housing sector put Habitat Hungary on a quest to improve the regulation and affordability of rental housing. As a first step, in the absence of reliable data about the private rental market, Habitat took the initiative in finding data sources on housing rents. With the expansion of internet access, more and more people advertise their flats to let on online market places, however, no detailed country-wide analysis of data collected by online market places had been published. Habitat Hungary established a partnership with Schibsted Media Inc, operator of one of the largest online marketplaces for rental housing, hosting more than 800 thousand rental ads in the past 6 years. Based on data provided by Schibsted, we could identify and visualise an extreme 140% rent increase in Budapest between 2011 and 2016, and a 30-70% rent increase in Hungary’s other big cities.
As a second step, Habitat Hungary sought to promote solutions to the problem by summarizing the main problems of the local private rental sector and launching research to gain detailed knowledge about the most relevant international policy practices that contribute to making rental housing more secure and affordable. Researchers have looked through policies of around 15 countries and finally examined private rental housing policies of 6 countries in detail using sources accessible online and conducting interviews with housing experts of the respective countries. Among the best practices examined was the Irish Residential Tenancies Board that provides out-of-court dispute resolution for tenants and landlords, and the Italian tax incentive system increasing the supply of secure and affordable rental housing in a country with a very small social rental sector and high share of informal leases. Non-profit housing associations were evaluated as organisations that, after significant financial support or loan in the first years of their operation, are able to operate independently from the state and can provide social housing cross-financed from market renting to higher-income social groups. In addition, the model of community land trusts was selected as an interesting and popular initiative that combines the features of owner-occupied and public housing. Results of the research were published in a volume launched with the participation of Hungarian housing experts.
In April 2017, based on preliminary results of the research, Habitat Hungary launched the BlackFlat petition campaign around 3 policy demands: (1) more detailed definition of landlords’ and tenants’ rights and obligations, (2) fostering long-term and affordable lease by tax incentives, and (3) establishing the regulatory framework for the operation of non-profit housing associations and community land trusts.
The BlackFlat campaign’s name and design referred to the black character of the private rental market with a high share of unregistered leases and bad “visibility conditions” for tenants (but also landlords) in this sector regarding their rights and responsibilities. As part of the campaign, a webpage with a conspicuous black design was set up where not only the petition could be signed but also the problem was presented via interactive maps and diagrams, and descriptions of different aspects of the housing problem. To reach people in the Hungarian media dominated by government-funded outlets, generally not reporting about independent bottom-up initiatives with goals different from those of the government, it was crucial to reach people online. As a result of an online ad campaign and outreach through mass media, the petition has been supported by 6400 people.
Although the petition was submitted to the Ministry of the National Economy in June 2017, the campaign has not ended completely. Through this year’s Solid Ground advocacy grant, Habitat Hungary is working to transform its policy recommendations into a concrete proposal for the amendment of the housing law and continues to inform the public about the problems of the private rental sector and potential solutions.