The Airbnb ban didn’t stop them: Budapest’s largest condo finds a loophole!

The referendum to ban Airbnb in Terézváros has brought significant changes to local accommodation services, particularly in the Central Passage condominium. Residents and property owners in the building are adapting to the new regulations with innovative solutions that are set to impact the district’s tourism industry and community dynamics.
Situated between Király Street and Paulay Ede Street, the Central Passage condominium was built in the mid-2000s. The seven-storey, 270-apartment complex was developed by a Spanish company that went bankrupt following the 2008 economic crisis. The building then experienced a prolonged period of stagnation until the early 2010s when property service companies began to emerge.

Over time, one company acquired the vacant retail spaces and part of the car park, assets which have since become central to the operation of accommodation services. Today, most of the apartments are operated by 7Seasons Apartments, which has established a reception in the building and has extensive experience in the short-term accommodation market.
The Airbnb situation in Terézváros
In autumn 2023, residents of Terézváros voted in a referendum to ban Airbnb and similar services in the district. This decision posed a significant challenge for Central Passage, where more than 88% of apartments were used for private or other short-term accommodations. Under the ordinance, owners were faced with a choice: cease offering accommodation or convert their properties into commercial accommodations.
In early 2024, Central Passage’s owners convened a general meeting, where the majority voted to continue using the apartments as Airbnb accommodations. This decision necessitated several adaptations, including installing a fire alarm system, operating a reception, and providing breakfast for guests. A large majority of owners supported these changes, enabling the complex to comply with the stricter regulatory framework.

Tamás Soproni, Mayor of District VI, recognised the unique position of Central Passage, as reported by 24.hu. He noted that the building exemplifies how a condominium can comply with the stringent regulations for commercial accommodations. However, he emphasised that similar transformations would be unfeasible in other traditional apartment buildings in the district, primarily due to inadequate infrastructure.
The new regime poses challenges not only for accommodation providers but also for local communities. The experience of Central Passage underscores the difficulties many condominiums face in meeting the requirements for operating commercial accommodations. This has inevitably led to disputes among residents and shifts in business models.
The example set by 7Seasons Apartments and other operators demonstrates that adaptation is possible despite strict regulations, albeit under specific conditions. This new model could have a lasting impact on the district’s tourism image and housing conditions. Constructive dialogue among stakeholders and the sharing of experiences may prove crucial in mitigating further conflicts. The case of Central Passage illustrates how a community can innovate and adapt to change while navigating the challenges of an urban environment.
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