Hungarian government to spend huge amounts on worker housing

The Hungarian government is launching a HUF 20-billion subsidy programme for the construction of workers’ housing, the Hungarian News Agency (MTI) reports, citing a statement by the Ministry of National Economy. In the next few years, 25-30 new workers’ accommodation for 80-200 people could be built with the Hungarian government’s support. The ministry says they are not being built for foreign guest workers.

Hungarian government launches subsidy scheme

A HUF 20-billion subsidy programme is being launched for the construction of workers’ housing, MTI reports, based on a statement by the Ministry of National Economy. In the next 3 years, 25-30 new workers’ shelters for 80-200 people could be built with the Hungarian government’s support. Businesses have until 30 September to apply for funding, Forbes reports.

Xanga Seria Ltd.’s new 200-bed workers’ hostel in Nyíregyháza on the day of its inauguration, 27 June 2023. The workers’ hostel was built with a budget of HUF 1.5 billion, with around 50 percent Hungarian state support. MTI/Vajda János

The Hungarian government pledges that applications will be assessed under strict criteria “in line with the strict limits on the employment of guest workers”. These conditions include the following:

• foreign workers can only be accommodated in the newly created worker hostels if no Hungarian workers apply;
• at least half of the workforce in these accommodations will have to be Hungarian, which the ministry expects will “greatly facilitate the mobility of the domestic workforce within the country” and contribute to reducing labour shortages.

Sanctions against workers’ accommodations

According to Telex, if the proportion of Hungarian workers falls below 50% during the application period, the owner must repay part of the subsidy. Sanctions would also be imposed on accommodation establishments whose occupancy rate falls below a certain level. In addition, the applicant must commit to operating the accommodation built with the subsidy as a workers’ accommodation for at least 10 years. However, compared to previous similar applications, it is now possible to accommodate trainees, casual or seasonal workers.

Telex reports that new hostels may be needed because despite the fact that the “anti-immigration government does not advertise this much”, more and more foreigners are working in Hungary. In November 2023, a total of 98,500 foreigners were employed in the country.

Of these, more than 76,000 are third-country nationals, i.e. from outside the European Union and EFTA. At the end of 2020, the number of foreign workers was only around 35-40,000. They mainly come from Serbia and Ukraine but are increasingly being replaced by Asian workers.

The strongest trend is the dramatic increase in the number of third-country nationals coming to work in Hungary, while fewer people from neighbouring countries have come to work in the country. Most of them come from the Philippines.

Read also:

• Has the wage gap between the capital and the countryside declined in Hungary?
• Unforeseen: Hungarian guest workers are leaving Austria – here is why