Development of the Housing Allowance Programmes in Hungary in the Context of CEE Transitional Countries

This paper explores the background of the emerging of housing allowance system in Hungary after 1990 in the context of the Central and Eastern European (CEE) countries. Housing allowance in Hungary was first introduced as a decentralized (local government managed) programme, but it went through a development process. The programme was more a part of the safety net system than a demand side subsidy, and its limited role can be explained by the lack of financial incentives of local governments. A new programme was introduced in 2004, where the cooperation between central government and local governments is better founded and, hence, will lead to a restructuring of the scope of the benefit programme. The Hungarian housing system seems to move towards a housing and welfare regime in which the state (public housing) plays increasingly less role, the transition process puts more and more burden on the families, and the safety net provides help only to the neediest families (very low-income households and those in a crisis situation). While this seems to be close to a combination of the liberal and‘rudimental’ welfare regimes, the institutional structure of the welfare regime is still in the process of change.