1.5 million Hungarian people live in pauperage

According to Pénzcentrum.hu, millions of Hungarians live in damp low comfort-level homes, and they cannot afford renovation. 80 percent of the 4.4 million residential real estates in Hungary are insufficient regarding modern engineering and energetics criteria. This means that most Hungarians live in different levels of housing poverty and there is no way out. The several smaller problems that the housing poverty consists of creates a vicious circle that affect low-income households the most.

Not only homeless people and run-down neighbourhoods far from Budapest are troubled. This year Habitat for Humanity Hungary has shown its seventh annual report concerning housing poverty.

It came to light that two-to-three million people in Hungary live in different types of housing poverty and the position of tenants is also very unreliable.

1.5 million people live in houses with serious quality issues.

People living in these crowded and damp homes do not have enough money to afford repairs. From the 4.4 million residential real estates in Hungary 80 per cent are under the modern engineering and energetics benchmarks, meaning that the cost of accommodation for most Hungarians and their quality of life are negatively affected by the physical attributes of their homes.

Every third household has wealth issues concerning their housing. This means that they need to spend an irrationally large amount of their salary on overhead, rent, or loan. These significant expenses then lead to debt. Currently, 1.4 million (approximately one-third of the) households have taken out some type of loan, at least 13 per cent of the homes have arrears that are over 60e days, while 750 000 enforcements are being in progress. The amount of these enforcements are as much as 7 per cent of the annual GDP of the country. In the light of these facts, it is understandable why there is almost a dozen eviction daily and why we still cannot declare the (foreign currency based) loan-crisis issue settled – as announced at the presentation of the Annual report.

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The report of Habitat for Humanity deems those households having housing poverty that have either affordability or quality issues, are below the average energy-efficiency, or are areally or legally more impaired or vulnerable than average households. Usually, a family living in housing poverty befits more of these criteria at once.

Conservative approximation, therefore, suggests that 2-to-3 million people live in housing poverty across the country, meaning that they experience (m)any of the issues mentioned above.

There is no way out of this vicious circle

The main statement of the 2018 report – like previous ones – is that the housing crisis in Hungary only deteriorates. Alongside this issue, the quality of available homes is very poor, while the energy-efficiency and overhead-price issue in correlation create the biggest obstacle. Although the government has spent more on housing problems in the last few years than previously, it mainly had an impact only on middle-or higher-class households. Unfortunately, the support, which is not based on neediness, is nine times higher than the one concerning social basis.

It is important to note that several smaller problems together create a vicious circle that we may call the trap of housing poverty. Those who are born into it or fall into it have a really hard time getting out.

Lower income, in other words, more impoverished households are disadvantageous in several dimensions. Issues relating to energy-efficiency affect them more deeply, the probability of such households located in areas of the country where certain quintessential services are unavailable is much higher, and they are legally more vulnerable compared to other homes.

This trap also creates a spatially visible pattern as well. While the inner districts of Budapest and other bigger cities, as well as the holiday areas, show an increase in value, tens of thousands of people are trapped in the periphery, and hundreds of thousands of other people are cornered into the sparse countryside.

The relevant data for the first half of 2017 and 2018, as well as our own experience, show no positive change concerning how the government tackles problems connected to housing. The intent to create a comprehensive policy to mitigate social differences is yet to be seen, and the coordination of the housing issues between several departments is also insufficient – as stated by Zsolt Szegfalvi, the Executive Director of Habitat for Humanity Hungary

There is no sign of engaging with problems leading to homelessness, neither any sign of raising national resources to support in need on a social basis.

In 2018, the lack of country-wide preventative measures and the lack of a well-established social welfare system can more easily lead to the loss of people’s accommodation in certain situations such as divorce, accumulated debt, temporary health issues or unemployment, than in the previous years. In Budapest or other big cities, gaining someone’s housing back in such financial states is even more challenging. – he added.

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People cannot afford modernisation or even heating

It is estimated that by the energy-efficient modernisation of residential buildings, Hungary’s power-consumption could be cut by one-sixth – as stated during the opening of the presentation.

On major flaw of dealing with energy-related issues is that in 42 per cent of Hungarian households and three-quarters of the homes in smaller settlements people still use wood for heating (this proportion has risen over the years), and they also use outdated equipment.

The air pollution caused by the non-adequate heating equipment is responsible for approximately 19 per cent of the loss of the amount of Hungary’s GDP by inducing several types of healthcare problems. Heating can also cause significant affordability problems, as it takes up most of the overhead expenses, which can be difficult for many people to pay for (for example, the price of wood has steeply risen over the past few years).

Renting prices are also in the sky

One of the highlighted issues of this year’s report is the lower segment of underlease housing. Between 2010 and 2016 the costs of renting a house have increased by 75 per cent and the increase is not yet stopped.

The average price of smaller flats is even higher. In 2010 a 30 square metre flat cost about 45,000 forints a month, nowadays, the same flat costs around 85,000.

In the meantime, the income of the people with the lowest 10 per cent of salary has not increased by this rate.

In the lowest tenth, the yearly average income of a person between 2010 and 2016 has only increased by 11.4 per cent, but the renting prices have increased by 75 per cent.

These are people who would need an affordable and permanent housing instead of renting market-price accommodation. Lacking such housing, these people will eventually turn to temporary shelters or institutions, or, in the worst case, they might be trapped in an “extortionate-subtenancy”. It has become widespread that the targets are lower-class people who are offered a relatively small room for steeply high prices.

Those who are trapped in “extortionate-subtenancies” or worker’s hostels pay around 45-105,000 forints for a bed or a small room – said Kata Ámon, one of the authors of the Annual report. To the reporter’s questions, she replied that these people have a net wage of about 95,000 forints. This means that nearly half of their wage is paid out for accommodation if we count the lower end of the spectrum. She also stated that she does not know the average renting prices as she can only tell prices from her individual interviews.

Habitat for Humanity’s findings show that instead of the usually inhumane living conditions of such alternative housings, a well-aimed sub-lease aid or a well infrastructured social housing program would be the sustainable solution to the problem in the long run. Besides this, they also think that reforming the support for wood fuel and the need from the government to help to settle small-value debts is also very important.

Instead of small fixes, we need a comprehensive solution – Zsuzsanna Pósfai, editor of the Annual report.

translated by Péter Licskay

Source: Pénzcentrum.hu