Budapest may hike parking fees again: New data reveals parking fixes didn’t stick
For many years, Budapest’s city centre has struggled with overcrowded streets where pedestrians have little space left. This is not because of the influx of people from the suburbs, but because of the locals themselves: many have asked for parking permits (previously almost free) for several cars, while parking spaces are scarce. Therefore, public spaces have essentially become huge, overcrowded open-air garages.
In the autumn of 2024, several districts decided to make residential parking more expensive and to end the generous subsidies they had been offering. According to Telex, they also introduced a charge for the first car, and typically a much higher charge for the second. The idea seemed logical: if you have to pay more, fewer people will keep a car on the street. The first reports were encouraging: there was a 20-50% reduction in the number of licences, but the figures later showed a more mixed picture.
Csaba Tóth of the Clean Air Action Group has carried out a thorough analysis of the impact of the fee increases on the number of parking permits. It turns out that, although there were reports of a big drop at the beginning of the year, a few months later, these results have been considerably reduced. For example, in District II of Budapest, the previous 22% drop was reduced to 16%, and when compared to the same month last year, the drop was only 4%.
The effect of the fee increases
Experience shows that the impact of a fee increase may not be sustainable in the long term. In Józsefváros, for example, the sharp drop in the spring of 2023 has almost disappeared in a year, with the number of permits returning to near previous levels. This means that if the aim is indeed to permanently reduce parking in the city centre, the current fees of a few tens of thousands of forints (i.e. HUF 10,000–90,000 / EUR 24.87–223.89) are not enough.
According to Tóth, many people have given up their permits because they did not store their cars in the districts anyway, but it was “worth it” for a few thousand forints (e.g. HUF 3,000–5,000 / EUR 7.46–12.44) to be able to park on the street at any time. So it was not the cars of those who actually used on-street parking on a daily basis that disappeared, but rather those who had previously stored their cars elsewhere, so congestion in public spaces did not decrease as much as the number of permits.
The unfairness of subsidies
Several districts are trying to encourage people to give up parking in public spaces by offering various subsidies. For example, District II offers a BKK voucher worth HUF 100,000 (EUR 248) to those who do not apply for a new permit. Terézváros has gone even further: it offers a discount of more than HUF 300,000 (EUR 746) per year for parking in a car park. However, these subsidies often go to those who have previously made the parking problem worse, so the question is: how fair is this?
Tóth’s analysis also showed that many districts still provide generous subsidies for company cars, which are often high-value vehicles and often used by senior executives. Therefore, the companies indirectly benefit from public money, while these cars are partly the source of the problem. Although some districts have tightened up on this practice, in many places, a substantial discount is still available.
Extra revenues and further fee increases
The increases have certainly brought in extra revenue: up to HUF 122–540 million (EUR 303,487–1,343,284) more per district. However, none of the local authorities have reported on how these funds are being spent. The money could be used to improve cycle paths, plant trees, or support car sharing; the latter could be particularly important, as a car share could replace up to 10–15 cars owned by the same person.
The current data show that if a district does not increase the fee, the number of permits will increase, and with it, the number of cars parked in public spaces. If they increase slightly, the result is moderate. However, if there is a real increase, a substantial reduction can be achieved, although not always permanent. Long-term results will require not only an increase in charges but also a major boost to public transport and car sharing.
The parking reform in Budapest’s inner districts is neither a complete failure nor a success story. In some cases, fee increases have produced results, especially for second cars. But these effects are typically not strong enough and not always lasting. Moreover, the current subsidy system often favours the well-off. Real change requires deeper reforms, fairer subsidies and more transparent use of revenues.
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