In both Budapest and Bucharest , housing dynamics have historically been entangled with macroeconomic contexts and political regulation, which have shaped investment and demographic flows through these two capital cities. These flows have been defined by the two countries’ dependent positions and catching-up efforts within world-economic hierarchies, as well as both cities’ prominent positions in their countries’ uneven internal development (in terms of both investment and redistributive policies). Housing struggles have played out in historical cycles of macroeconomic processes that linked local housing conflicts to global and regional flows of capital and the hierarchical schemes of uneven development between capital cities and rural hinterlands. This chapter reviews the presocialist, socialist, and postsocialist transformations that are particularly significant for understanding present forms of housing contention, and offers insight into how the structural contexts of present housing struggles have been shaped through these different eras. The chapter’s conclusion can be read as a short summary of this long-term process.

Urban Development Before 1945

The characteristics of the housing conditions seen today in Budapest and Bucharest such as strong urban–rural hierarchies, housing shortages for the lower-income population, informal peri-urban housing, the gap between inner-city housing costs and laborer incomes, and the long-term housing disadvantage of Roma populations formed over a long period, going back to before 1945. These are the housing conditions in which the diverse forms of housing contention in our two case studies emerge, play out, and interact.

Budapest achieved its modern form in the decades following the Austro-Hungarian Compromise of 1867 following the 1848 revolution of independence (the parts of Buda, Pest, and Óbuda were officially merged in 1873). In addition to the political aim of making Budapest a regional center to compete with Vienna, the city’s unprecedented growth (among the fastest in Europe at the time) was fueled by transformations induced by the global economic crisis of the 1870s (Wallerstein, 2011). On the one hand, in a crisis-induced move from productive to financial investments, Western capital mediated by Austrian banks flew into speculative real estate and infrastructure projects in the region (Raviv, 2008). On the other hand, the previous model of world-economic integration through grain exports to industrializing Western countries collapsed (among other reasons, because of Latin American plantations taking up this role; see Baer & Love, 2000). As a result, Hungarian landowner elites redirected their investments into industry and urban real estate. They lobbied for legislation favoring high-density urban construction and invested capital accumulated during the previous flourishing of grain exports into building inner-city tenement houses (Gyáni, 1992). As the combined effect of these investments accumulated with a national industrialization effort geographically concentrated in Budapest, the real estate market and speculation in Budapest boomed. By the turn of the century, the sharply uneven development between Budapest and the countryside was noted as a problem undermining economic growth. This gap was further widened by Hungary losing two thirds of its territory in 1919, and remained a lasting characteristic in socialist and postsocialist decades as well.

The boom of urban investment was followed by corresponding population growth, as workers fleeing from impoverishment in the countryside sought jobs in industry and construction (Győri, 1996). Within Budapest, this population inflow appeared as both a labor resource for urban growth and the urban policy problem of integrating new masses of non-urban migrants. Informal, overcrowded settlements of the new urban poor came to be seen as a problem of urban development, particularly after substandard conditions resulted in cholera outbreaks in the 1870s. The city’s first reaction was to evict people from overcrowded settlements, and its subsequent reaction was to provide alternative temporary housing in barracks, following interventions by major industrialists who emphasized the industry’s need for a settled labor force. The first initiatives for homeless shelters started from well-positioned civil society groups, but these later also gained the support of the municipality (Győri, 1998, p. 31). Plans to construct workers’ colonies slowly made it into development plans. After 1906, the city administration sought to upgrade infrastructure and housing to accommodate the new levels of population growth. This included a program for building small flats for workers and an official system for homeless shelters, including the construction of the People’s Home (Népszálló), still the largest building in today’s homeless assistance system.

World War I losses and the need to provide temporary housing for citizens fleeing lost territories slowed this process, but in the late 1920s, small-flat programs were again undertaken (Győri, 1996, p. 14). The situation was not without conflicts: the first decades of the twentieth century were characterized by tenants’ rent strikes against expensive and overcrowded worker housing (Udvarhelyi, 2014). The issue of workers’ immigration also came to be discussed in terms of peri-urban settlements, where people pushed out of the city met new rural migrants seeking urban jobs. Building peri-urban infrastructure to integrate this workforce became an aspect of urban policy in the interwar era (Győri, 1996, p. 12).

Bucharest became the capital of the Romanian Principalities in 1862, at a time when they were integrating into Western commercial circuits as an intensive grain exporter. Locally, this involved an economic regime where several thousand noble families owned most of the land while the majority of the peasant population worked under neo-serfdom conditions (Dobrogeanu-Gherea, 1910). The following decades of capitalist modernization involved the growth of local middle classes (especially among ethnic Romanians), the rise of their political power through the National Liberal Party, and their concentration in urban areas. As Bucharest and several other commercial cities underwent slow industrial development during the second half of the nineteenth century, the number of state functionaries increased 30 times. Most lived in the capital city, so their strengthening political and economic position influenced the development of Bucharest. State redistribution privileged these middle classes until 1945 through the allocation of state loans, the redistribution of properties, and state housing (Voinea, 2018, p. 23), which became a long-term structural characteristic that changed housing distribution in their (and their heirs’) favor.

Parallel with the above trend, extensive land reform began in 1864, but only fragmented, insufficient, and credit-dependent property was redistributed to the large peasant population. This led to decades of revolt and the migration of the poor toward larger cities such as Bucharest. It also formed the basis of long-term structural characteristics of the property regime in Romania, dominated by small and poor rural properties, a large population without property, and a serious housing shortage, especially for the urban poor. Specific to this context is the long-term structural exclusion of the Roma population from owning property. After being kept in slavery for centuries by the monasteries, noble families, and the state, the Roma emancipation in the mid-nineteenth century was not followed by any compensation in property, in-kind forms of exchange, or money. In addition, because they lacked the status of peasants, they could not access property through agricultural land reforms.

Similar to Budapest, although later in the first decade of the twentieth century, the city administration reacted to the growth of the poor urban population with a combination of sanitary and repressive measures. Only after country-wide peasant revolts extended to peripheral areas of Bucharest, demolitions and evictions targeting poor households as anti-tuberculosis measures gave way to social interventions (Voinea, 2018, p. 49). Nevertheless, the 1912 census recorded that fewer than half of the households in Bucharest had access to running water, and 60% were tenants paying half of their wages on rent (Voinea, 2018, p. 39).

Another land reform promised to peasants before World War I to draft them came in 1921. It redistributed expropriated plots, including those at the edges of Bucharest, and put an end to the domination of large noble landlords. However, especially during the 1929–1933 global crisis, the aftermath of the reform ruined the peasants through high taxation and compensatory payments to former landlords. The redistribution of agricultural and urban properties outside the built-up areas mostly benefited emerging rural capitalists, urban state functionaries, and better-paid workers in state-controlled industries (Voinea, 2018, pp. 18–19). In the context of these social transformations, in the 1930s, one of the main planning goals of the municipal authorities in Bucharest was to keep the poor separated and on the peripheries (Voinea, 2018, p. 171). Thus, self-built housing and rural housing models were the dominant form of dwelling for the urban poor in these peripheries (Calota, 2017, p. 369). In 1941, Bucharest reached almost one million inhabitants and had a population density twice that before World War I. The aftermath of the Great Depression still affected the rural areas as a push factor, leading to a continuous housing crisis (Ghiţ, 2019, p. 112).

As these short overviews show, housing shortages have been a characteristic of the two cities’ nineteenth- and early twentieth-century booms, when impoverished rural populations fled to the capital cities in search of employment. Early reactions to housing poverty by local authorities centered on sanitary and punitive measures. While instances of workers’ housing construction and an incipient system for homeless assistance developed in Budapest, in Bucharest, keeping the poor away from the urban center remained the main policy. Peri-urban informal settlements played an important role in providing self-built, often temporary housing in both cities. Poor people’s struggles (such as housing strikes in Budapest or peasant revolts in Bucharest) did influence real estate dynamics. But these overviews also point out the significance of the urban middle classes in the development of housing-related tensions, seen in their strong state-based bargaining power in housing redistribution, the defining role of professional civic initiatives, and urban policymakers shaping social housing policies . This type of redistributive self-interest and mediating role of urban middle classes remained a lasting characteristic of housing dynamics that also features in our conclusions on post-2008 housing contention.

Housing Policies and Their Political–Economic Context in the Socialist Period

Urban growth under socialism was strongly tied to the program of import-substitution industrialization, similar to other postwar state-led developmentalist regimes across the globe (Walton & Seddon, 1994; Ban, 2014; Gerőcs & Pinkasz, 2018). This had two main consequences for the structural context of socialist housing policies. The first was the extraction of agricultural resources to support industrial urbanization, resulting in the collectivization of land and agrarian products and the channeling of agrarian populations into cities as a source of industrial development. Within cities, this increased the housing needs for labor while state investments were primarily targeted toward heavy industry. The resulting housing shortage (Konrád & Szelényi, 1974), overlapping with that before 1945, was addressed by the state by limiting immigration from the countryside, nationalizing and redistributing homes, and building state housing. While newly built socialist housing blocks became central to socialist housing policies, urban growth continued to lag behind industrial growth (Pickvance, 2002). Commuting, bed rentals, workers’ hostels, and informal self-built dwellings in industrial outskirts remained a reality for industrial workers coming from the countryside. Private housing (with the possibility of state loans in addition to private savings and self-building) and cooperative housing remained part of socialist housing systems, with private self-built housing dominating rural areas. The redistribution of state assistance for housing was hierarchical, with high-level bureaucrats and workers in privileged industries obtaining more benefits (Szelényi, 1983).

The other main consequence of import-substitution industrialization that defined the structural context of housing policies was the demand for technological imports (for industrial development), and raw materials and agricultural exports (to earn the hard currency for technological imports). In both countries, this double pressure led to indebtedness, accelerated by the oil crisis of the 1970s. The resulting debt service pressure reshaped the conditions of housing investments in both states. In Hungary, it led to decreasing state funds, the stepping up of private and cooperative construction, delays in the maintenance of state housing, and ultimately the privatization of homes. In Romania, the same conditions were met by an effort to pay back loans through extreme austerity and to maintain industrialization, including through urban construction (Petrovici, 2017).

In Hungary, the first decade of socialist housing politics was dominated by measures such as limiting rural immigration, nationalizing apartments, evicting former landlords, and the imposed partition of larger apartments (Kocsis, 2009). Socialist housing construction accelerated from the 1960s and soon created a construction boom on the scale of that following 1867 (Illés, 2009, p. 10). By 1980, the number of state-built flats exceeded 520,000 (15.2% of the national housing stock), and 52.9% of homes were state property (KSH, 1983). State construction targeted greenfield projects (rather than inner-city regeneration). The allocation of state funds for housing followed hierarchies representing the interests of those in power (Szelényi, 1983). Below the party cadres were urban workers, commuting workers, and then agricultural workers, representing nearly half of the population who either received no help (Misetics, 2017) or were offered state bank credit (Illés, 2009, p. 126).

As Hungary’s public debt servicing spiked throughout the 1970–1980s, state funds for housing decreased and were redirected from state housing construction to loans supporting private self-built dwellings and cooperatives. The legalization of the second economy (Galasi & Kertesi, 1985) involved a variety of private and self-help activities conducted after working hours. Self-built housing, involving complex informal systems of mutual help, was combined with state loans to build houses in rural areas, using savings from second economy activities. In the 1980s, construction in rural spaces surpassed that in cities because of the slowing of state construction and due to the wave of private investment in housing (Illés, 2009: 149).

Beyond the slowdown of state construction, cuts in the state budget also resulted in underperforming state maintenance companies especially in inner-city, run-down tenant buildings (Hegedüs et al., 1993). Dissatisfaction spread among tenants (Bodnar, 2001: 35–58) and was evident in the foundation of the Tenants’ Association in 1988, as described in Chap. 4. Among urban planning experts and in urban policy, the same tensions induced greater receptiveness to inner-city regeneration (Jelinek, 2017; Cséfalvay et al., 1995).

Another change induced by decreasing funds was the prioritization of support for housing cooperatives. The system of housing cooperatives was established in the early 1960s, with plots provided by the state and the National Savings and Trust Company (OTP) acting as investor and developer. Unlike in rental cooperative models, apartments were sold into buyers’ private ownership (LOSZ, 2018). A centralized system for the management of cooperative houses was established, with representative levels going from single houses to county and national levels. In the 1980s, support for cooperative housing was stepped up to compensate (partially) for the slowdown of state housing construction. At the time of the regime change in 1989, the system consisted of 1200 housing cooperatives, with 280,000 flats (LOSZ, 2018).

From the 1970s, housing deficits started to manifest in the growing numbers of commuters and workers living in workers’ homes, as well as in peri-urban informal housing (Bőhm & Pál, 1979). In the years before the regime change, this latent housing poverty also started to manifest in inner-city homelessness. Officially unrecognized by the regime, the homeless were persecuted by the police (Győri, 1990).

In Romania, most contemporary housing stock was built between 1945 and 1970. The majority of the urban population still lives in the apartment blocks built during the socialist era, which also represent the majority of the urban housing stock. The boom in state housing construction came in the early 1960s, with construction slowing but continuing to grow until the end of the 1980s (Institutul Național de Statistică, 1990). At the same time, new private housing construction has diminished since 1960, and halved with each decade despite a policy of encouraging and financing self-building in villages and smaller towns from the 1970s, similar to that of Hungary (Noica, 2003). This reflected an effort to maintain housing construction throughout the debt crisis years (Vincze, 2017), including in Bucharest. There, from the early 1950s to the end of the regime in 1989, formerly peripheral, segregated, and poor areas of the early twentieth century were transformed into new socialist neighborhoods. Single-family homes from previous eras were mixed with new blocks of flats. Next to housing construction, the state also tried to overcome the disparity between industrialization and urbanization by sustaining transport infrastructure for commuting and rapidly constructing worker colonies and hostels (“blocks for singles,” as these lower quality blocks of flats came to be called). Cheap loans for self-building and buying state housing were also offered via the state-owned savings bank. Through these parallel processes, those in poorer social strata, including the Roma (Achim, 2004), could access personal property and gain better qualifications and jobs in urban centers. However, structural urban–rural and regional inequalities were not overcome.

As in other socialist countries of the region, state housing construction was neither the only nor the first housing policy: the nationalization of large and medium-sized urban properties and their redistribution had already been underway since the late 1940s and early 1950s through a series of nationalization decrees. In Bucharest, about 70,000 apartments and houses were nationalized, and in Romania, about 200,000 (Chelcea, 2012; Societatea Academică Română, 2008). Nationalized housing was redistributed to families in need, such as state tenants on cheap rents. Villas previously occupied by single well-to-do families were divided into apartments to host several families without property; former owners had to move out or were restricted to a single flat or floor. Central areas, previously affordable only to the rich, were thus desegregated. Despite the fact that many households living in severe housing poverty before 1945 could access secure housing, similar to Hungary, the redistribution of high-quality housing followed the rank of state functionaries of the era (Chelcea, 2012). In addition, with the parallel construction boom and relocations into new neighborhoods of apartment buildings, and with the destructive 1977 earthquake in Bucharest, several central areas became less attractive. Their nationalized homes were thus redistributed to lower-ranked workers, including Roma and mixed families.

The process of urban property nationalization has been strongly contested since 1989. Property restitution became an important topic for the anticommunist, right-wing, anti-Roma, and right-liberal discourses (Vişan et al., 2019). Postsocialist restitutions (a reverse of the nationalization process) reinstated some of the exclusions and unequal aspects of the pre-1945 property regime: previously nationalized plots were again merged into large properties owned by a few large landlord speculators, and large villas in central areas again became the property of the wealthy, pushing up real estate prices. Precarious households of long-term state tenants in these buildings (many Roma and ethnically mixed households) were evicted and left homeless. In the 2000s, this formed the basis of new housing movement alliances with evicted people and Roma rights activism.

Regime Change and Housing Policies After 1989

Although the transition to the market economy involved a severe lack of capital and subordination to Western markets in both countries (Ban, 2014; Krausz, 1998), the political environments of the regime change differed significantly. These differences had important consequences for the formation of postsocialist regimes and political conflicts that continued to define the forms of contention over housing.

Differences in Late Socialist and Postsocialist Global Economic Integration

In the last decades of the socialist regimes, Hungary and Romania took two significantly different routes. In Hungary, the 1956 revolution was followed by a compromise that reduced ideological pressure, promised a general rise in living standards, and consolidated tensions between industrial and agricultural lobbies through a global market integration model built on a “bridge position” between Western and Comecon markets (Gagyi & Gerőcs, 2021). After the 1973 oil crisis, international lenders’ conditions for liberalization and internal interests for privatization combined in a process of spontaneous privatization that was already underway in the 1980s (Comisso & Marer, 1986; Stark, 1990).

On this basis, transition in Hungary occurred through peaceful negotiations, dominated by an alliance between local liberal dissidents, reform socialists, major company managers interested in privatization, international lender organizations, and Western capitalist lobby groups (Drahokoupil, 2008; Éber et al., 2014). In politics, two main contenders arose: a dominant liberal power bloc represented by an alliance between the liberal and socialist parties and supported by the aforementioned groups, and a conservative bloc that promoted national values and protectionist policies benefiting national capital. Lacking the structural alliances to carry out this program, the conservative bloc created a political discourse from a defensive position, claiming that former socialists and liberals were selling the country to Western capitalist interests (Szalai, 1994; Gagyi, 2016). The liberal bloc reacted to these charges by dismissing the nationalism (and potential anti-Semitism) of these arguments and posing as the defender of Western democracy. As popular discontent accumulated in the face of the transformation crisis and postsocialist neoliberal governance, the conservative bloc’s right-wing anti-neoliberal narrative became the main political language for the expression of economic grievances. This was also linked to the operative penetration of popular strata by the political right (Halmai, 2011; Szombati, 2018; Buzogány & Varga, 2018; Greskovits, 2020; Scheiring, 2020a). By the late 2000s, these dynamics channeled postsocialist grievances into a supermajority victory by a conservative coalition headed by Viktor Orbán’s Fidesz Party.

By contrast, until 1989, Romania maintained a program of intensive industrialization, coupled with strong political control that did not allow reform technocrats to reach the levels of power they had achieved in Hungary (Petrovici, 2006). Faced with a crisis in the sustained industrialization effort by the late 1970s, the Romanian regime first took an International Monetary Fund (IMF) loan in the early 1980s, under worse conditions than countries that had accepted earlier petrodollar loans. Faced with these harsher conditions, it then promoted strong austerity measures to repay debt to avoid pressure for liberalization (Vincze, 2017). Owing to the strong centralization of power in the late socialist period, the institutionalization of the regime change was dominated by figures in the second and third tiers of the party apparatus. Their coalition (not always harmonious) gained an electoral victory in the first elections after 1989. It tried to steer marketization toward a protectionist direction favorable for the formation of national capital (Ban, 2016), a direction opposed by international lenders. Although its public debt was repaid by 1989, the financial markets “punished” Romania by not buying state bonds until 1994 (Ban, 2014, p. 114). As it advanced throughout the 1990s and new generations of political figures emerged, the former socialist and protectionist coalition was absorbed into the changing constellations of a social democratic front.

The contender liberal political bloc that was formed during the regime change, reclaiming the tradition of the pre-1945 liberal and conservative parties, gained a political victory in 1996, rapidly advancing privatization and the liberalization of utility prices. Its policies rendered living costs unaffordable for many urban households and generated a massive and hitherto unseen wave of urban–rural migration, as well as a parallel wave of household disconnections from energy distribution. Owing to the organizational power of socialists, the opposing liberal political pole could only strengthen its power with the country’s accession to NATO and the European Union (EU ) in the 2000s, resulting in an alliance of liberal anticommunists and President Traian Băsescu, who assumed the presidency in 2004 after being the Minister of Transport during the privatization years. Băsescu was the country’s main negotiator with the World Bank (WB) at the turn of the millennium and the initiator of neoliberal urbanism as the mayor of Bucharest. The confrontation between liberals and social democrats remains a defining aspect of national and local political dynamics today.

The Privatization of Housing and Postsocialist Housing Policies

In Budapest , the privatization of state housing maintained and aggravated the inequalities of previous distribution, propelling spatial segregation (Bodnar, 1996, 2001). Valuable apartments in elite districts were the first to be privatized, with the best of conditions. As privatization occurred considerably below market prices, owners of larger and more valuable flats received greater “privatization gifts” than those less favored by socialist housing policies; the scale of favors correlated with levels of education and income (Misetics, 2017, p. 271). The 1993 Housing Act codified these hierarchical housing privatization advantages while tenants’ rights were weakened. In the first 5 years of the transition, public housing at the national level decreased from 740,000 to 38,000, and has continued to fall ever since (Misetics, 2017, pp. 270–271). The housing stock remaining in public hands was typically substandard either because tenants were too poor to buy it or because they did not want to due to its dilapidated state. The decreased stock of social housing, together with the decentralization of social policies to the level of (underfunded) local governments, had a strong limiting effect on social housing policies; it created the tendency for local governments to privatize their housing stock to gain income, a practice that disadvantaged tenants with less education and income (Győri, 2003b). Meanwhile, the decentralization of social housing policy to underfunded local governments resulted in fewer and more unequal subsidies (Hegedüs et al., 1996; Győri, 2003b). Those who lacked access to socialist public housing favors (most of the rural population) were also deprived of the “gifts” from its privatization. Falling incomes and surging unemployment coincided with energy costs being aligned with world market prices and a decrease in public expenditure on housing benefits from 8.6% to 1.8% of GDP between 1989 and 1995 (Misetics, 2017, p. 268; Dániel, 1997).

In Budapest, the combined effect of growing unemployment, rising utility costs, the disbanding of workers’ homes, and closures in other state institutions (such as correctional facilities and prisons) led to visible growth in public homelessness (Győri, 1990), which remains the most obvious form of urban housing poverty. Throughout 1989–1991, homeless people’s demonstrations and allied activists’ efforts constituted a significant push for homelessness to be recognized as a social issue rather than one of public order. As Chap. 4 explains, this process, together with the engagement of social workers and policy experts, as well as the incorporation of housing poverty into political parties’ social policy agendas, led to the establishment of an official system for homeless assistance. However, in subsequent decades, the problem of insufficient public housing was unresolved, and public housing policies favored construction and purchase (advantaging the middle and upper social strata) over providing housing benefits to prevent housing and energy poverty (Misetics, 2017).

In addition to homelessness, another effect of housing poverty after privatization has been geographical peripheralization. Newly unemployed industrial workers and commuters, pensioners, and large families on lower incomes were the main groups who migrated into rural areas after being pushed out of cities. They often took their small privatization gains from apartments they could not sustain in the city in the hope of sustaining themselves in cheaper locations (Illés, 2009, p. 175). The rural areas where they headed often turned out to be long-term repositories of unemployment and growing poverty. Within the city, internal peripheralization pushed poor families, often Roma, into low-quality, overcrowded zones (Czirfusz et al., 2015). Peri-urban informal dwellings surged again, with households turning former allotment garden buildings into informal homes (Vigvári & Gagyi, 2018).

In Budapest, urban regeneration programs continued to address inner districts after the 1990s, but with a changed focus compared with the socialist municipality plans of the 1980s. As Jelinek (2017) shows, urban regeneration projects in the 1990s sought market-driven development and were insensitive to social aspects, which started waves of evictions and intra-urban peripheralization. While European models of socially inclusive urban rehabilitation were applied in a flagship project in the 2000s in the eighth district, market- and then increasingly state-driven development in the district maintained an exclusionary character toward Roma and the poor (Czirfusz et al., 2015).

In Romania, similar to other East European contexts, privatization took place in response to pressure from IMF and WB loan agreements, as well as EU accession conditions (Stanilov, 2007; Vincze, 2019). Privatization reduced public housing stock from 30% in 1990 to less than 2% in 2011. In the early 1990s, state tenants in blocks of flats could already access “right to buy” programs at very low prices, and housing loans from the still-dominant state bank. In the mid-1990s, state tenants in nationalized housing could also access a “right to buy” program which, as in Hungary, advantaged households already inhabiting more valuable properties.

Another form of housing stock privatization was implemented through the property restitution process (Lancione, 2017; Vişan et al., 2019). This was legitimized by its winners as the opposite of nationalization and collectivization. The process started in 1990, but intensified and became more uniformly implemented with the adoption of the Restitution Law in 2001 (Law 10/2001). Its effects on housing conditions in Bucharest and the entire country were manifold. Rural restitutions of collectivized land left those households that did not own land before collectivization homeless. The result resembled the pre-1945 rural property regime fragmented and deeply unequal, with the Roma as the main ethnic group excluded from property (Zamfir, 1998; Stănculescu & Berevoescu, 2004). Urban restitutions restored large properties to the hands of pre-1945 elite families, surrounded by law firms and potential real estate investors. In large cities, the result created the property regime conditions for wider urban regeneration projects in the following decades.

As urban restitutions (re)privatized tenanted properties (Popovici, 2020), former state tenants faced unaffordable private rents from the new owners. The owners’ investment plans in the vast majority of cases led to the tenants being pushed out (Blocul pentru Locuire, 2019). Despite the fact that some form of property restitution was imposed and implemented in all former socialist countries (Lux et al., 2017), the manner in which this occurred differed significantly. Hungary did not implement in-kind property restitutions (owners impacted by nationalization were instead eligible for compensation notes or agricultural vouchers). In Romania, the Restitution Law implemented restitutio in integrum which meant prioritizing in-kind restitutions of entire properties, including those that had been converted into public institutions, parks, and public housing since the 1950s. This most affected Bucharest and several other larger cities, and created the conditions for housing and housing contention in the past three decades.

As in Hungary, another form of housing privatization followed the privatization of industrial companies that owned workers’ hostels and “blocks for singles.” The ownership and maintenance responsibility for these often remained unclear, with homes becoming dilapidated, while the workers became unemployed or underemployed. In Bucharest, several such micro-neighborhoods of apartment blocks were stigmatized and often raided by the police throughout the 1990s and early 2000s, but also became the only affordable housing options for many unemployed people (Rughiniș, 2004; Fleck & Rughiniș, 2008).

All these paths of privatization lead to evictions and homelessness, combined with discrimination against the Roma due to long-term exclusion from both urban and rural property and labor. At the level of urban transformations, these privatization paths turned urban peripheries, especially those of large cities such as Bucharest, into the most concentrated areas of severe poverty throughout the 1990s (Stănculescu & Berevoescu, 2004). As in Hungary, but somewhat later, street homelessness in Bucharest and other major cities was the first visible outcome that prompted reactions. Unlike those in Hungary, the reactions were based on charity work and humanitarian or religious NGOs linked to foreign funds and organizations. These charities came to dominate the area of homelessness support in the field of housing and replace state and local authorities’ responsibilities.

The Roma rights movement was the first to address housing in Romania as a political rather than a charity issue, demonstrating its connection to social inequalities and multiple forms of exclusion (European Roma Rights Center, 2002). The Roma rights movement grew from the early 1990s under the influence of Roma intellectuals who had established themselves in universities or higher positions before 1989. They established advocacy and human rights NGOs and networks, that were very active in the 1990s, with international visibility, alliances, and funding. As Chap. 5 explains, this early politicization process imbued the housing justice mobilizations with a strong antiracist stance. It also entailed an ambiguous relationship between housing activists and humanitarian NGOs involved in homelessness support.

The 2000s: Problems of Housing Access and the Mortgage Boom

In Hungary , the post-privatization super-homeownership system (Lux & Sunega, 2020), whereby the majority of households lived in owner-occupied housing, and social and rental housing was minimized (only 9% of the population lived in formally rented homes according to statistics in 2015 [KSH, 2016]), seriously limited housing access for low- and middle-income households unable to buy their own homes. The first government (1998–2002) of the current Prime Minister Viktor Orbán initiated the first large-scale, state-aided housing loan program. In line with his Fidesz Party’s political program, recently turned national conservative, these subsidies were mostly targeted at upper middle-class families (Misetics, 2017, p. 276). The public costs of the program proved to be unsustainable in the context of growing public debt and was abolished by the incoming socialist government in 2004 (Bohle, 2014, p. 15). As a result, the high demand for housing loans was channeled into a booming market for private mortgage loans. After the ban on foreign currency loans was lifted as one of the EU accession requirements in 2001, foreign banks penetrated Hungarian markets with foreign currency-denominated (forex) loans. These entailed higher risks than forint loans, as the risk of currency rate exchange was borne by the debtor. However, at that moment, they appeared to be and they were marketed as cheaper than forint loans. In a boom of low-rate and aggressively marketed forex mortgages, lower-income households that could not previously access ownership through loans to meet their housing needs flocked to the banks, accumulating a dangerous level of risky debt right before the 2008 crash.

The Hungarian housing mortgage boom, although specific in its high proportion of risky Swiss Franc (CHF) loans (80% of new loans and 90% of mortgage loans in the last years of the forex boom [MNB, 2009]), fits into a regional wave of foreign lending (Bohle, 2014) fueled by the dynamics of the world-economic phenomenon of housing financialization (Aalbers, 2008). While the financialization of the economy has been described as financial investments dominating governance decisions throughout the global economy (Epstein, 2005), the securitization of mortgage markets that redefined homes as an object of speculation (Martin, 2002) played an especially important role in terms of both a “great risk shift” from banks and state social policy to households (Hacker, 2019) and through the effect of the US housing bubble’s implosion after 2007.

The mortgage boom of the 2000s in Central and Eastern Europe (CEE) was part of the 2000s wave of housing financialization in Europe, with the difference that it picked up speed later (in the late 2000s, when Western and Southern European markets were becoming saturated [Raviv, 2008, p. 299]). Lenders mainly targeted households, not corporate actors (Bohle, 2014, p. 5). Most debtors took short-term flexible loans instead of the long-term fixed-rate loans dominant in Western mortgage markets (Pósfai et al., 2017, p. 17). Moreover, interest rates were higher than in Western Europe (Raviv, 2008, p. 300). The majority of loans were taken in foreign currency with exchange risks externalized to borrowers (Bohle, 2014, p. 4), mostly from foreign-owned financial institutions (Pósfai et al., 2017, p. 8). While the total value of Western European housing mortgages was higher, the rates of nonperforming mortgages after the crash were higher in Southern and Eastern Europe (Pósfai et al., 2017, p. 8). Borrowers for whom credit was not for accumulation of wealth but survival were included in the same bubble but with higher debt service rates, and fell into debt spirals at a higher rate than did wealthier borrowers (Csizmady et al., 2019).

In Romania since the 2000s, Eurostat has consistently reported above 90% of the population living in owner-occupied mortgage-free homes. This super-homeownership system has often been presented as offering housing to the vast majority, but this interpretation of the statistics is misleading (Vincze & Florea, 2020). In fact, as in Hungary, extended families own just one home, which is not enough for several generations to cohabit. The unregulated and predominantly informal rental marketFootnote 1 is estimated to represent 15–20% of the housing stock in large cities (World Bank, 2015). Both rural and small-town personal properties in underdeveloped regions have been devalued and become a poverty trap in the absence of employment. Moreover, homeownership for the low but stable income groups (from pensioners to the growing number of workers on the minimum wage) has been often coupled with poor living conditions, such as a lack of or disconnection from utilities, a lack of resources needed for repairs, and overcrowding. Romania has consistently had the highest in-work poverty rate since its accession to the EU in 2007, meaning that low but stable income households verge on poverty connected to housing insecurity.

For these reasons, low but stable income households have also experienced evictions and life in informal housing areas, side-by-side with households affected by severe poverty and lacking a stable income. Evictions or expulsions of former state tenants after restitution often affected low- to middle-income households: these were worker households that were allocated nationalized homes in more or less central areas before 1989 through their state employer. Throughout the 1990s and 2000s, working on decreasing incomes and losing their cheap rent contracts, these households suffered under a process of class restructuring that impoverished and fragmented the working classes. Differentiated access to credit lines added yet another layer of class fragmentation.

Like other CEE contexts, under pressure from external creditors and EU accession, Romania privatized most of its state banks, selling them to foreign financial groups that came to dominate the credit market (Gabor, 2012; Vincze, 2019; Ban & Bohle, 2020). Only after 2007, with the EU accession and the strengthening of the neoliberal government, did the National Bank lift its strict limits on loan to income levels for households and allow new and riskier credit lines, such as consumer loans with homes as collateral. Thus, the number of bank debtors doubled each year during the early years, reaching 900,000 in 2008 (Banca Națională a României, 2020) out of a total population of about 20 million. Despite being part of the same wave of financialization as Hungary, Romania entered after a lag and experienced important differences in the way this process incorporated households. Thus, the proportion of bank debtors in the population was much smaller in Romania before 2008, and they represented mostly middle- to high-income groups.

Forex loans, mostly euros-denominated, were also targeting middle- to high-income groups, while Swiss Franc loans never accounted for more than 5% of all household loans. On the other hand, hire-purchase loans offered by retail chains, mostly for buying household goods, represented the dominant form of household credit. At that time, hire-purchase loans were unregulated, poorly monitored by the authorities, risky, and expensive, and were the only form of credit accessible to lower but stable income households. Thus, different income groups accessed different types of loans. The wide category of low- to middle-income groups could only access small but expensive and risky hire-purchase loans, often sold to loan recovery agents when arrears accumulated. Those in the middle-income category could access forex consumer loans with their homes as collateral, which were the riskiest bank loans. Middle- to high-income debtors could access more protected bank mortgages (the riskier among them being the forex-denominated ones, with variable interest rates).

At the same time, Bucharest experienced a real estate boom in the 2000s. Large restituted properties in central and semi-central locations constituted the basis for urban regeneration projects (Vişan et al., 2019; Schwartz, 2016), while those on the peripheries or in rural suburbs served to expand greenfield developments. Experiencing a similar transformation of urban governance as in other CEE contexts, the local authorities of Bucharest in the early 2000s delegated representatives of real estate developers to draft urban regulations and plans (Florea & Dumitriu, 2018). Several activist groups that formed at that time, mostly under the influence of the alter-globalization movement, reacted to the increasing power of developers in the city and to the urban commodification wave. As Chap. 5 details, these groups became involved in the dynamics of the field of housing contention.

Political-Economic Transformation After 2008

In Hungary, the effects of the 2008 crisis combined with earlier signs of economic instability that had piled up since the mid-2000s and deepened by the socialist–liberal coalition’s efforts to maintain its dwindling political legitimacy through public spending and private Keynesian debt-led consumption. Despite these efforts, a series of violent protests broke out in 2006 against the socialist government, the repression of which sealed the political delegitimization of the previous era of neoliberal integration. Jobbik and Fidesz—the parties that penetrated popular right-wing anti-neoliberal movements in the 2000s—have both profited from stepping up as the political representatives of the discontent that fueled the 2006 wave of protests.

By the end of 2009, the total volume of household debt (including mortgages and other types of loans) relative to GDP reached 40%, of which 70% was from forex loans (MNB, 2009). Between 2008 and 2009, installments of CHF loans grew by 70%–80% (Dancsik et al., 2015, p. 115). Combined with a rise in unemployment and a decrease in household income, as well as the devaluation of collateral (as housing markets froze due to the crash), the situation resulted in hundreds of thousands of families going into arrears or outright debt spirals (Kiss, 2018). To stabilize the economy in crisis (deepened by a speculative run on the forint in June 2008), the socialist government took out an IMF loan and applied further austerity measures, including those against housing subsidies (Misetics, 2017, p. 278).

At the parliamentary elections of 2010, Fidesz (and its smaller ally, the Christian Democrat party) won a two-thirds supermajority victory, allowing it to change the constitution or pass acts of law with the support of the governing coalition alone. This victory was based on a campaign that relied strongly on social discontent with neoliberal governance, as well as on new grievances linked to the crisis, and promised a “national freedom fight” (Wiedermann, 2014) against subordination to Western capital. Once in government, Fidesz’s actual policies were for the massive centralization of administrative, judicial, and media power (Kovács & Trencsényi, 2019), and it used this capacity to undertake a reorganization of Hungary’s world-economic integration. Although its symbolic communication often emphasizes the Orbán regime’s enmity to the EU or Western models of democracy, the regime’s economic policy strongly supports foreign direct investment (FDI) in export manufacturing sectors while selectively helping domestic capital to accumulate in service sectors, with state support (Éber et al., 2019; Scheiring, 2020b). A third important pillar of the regime’s world-economic integration model is a struggle to reduce external financial dependence to create space for maneuvers in economic policy (Gagyi & Gerőcs, 2021). Complementary, the new regime transformed education and labor regulations to suit FDI interests, replaced unemployment benefits with a workfare system, and converted social policy into a “family policy” biased toward the middle class (Gagyi & Gerőcs, 2019; Czirfusz et al., 2019; Szikra, 2014). In addition to the public work program, the regime’s punitive attitude toward poverty was also infamously expressed in the criminalization of homelessness.

In Romania, the neoliberal coalition retained power from 2004 to 2012. Through the successive victories of President Traian Băsescu and his successor Klaus Iohannis, another former mayor who pioneered neoliberal urbanism in his city (Oancă, 2010), the coalition also ensured a presidential position until 2024. This coalition oversaw the crisis-management austerity measures and contracting of a new loan agreement with the IMF, WB, and European Bank for Reconstruction and Development, intended to achieve macroeconomic stabilization.

The crisis started unfolding in early 2008, with the fall of real estate prices. It was followed in 2009 by a sharp drop in GDP and attacks on the currency (including those led by then ING consultant Florin Cîţu, who later became the finance minister in 2019–2020, then Prime Minister in late 2020). Threats of foreign banks’ withdrawal left very limited room for monetary policy to maneuver, considering the high market share of foreign banks (Ban & Bohle, 2020; Kudrna & Gabor, 2013). Unlike the situation in Hungary, bank debtors without arrears were always in the vast majority (always above 75% of debtors) owing to the dominance of middle- to high-income borrowers. These wealthier and better protected debtors supported most austerity measures to keep the RON-Euro exchange rate in check (and thus their monthly payments of forex-denominated loans) and maintain their asset prices (Ban, 2014).

In the context of post-crisis austerity, the ruling neoliberal coalition further consolidated Romania’s position as a pool of cheap labor for export-oriented FDI and the Western labor markets. Unlike in Hungary, post-crisis policies did not constitute a reconfiguration of its integration path, but strengthened the previous one. With this process, national capital and the political parties associated with it (the Social Democratic Party and sometimes its coalitions with conservatives) started losing ground in the face of transnational capital and its political allies (the National Liberal and Democratic Parties). However, national politics remained tense, with clashes among the main parties and government overturns continuing today (2021).

Considering Romania’s integration path, it is not surprising that the main aspects of the austerity measures targeted labor flexibilization, slashing labor rights and union power (Ilie & Lazăr, 2017; Guga, 2019). In 2011, the Labor Code and Social Dialogue legislation were amended, requiring unions to have at least 15 members, affecting millions of workers in smaller companies who could no longer organize in unions. About 50% of all contracts were capped at the minimum wage, affecting millions who could hardly afford housing costs. The amount of the minimum wage became the main field of political confrontations between the main parties. Meanwhile, the cost of housing and related charges continued to grow in the cities, constituting the most expensive category of costs incurred by households (Friedrich Ebert Stiftung, 2020; Guga et al., 2018). Thus, wage concerns gradually included and expressed concerns over housing security, housing conditions, utilities, and access to better credit conditions.

In 2012, about 32% of the population was in arrears on (formally registered) rents, utility bills, mortgages, and hire-purchase repayments. About 51% of the total population, and more than 64% of those on lower incomes, lived in overcrowded conditions. A massive anti-austerity wave of protests lasted from 2011 to 2012, in parallel with the international wave of austerity-sparked protests. In its aftermath, the government was regained for some years by the social democratic coalition. GDP growth was recorded in 2013 (Ban, 2014), and in 2014, the end of austerity was announced (Guga, 2019). The slashing of workers’ rights was further advocated by the neoliberal coalition, which remained strong in the parliament, and the National Bank. The 2014 presidential election campaign ended with the victory of Iohannis, having been dominated by the liberal parties’ attacks on lower-income workers and the poor, similar to the anti-poor discourses in Hungary.

Tensions Around Housing Poverty After 2008

In Hungary , tensions around housing poverty after 2008 were determined by the effects of the crisis as much as by the transformation of the political regime. The most politicized aspect of housing poverty in this context became homelessness. While the institutionalization of homeless assistance in the 1990s shifted the issue of homelessness from policing to the realm of social policy, the criminalization of homelessness remained a creeping trend in the following decades, from selective enforcement by police and public space supervisors, to anti-begging regulations by local governments or prison sentences as punishment for squatting (Bence & Udvarhelyi, 2013). Radicalizing this trend, after 2010, the Orbán government made the criminalization of homelessness into an explicit state policy. In 2010, in an amendment to the construction law, local governments were entitled to ban homeless people from designated areas, with Budapest’s Fidesz-led eighth district pioneering the use of this opportunity (Udvarhelyi, 2014). In line with plans to open new shelters with obligatory detention centers, two new homeless shelters were opened by the Budapest municipality in collaboration with the Minister of Interior, containing a police station and a short-term jail (Udvarhelyi, 2014, p. 821). In recognition of his pioneering efforts, eighth district mayor Máté Kocsis was made rapporteur for homelessness by parliament and continued to work on the issue on the national scale.

In December 2011, the parliament made living in public spaces illegal throughout the nation. In the 7 months after the law came into effect in April 2012, more than 2000 people were prosecuted, and a total of almost 40 million HUF (approx. 120,000 euro) was incurred in fines (Udvarhelyi, 2014, p. 823). In response to the efforts of civic groups, the Constitutional Court in 2012, found punishing the homeless for being homeless to be unconstitutional. However, in March 2013, the constitution was modified by the supermajority government to allow local governments to ban living in public spaces. With this step, Hungary became the first country in the world to constitutionalize the criminalization of homelessness (Udvarhelyi, 2014). As Chap. 4 shows, the struggle over criminalization did not stop here: new waves of the criminalization campaign were met by civic resistance, as well as foot-dragging by the police in its implementation.

Two other important aspects of housing poverty after the crisis in Hungary were evictions and informal housing. The growing number of evictions was mainly linked to the forex mortgage crisis, an issue that became strongly politicized by both debtors and the government, as the next subsection shows. By contrast, the new wave of households moving into peri-urban informal housing (Vigvári & Gagyi, 2018) remained a politically silent phenomenon.

In Romania, during the austerity years, almost 30% of the population was in utility arrears, while populations trapped in rural and small urban areas could not afford connection to basic infrastructure and utilities (Vincze, 2013). Anticipating a worsening of the ability to pay housing costs for a growing population, the neoliberal government changed both the Civil Code and the Labor Code in 2011. The modifications diminished tenant protections and their protection against evictions. As expected, the number of evictions from homes grew after 2010 above the spike in 2002–2003 caused by the implementation of the Restitution Law in 2001; the rate of evictions imposed by law enforcement agents also grew. These trends continued throughout the period of economic recovery. The cities of Bucharest, Cluj-Napoca, and Timişoara were marked by evictions disproportionately affecting Roma and ethnically mixed households. Such evictions became central to the dynamics of the housing mobilizations. In 2016, the interim technocratic government opened public consultations on the National Housing Strategy, with humanitarian NGOs, experts, and housing rights groups to prove its transparency on issues that attracted public attention at that time. Despite having limited results (the National Housing Strategy had still not been adopted in 2021), as Chap. 5 describes, these public consultations catalyzed the involvement of left-leaning housing rights groups in advocacy processes at the national level.

Under pressure from growing housing costs and evictions, informal housing arrangements became even more widespread, reaching over 100,000 households according to estimates by the Ministry of Development. Many of these households were Roma, according to the National Agency for Roma. At the peak of the economic growth cycle that started after 2013, in 2017–2019, some of these households were evaluated by social aid NGOs to have improved resources at the point of exiting poverty. Given the increased availability of resources for households in certain informal settlements (and thus their ability to pay formalization costs), new policies in line with EU and The United Nations recommendations and requirements were fast-tracked to formalize their situation. Special new credit lines promoted as corporate social responsibility programs by large financial groups or under EU programs, such as HERO 2020, were drafted to penetrate this emerging income category. By 2021, these had still not been implemented. The majority of households that could not afford formalization costs or loans or could not be formalized (due to hazardous conditions or locations), were left out of these measures.

The Politics of Debt Crisis Management and the New Housing Boom

From the perspectives of banks and policy makers, the main priority in managing the Hungarian forex debt crisis was portfolio cleaning, preferably through the restoration of debtors’ solvency through debt restructuring (Dancsik et al., 2015). Legislation introduced the possibility of recalculating debt at a Central Bank medium rate (eliminating banks’ unilaterally imposed exchange rates) and capped interest rates. This eased the situation of many debtors, although it offered little help to those already in arrears (Dancsik et al., 2015). In addition to other tools, such as a crisis tax imposed on banks, these measures were designed to put pressure on foreign banks as part of the government’s broader efforts to increase the share of domestic actors in the financial market. Foreign banks’ insolvent assets were bought by the government at relatively high prices (Mihályi, 2015). The share of domestic actors grew from around 20% before 2010 to more than half of the financial market by 2017 (EBF, 2018).

The other main crisis measure was the conversion of forex loans to forint in early 2015. As Swiss Franc rates soared in the following months, this step saved forex debtors from further rate rises. However, it also fixed debt rates at exchange rates at the moment of recalculation, keeping installments above sustainable levels for many debtors in arrears. In terms of financial stability, banks and regulators consider the conversion to be the end of the forex mortgage problem (Kolozsi, 2018). The conversion also constituted an important step in the government’s program to decrease external financial vulnerability and increase government control over financial politics (Karas, 2021).

Those debtors who took out the loans not as investments but because they had no other way to access new housing and whose household incomes were destabilized by higher installments benefited little from these measures (Csizmady et al., 2019). As Chap. 4 explains, debtors’ movements initially supported by the government as part of its “economic freedom fight” political campaign were marginalized and silenced after 2014. In a move to clean bank slates, a large proportion of outstanding debt was transferred to debt collection companies (Palkó, 2018). Even cases of successful debt restructuring often entailed an increased debt servicing burden, met through property sales, moving to substandard housing, cutting consumption, or work migration (Csizmady et al., 2019; Habitat, 2018). Family breakups, psychosomatic illnesses, and suicide are often mentioned in debtors’ and advocates’ interviews (Szabó, 2018; Chamber of Debtors1, 2018; T. G., 2018).

The two measures targeted at debtors with problems were temporary moratoriums on evictions and the National Asset Management program (NAM), established to acquire the homes of debtors in the worst situations. Between 2012 and 2017, NAM acquired over 36,000 homes, the majority of homes under enforcement proceedings (Magyar Narancs, 2019). While NAM represents the largest expenditure on social housing since 1989 (Misetics, 2017, p. 279), it was praised by banks as a key tool for enforcing the use of collateral, a necessary means to restore general willingness to repay debt (Dancsik et al., 2015). In 2019, having fulfilled its function, NAM started a program either to sell homes back to the families who became its tenants or to remove the previous protection against evictions from its rental agreements (Magyar Narancs, 2019).

The cleaning of debt portfolios and the creation of domestic finance capacity, together with building new middle-class savings through regressive redistribution, was used to boost a new wave of lending after 2015. A new housing subsidy scheme called CSOK (“kiss” in Hungarian) was introduced in 2016 to support home construction and purchases. Although it required a down payment (thereby primarily targeting middle-class families able to pay it), CSOK offered a subsidized loan, paid according to the number of planned children. The combination of CSOK subsidies with mortgages, together with tax benefits for new construction, created a new state-supported real estate boom after 2016. This time, loans were primarily offered in forint, administered by financial institutions in domestic hands, and based on domestic savings. Captured by new domestically controlled capital circuits in finance and construction, the CSOK-induced boom represented an important tool by which to capitalize domestic players (Karas, 2021). Meanwhile, CSOK also implied a disciplinary aspect: single parents on child benefits, people more than 6 months in arrears on their social insurance payments, those on workfare, and those with criminal records were excluded from the program (Misetics, 2017, p. 279).

In addition to state measures, other factors also contributed to the boom in housing prices after 2015. These included the general post-crisis recovery, speculative foreign investments (such as Russian and Chinese buyers on the Budapest real estate market), the effect of the tourism industry (including state-aided domestic capital circuits but also short-term Airbnb rentals) that raised rent prices in inner districts, and government-led urban regeneration projects. As a result, home prices and rents showed a significant spike between 2015 and 2019, creating a significant problem, even for middle-class tenants (Portfolio.hu, 2019; Jelinek, 2019).

In Romania, the similarity to Hungary was the implementation of post-crisis policies supporting a new real estate boom; however, the political and economic constellations around them differed. In 2009, the neoliberal government contracted a 20-billion-euro loan from international creditors for the purpose of stabilization. It subsequently launched new state programs and enhanced the scope of previous programs to (re)boost household credit and maintain profits in the construction sector. The new “First Home” state-backed mortgage program offered better lending conditions, in partnership with most of the banks in the market. The Bauspar program for saving in order to borrow later for housing repairs, construction, or purchase, in partnership with the main Austrian financial groups, was supported by bonus payments from the state. The public construction programs of the National Agency for Housing, building for sale to low- to middle-income young families (under 35 years), were reorganized in partnership with the main banks. The thermo-insulation program for apartment blocks was reorganized and expanded, with costs covered by national funds and funds borrowed by local authorities on international markets. This program mostly benefited private owners of apartments in larger cities with municipalities that were able to take out such loans. Despite a great need for social housing for lower-income groups, this need was not integrated into national or local budgets after 2008 (World Bank, 2015; Blocul pentru Locuire, 2019). The way local authorities dealt with the high demand for social housing, given the almost total absence of social housing stock, was to increase competition among applicants and recipients and to introduce additional exclusionary criteria that in fact violated the national Housing Law stipulations (HOPE, 2021). As Chap. 5 illustrates, the great need for social housing and the inequalities in the allocation of state budgets turned this into the main issue for housing rights groups after 2014.

Instead of social housing, the state-backed credit-based programs were promoted as housing policies, absorbing about 97% of the entire budget for housing programs since the crisis. The programs’ conditions were accessible mostly to those in the middle-income category, increasingly concentrated in urban areas (Petrovici & Poenaru, 2017; Guga, 2019). Thus, these programs not only benefited these groups at the expense of others in need of social housing, but also widened geographical and class divisions. Moreover, being backed by the state, these programs had safer conditions for debtors, creating a difference between pre- and post-2009 household debtors. As Chap. 5 discusses, differences between debtor groups hindered broader collective mobilization, leaving the worst affected debtors with limited options for organizing.

With government changes in 2012 and 2016, these programs became a political battlefield. Under the Social Democratic Party (PSD) coalitions, from 2013, the First Home program only granted mortgages in the national currency, thereby contributing to the slow decline of the dominance of forex loans for households. After 2017, the two banks involved in the Bauspar program were fined for not respecting the terms of their contracts as partners of the state. With the return of the National Liberal Party (PNL) government in 2019, these fines were forgiven as part of the government’s publicly declared program to “make peace with the banks.” Moreover, the two national political factions struggled over the inclusion of lower-income groups in the First Home program: PSD supported a version of the program dedicated to lower- to middle-income households only, whereas PNL supported (and finally passed in 2020) a version of the program dedicated to middle- to high-income clients. Thus, the penetration of bank credit among lower-income groups remained very limited in Romania, and the majority of lower-income households were stuck with smaller but more expensive and riskier hire-purchase loans and debt on utility bills. On the other hand, similar to earlier capitalist cycles in the nineteenth and twentieth centuries, with signs of economic growth since 2013, the “winners” of these policies, generally in the middle-income category, also gained political power.

Since late 2015, these groups’ political power was expressed through massive and lasting anticorruption protests and the successive rise of a new neoliberal party, absorbing urban middle- to high-income groups. Called the “Save Romania Union” (USR), this political party targeted the Social Democratic Party, portraying it as the main source of corruption and backwardness in the country. Taking a strong anticommunist stance, USR attacked the poor, recipients of state benefits, and rural residents as corrupt PSD voters, demanding their constant surveillance. From the beginning, it allied with the transnational capital seen as a source of development, the liberal president, and neoliberal technocratic political groups (such as those that later coalesced as the PLUS Party).

Anticorruption protests broke out in November 2015 after a deadly fire in a Bucharest concert club, and again in early 2017 in response to justice system legislation passed by the PSD government that was seen as enabling corruption to be pardoned. These mobilizations reinforced middle-class political frameworks expressed in new neoliberal party politics. They were manifested as periodic anticorruption demonstrations in the largest Romanian cities until 2018. The topic of corruption has been evident in public discourse since the Greek crisis, as it was one of the mainstream explanations for the Greek debt situation. The anticorruption mobilizations were the most visible forms of contention after the crisis in Romania. PSD, despite remaining popular among voters for ending austerity measures in 2014 and its wage-led growth policies, which slightly improved living conditions in 2017–2019 (Guga, 2019), was losing ground. In its governing coalitions, it hardly increased the national budget for housing programs and did not return the Labor or Civil Codes to pre-austerity forms (Ilie & Lazăr, 2017). However, it continued to support the advancement of the middle-income categories thus further contributing to class disparities by passing protective laws. The in-kind debt repayment law, in 2016, aided mortgage debtors (a better positioned group of debtors) to renegotiate and refinance loans with better conditions. Amendments to the Housing Law in 2017 granted privileged access for defaulting mortgage holders to a special category of public housing. In this context which protected and benefited the more affluent buyers, the new housing boom after 2015 was fueled by the buy-to-rent investments of the urban middle class (Profit.ro, 2019).

After 2019: Changes in the Structural and Political Context of Housing Contention During the Pandemic

In Hungary , the period after 2019 brought two main changes in the structural and political context of housing contention: the effects of the COVID-19 pandemic and the start of political campaigning for the 2022 parliamentary elections. The freeze of tourism due to the COVID-19 pandemic, together with general pressure on the population’s spending capacity, brought a temporary decrease in housing prices. This was particularly felt in relation to rents, which decreased at an average of over 10% in Budapest, and up to 17% in inner Pest districts (KSH, 2021). The effect on house prices has been milder, owing to a government moratorium on debt payments for consumer loans, which delayed the surge in supply that could be caused by mass defaults (Penzcentrum.hu, 2021). This step was also especially significant for protecting the real estate sector (which is economically and politically important to the government), as more than 35% of household loans belonged to employees in the real estate, tourism, and construction sectors, which suffered a major freeze due to the pandemic (Karas, 2021). While market actors and regulators all expect a series of debt defaults once the moratorium is lifted, continued household lending and construction, driven by further state subsidies and tax cuts, contributed to a strong market rebound in 2021, accompanied by growing construction prices owing to energy costs, supply chain problems, and the lack of a workforce (MNB, 2021).

As Chap. 4 details, one measure that housing groups addressed during the COVID-19 pandemic was a regulation that allowed local governments to limit short-term rentals, thereby easing pressure on Airbnb apartments on the rental markets. The government’s motivation for this move was to protect the state-backed tourism industry from Airbnb competition in the middle of a sectoral crisis (Büttl, 2020). Although Airbnb lobby groups have been successful in curbing reforms, reduced short-term renting as a result of the COVID-19 pandemic is expected to push more apartments onto the long-term rental market (Penzcentrum.hu, 2021).

The government’s broader pandemic policies were marked by efforts to avoid the political effects of a pandemic-related crisis before the 2022 parliamentary elections and to secure party actors’ economic grip on strategic resources in the face of potential electoral loss (Bódis, 2021). Other than campaign communication, electoral politics was also evident in conflicts with local governments held by the opposition coalition, which won them in the 2019 elections.

In Budapest, several district-level opposition governments and the municipal government headed by Mayor Gergely Karácsony were examples of a long-term alliance between opposition politics and antigovernment protests over social issues against the Orbán regime. New economic pressures on middle-class groups also sparked the interest of educated youths for social issues, creating an opening for social demands in mainstream liberal opposition discourse and contributing to a new leftist political trend (Gagyi, 2021). Leftist housing activists were among the main participants in post-2010 demonstrations and the newly formed new leftist scene. In 2019, leftist housing activists’ framing of the housing issue mainly focused on homelessness, social housing, and rent affordability was part of several opposition candidates’ campaigns, including that of Gergely Karácsony. As Chap. 4 shows, this alliance between socially sensitive liberal opposition politics and left housing activism affected the development of housing contention after 2019. The effects ranged from practical interventions such as opposition mayors rejecting anti-homeless regulations and municipal moratoriums on evictions to highly politicized clashes such as the national government withdrawing funds from local homeless advocacy institutions or the opposition’s campaign against the development of a campus for the Chinese Fudan State University.

In Romania, the clashes at the national political level continued during the pandemic, with 2019 marking the removal of the PSD coalition from government, the return of the National Liberal Party, and a new victory for Klaus Iohannis as president. General and local elections followed in 2020, with the National Liberals maintaining leadership of the government coalition. The party formed a government with new neoliberal USR and PLUS parties (as minority partners), which illustrates the rapid rise of these parties, representing the urban middle- to high-income groups. USR and PLUS candidates also gained mayoral positions in the main cities such as Bucharest, some Bucharest districts, Timişoara, and Braşov. Moreover, AUR, a new far-right party, entered parliament for the first time, in the context of very low voter turnout. In this national political context, Romania reinforced its neoliberal integration path, mainly based on creating favorable ground for FDI demands and on cheap labor as its competitive advantage. In response, labor struggles have intensified since 2019, with the main union confederations continuously organizing protests and other events. Their protest frames started to include issues connected to wages, such as living costs, housing costs, and housing conditions and thus opened to collaborations with housing rights groups. As the government has used the pandemic as a pretext to freeze the minimum income when prices have been soaring since early 2020, struggles over living costs have become more visible.

In housing policy, the long-term tendency to benefit the narrow middle-to-higher income category will probably continue. Its most recent manifestation appears in the 2020 transformation of the “First Home” program into the “New Home” program, designed for more expensive homes and higher loans. The “New Home” program was attainable only to those on higher incomes and was designed to include applicants who already own property.

What is specific to this phase is the intensified privatization of vital health and education services and the remaining state companies, with the support of the new neoliberal parties. Moreover, Romania has negotiated a 30-billion-euro nonrefundable allocation from the European Commission for its 7-year National Plan for Recovery and Resilience, on top of its access to the usual EU cohesion funds. Thus, there is increased competition within the governing coalition and at the local level over arrangements to manage and distribute this consistent funding. In 2020, housing rights groups have successfully advocated for the inclusion of social housing construction in this budget. However, the final allocations to be approved by the European Commission and implemented by the government were still unknown by the end of 2021. Charities and humanitarian NGOs are also lobbying to access funding programs within the framework of the National Plan, advancing themselves as surrogates for state services with the support of the neoliberal coalition.

Another specific aspect of this phase is the anticorruption ethos amplified by the new neoliberal parties. This is manifested in the increased policing of social benefits and social services recipients, including tenants of social housing (Frontul Comun pentru Dreptul la Locuire, 2021). At the beginning of the pandemic, on the pretext of enforcing lockdown measures, the police especially targeted those in poorer or informal housing areas (Vincze & Stoica, 2020). Thus, the anticorruption ideology’s fixation on lower-income groups is evident in direct policing pressure. Until the end of 2021, the Ministry of EU funds was led by a USR Party representative who in 2019 proposed a legislative change to imprison all those with so-called communist ideas. This also signals a limited and even risky environment for action for left-leaning groups and movements, including those focusing on housing rights.

Conclusion: Long-term Structural Factors in the Dynamics of the Contention Field

This chapter reviewed long-term structural factors that have shaped the dynamics of housing and housing-related contention in Bucharest and Budapest. Many of these dynamics are common to the two cases, owing to the two cities’ relatively similar position in the world economy and shared socialist/postsocialist histories. One of the main factors that we emphasized was the effects of urban–rural hierarchies, propelled by catching-up efforts in the world-economic context and resulting in unequal internal development, which manifested in historical rhythms of rural–urban labor migration and the peripheralization of surplus labor. Another factor was financial vulnerability and dependence, which is evident in the field of housing as both a lack of sufficient funding for housing and housing-related household debt. We showed that within these limitations, housing relations in the two capital cities have developed under conditions of a permanent lack of capacity to meet the housing needs of the entire population, despite these cities’ prominent positions in both investment and redistributive policies at the national level. Two additional status-based factors that we identified in the long-term governance of this problem were urban middle classes’ capacity to obtain redistributive favors and the intersection of ethnic discrimination with poverty among the Roma, which have remained the characteristics of property regimes as well as housing-related redistributive policies until today.

Reviewing the presocialist, socialist, and postsocialist periods, we showed that housing poverty, informal dwelling and temporary housing for labor (from bed rentals to workers’ hostels) have been characteristic of the two housing systems from the first modern urban booms and remain so now. While socialist policies involved large-scale apartment construction, relatively broad institutionalization of temporary workers’ hostels, and redistribution of existing housing stock that also favored the poor (as in the case of inner-city nationalized rentals for Roma families), the parallel boom in industrialization exceeded this broadened housing capacity. Thus, socialist development remained marked by a gap between housing needs and housing capacity. The commodification of housing after 1989 exacerbated this problem and opened the way for new forms of status-based discrimination from evictions of Roma families from restituted apartments to status-based differentiations between debtors in different standing in post-2008 crisis measures.

In addition to these similar long-term characteristics, our overview also emphasized differences between the two cases, pointing out how local political regimes’ reactions to the same waves of global economic pressure resulted in different economic regimes and housing policies on the ground, as well as in different constellations of political polarization. Chapters 4 and 5 delve deeper into the two cases, showing how local initiatives to politicize housing tensions developed from and navigated these contexts.