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    http://usj.sagepub.com/Urban Studies

    http://usj.sagepub.com/content/50/1/22The online version of this article can be found at:

    DOI: 10.1177/0042098012453856

    2013 50: 22 originally published online 13 August 2012Urban StudZoltn Kovcs, Reinhard Wiessner and Romy Zischner

    PerspectiveUrban Renewal in the Inner City of Budapest: Gentrification from a Post-socialist

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    Urban Renewal in the Inner City ofBudapest: Gentrification from a Post-socialist PerspectiveZoltan Kovacs, Reinhard Wiessner and Romy Zischner

    [Paper first received, August 2011; in final form, April 2012]

    Abstract

    After the political and economic changes of 198990, the concept of gentrificationinspired many urban researchers in central and eastern Europe (CEE). Despite thegrowing number of papers, there is still a substantial empirical gap concerning thetransformation of inner-city neighbourhoods in the CEE. This paper is based onempirical data regarding the physical and social upgrading of neighbourhoods ininner Budapest. The paper argues that gentrification in its traditional sense affectsonly smaller areas of the inner city, mostly those where demolition and new housingconstruction took place as an outcome of regeneration programmes. At the same

    time, the old housing stock has been less affected by gentrification. This is mainlydue to the high share of owner-occupation and the social responsibility of local gov-ernments. Thanks to renovation and new housing construction, a healthy social mixwill probably persist in the inner city of Budapest in the future.

    1. Introduction

    The concept of gentrification has domi-

    nated the literature dealing with inner-city

    transformations over the past four decades(Clark, 1991; Lees, 2008; Lees et al., 2008;

    Ley, 1981; Smith, 1979, 1996). After thepolitical and economic changes of 198990,

    the concept has also gained more attention

    in urban research in central and eastern

    Europe (CEE) (Kovacs, 1998, 2009; Standl

    and Krupickaite, 2004; Sykora, 1999, 2005;Foldi, 2006). This is mainly because the

    cities of CEE were affected by rapid eco-nomic restructuring and social change as an

    outcome of the post-communist transition

    Zoltan Kovacs is in the Institute of Geography, Hungarian Academy of Sciences, Budaorsi ut 45,Budapest, H-1112, Hungary. E-mail: [email protected].

    Reinhard Wiessner and Romy Zischner are in the Institute of Geography, University of Leipzig,

    Johannisallee 19a, 04103 Leipzig, Germany. E-mail: [email protected] and [email protected].

    Urban Studiesat 5050(1) 2238, January 2013

    0042-0980 Print/1360-063X Online 2012 Urban Studies Journal Limited

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    and their internal socioeconomic patternstended to resemble the west European cities(Boren and Gentile, 2007; Sykora, 2009).The massive inflow of global capital resulted

    in new shopping, office and leisure centresin inner-city and suburban locations. Newresidential quarters for the better off in theform of single-family housing and gatedcommunities were developed at the edge of

    the compact city and more often in the sub-urbs (Andrusz et al., 1996; Enyedi, 1998;Leetmaa and Tammaru, 2007; Ourednicek,2007; Ruoppila and Kahrik, 2003).

    Nevertheless, the development of inner-city neighbourhoods did not initially follow

    the West European pattern. The social andphysical upgrading of these neighbourhoods(i.e. gentrification) remained limited and

    brought about only small and sporadicdevelopments during the 1990s (Haaseet al., 2012; Kovacs, 1998; Sykora, 2005). Inmost parts of the inner cities, a relativedecline remained prevalent after 1990 due

    to worsening housing and environmentalconditions, the continuing concentration ofpeople with lower income and the lack of

    legal and planning frameworks supportingregeneration. In some cases, inner-city

    neighbourhoods even became hotbeds ofsocial exclusion and segregation in thefirst decade of transition (Ladanyi, 2002;Wec1awowicz, 2002). Perhaps the onlyexception within the wider region was

    Eastern Germany where large-area regenera-tion programmes with massive central-statesupport resulted in spectacular upgradingprocesses in the inner cities as early as themid 1990s (Bradeet al., 2009).

    However, a growing body of literaturehas indicated a turnaround in the develop-ment of post-socialist inner cities recently.Signs of physical upgrading coupled with

    gentrification have been reported from sev-eral CEE cities even though most of these

    studies focused on capital cities where

    systemic transformations and globalisationprocesses have been most advanced,like Prague (Cook, 2010; Sykora, 2005;Temelova, 2007), Moscow (Badyina and

    Golubchikov, 2005; Gritsai, 1997), Vilnius(Standl and Krupickaite, 2004) or Budapest(Foldi, 2006; Kovacs, 2009). Most of theliterature to date, however, lacks a convin-

    cing empirical underpinning as far as themechanisms of gentrification, its actors andoutcomes are concerned. Therefore, it is

    difficult to assess to what extent neighbour-hood upgrading processes in post-socialist

    cities fit the wider concept of gentrificationelaborated in western Europe and North

    America. To narrow the gap, this paperfocuses on the socio-spatial change that hastaken place in the inner city of Budapestfrom an empirical perspective. Based on

    empirical research findings we try to

    answer the following questions

    What are the main factors of neighbour-

    hood change and what is the role of localpolicy in the regeneration of inner-cityneighbourhoods in Budapest?

    How does residential change (displace-ment) take place as a result of regenera-tion and how has the socio-demographicprofile of upgraded neighbourhoodschanged?

    Can we call this process gentrification ina Western sense? What are the similari-

    ties and differences between the Budapestfindings and processes described in theWestern literature?

    Before introducing the empirical results andanswering these questions, we briefly reflect

    on the theoretical background and intro-duce the local framework conditions. Afterthe empirical analysis, we would like to turn

    back to the original concept of gentrificationand fit the observed processes into a wider

    conceptual framework.

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    2. The Concept of Gentrificationand its Post-socialist Interpretations

    The term gentrification has been used in the

    literature in many different ways and the cri-tique of a chaotic concept is more than ever

    timely (Beauregard, 1986). If we take the tra-ditional concept of gentrification put for-

    ward by Ruth Glass (1964), it refers to the

    process of transformation of old residential

    neighbourhoods in which working-class and

    poor residents are displaced by an influx ofgentrifiers, a new class consisting of well-

    educated and better-off people. This change

    results in improvements in the areas hous-ing stock and public infrastructure with a

    concomitant increase in dwelling prices and

    rents (Hammel, 2009).Over the past four decades, there has

    been a shift in meaning and, in contrast to

    the traditional definition, recent concepts ofgentrification apply a much broader view.

    Terms like rural gentrification (Phillips,

    1993), new-build gentrification (Davidson

    and Lees, 2010; Rerat and Lees, 2011) super

    gentrification (Hammel, 2009) broadenedthe view of gentrification and covered a

    huge variety of social transformation pro-cesses in and outside the inner cities (Lees

    et al., 2008).Writing about gentrification,

    some authors put the emphasis on physical

    upgrading which is not necessarily followed

    (or just to a limited extent) by an influx of

    better-off people and an increase in realestate prices. As a contrast, others use theterm of gentrification exclusively for social

    upgrading processes and, according to their

    view, a physical upgrading in the gentrifica-

    tion is not necessary (Friedrichs, 1996;

    Glatter, 2007).As we can see, very different processes are

    interpreted in the literature as gentrificationthat do not correspond to the traditional

    recipe of the phenomenon. This reflects thegradual change that has evolved in gentrifi-

    cation research as far as the forms, actors

    and geographical locations of the processare concerned. As a consequence, gentrifica-tion has gradually become a catch-all termused to describe a great variety of social and

    physical urban transformation processes(Atkinson and Bridge, 2005; Lees et al.,2008; Rerat et al., 2010). This is not leastbecause our cities are affected by many dif-ferent types of physical and social upgrad-ings, resulting from commercialisation,globalisation and the growing differentia-tion of lifestyle and housing preferences ofresidents, underpinned by specific frame-work conditions at the national and local

    levels. The classical notion of gentrificationis therefore only one of the variants of theterm today. However, the use of the broadconcept of gentrification can result in theoriginal content of the process referring toqualitative changes in an urban neighbour-hood getting lost. In our empirical analysis,we use the more focused term of regenera-tion when selecting and analysing the case

    study areas. By this term, we mean in generalthe physical renewal and social upgrading ofold run-down residential neighbourhoods.

    The physical and social upgrading ofinner-city neighbourhoods show great var-iations in the post-socialist countries aswell. Cities of early reforming countries (theCzech Republic, Hungary, Poland) and EastGermany, where inner-city restructuringhad already started in the early 1990s pro-

    vide showcases for gentrification, whereasreports on gentrification from latecomercountries in the CEE are very rare (forexample, Chelcea, 2006). Physical upgrad-ing of inner-city neighbourhoods firstbecame evident in the East German citieswhere the regeneration of old residentialbuildings has been significantly supportedby the central state (Bernt and Holm, 2005;Glatter, 2007; Weiske, 1996). In these cities,

    rents remained on a rather low level; conse-quently, lower-income groups (for example,students) continued to have access to the

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    renovated dwellings and a radical displace-ment of local population could not evolve.Therefore, this process was labelled in theliterature as soft gentrification or con-

    trolled gentrification (Wiest and Zischner,2006).

    Analysing the urban restructuring ofHungarian cities, several studies had alreadyrevealed by the 1990s that the basic precon-dition for the gentrification process was themass privatisation of housing and the sky-rocketing value gap in the old inner-cityneighbourhoods (Beluszky and Timar,1992; Kovacs, 1994). In these neighbour-

    hoods, displacement of the sitting residentstook place with the active participation ofthe local governments initiating local regen-eration programmes; thus, the process waslabelled as organised gentrification (Boroset al ., 2010; Foldi, 2006; Janko, 2012;Kovacs, 2009; Nagy and Timar, 2012). Therole of neo-liberal urban policy was alsoemphasised by Standl and Krupickaite

    (2004) in Vilnius, where the Old TownRevitalisation Programme launched in 1998created favourable conditions in the inner-city quarter of Uzupis for physical upgrad-ing and a subsequent population change.Gentrification in Uzupis was initiated byartists at the end of 1990s (pioneer phase),followed by the influx of better-off middle-class families in the early 2000s.

    Haase et al. (2012) found during their

    on-site-research in two second-order post-socialist cities, qo dz (Poland) and Brno(Czech Republic), that displacement of

    sitting residents did not occur in the inves-

    tigated inner cities; however, they also

    pointed out that the in-migration of

    younger households, professionals and

    students in these neighbourhoods intensi-

    fied recently what could be the indication

    of a forthcoming gentrification. They

    called the group of new residents transi-tory urbanites (Haaseet al., 2012). In thesame vein, Marcinczak and Sagan (2011)

    confirm that revitalisation and socio-

    demographic change remained limited in

    the inner city of qo dz (Poland) and con-

    centrated only on buildings with clarified

    property rights, good locations adjacentto the main street and attractive architec-

    ture. The authors labelled the sporadic

    signs of upgrading in the inner city as

    facxade gentrification. Gentrification is

    even more ambiguous in the capital city

    of Romania. Chelcea (2006) argued that

    informal and in many cases illegal transfer

    of property rights is a key factor of gentri-

    fication in downtown Bucharest, leading

    to eviction and primitive accumulation.

    Given the Janus face of gentrification

    with strong local characteristics, some

    scholars in the CEE are not even inclined

    to apply the concept of gentrification to

    post-socialist inner-city transformations

    (for example, Haase et al., 2012; Sykora,

    2005). At the end of this paper, we turn

    back to the issue of whether or not neigh-

    bourhood change that has taken place indowntown Budapest fits in with the tradi-

    tional concept of gentrification.

    3. The Framework Conditions ofUrban Renewal in the Inner City ofBudapest

    The development of inner-city neighbour-

    hoods in Budapest was substantially influ-enced by the specific conditions that were

    created by the post-communist transforma-

    tion after 1990. Perhaps the two mostimportant factors with regards to urban

    renewal were the reshuffle of the public

    administration system and the transforma-

    tion of the housing market.In 1990, the return to self-governance in

    Budapest also meant the introduction of a

    two-tier administrative system and the sub-sequent shift of power from city to district

    level. The competence of districts was

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    significantly strengthened. They enjoy a highlevel of autonomy in implementing housingand social policies, launching regenerationprogrammes, drawing regulations plans, etc.

    On the one hand, this political fragmenta-tion of the city set up serious barriers as faras the elaboration and implementation ofcomprehensive urban development pro-grammes are concerned, but on the otherhand, it also provided the districts with theopportunity to try out and implement small,area-based interventions. Indeed, the innercity of Budapest became an urban laboratorywhere numerous small, neighbourhood

    initiatives have been experimented withsince the change of political system, resultingin various forms of physical upgrading andsocial change.

    As Sy kora (2005) pointed out, withregard to gentrification in post-socialistcities, the most influential factors werehousing privatisation and rent deregulation.In the case of Budapest, rent deregulation

    did not have too much influence because ofthe negligible role of the private rentalsector. However, the privatisation of thepublic housing sector was pivotal in therestructuring of inner-city neighbourhoods(Hegedus and Tosics, 1994). In Budapest,the privatisation of public housing meant agive-away privatisation to sitting tenants ata very low price. This practice, in additionto no restrictions on resale of the dwelling,

    made the privatisation of public dwellingsvery attractive, especially those of betterquality and with more desirable locations(Kovacs, 2009). However, there were at leasttwo negative effects of this practice of priva-tisation. On the one hand, dwellings of sub-standard quality often remained in publicownership and the public housing sectorbecame gradually residualised. On the otherhand, since individual housing units were

    sold to the tenants on a right-to-buy basis,the outcome was very often mixed owner-ship within the tenement buildings. This

    made any kind of renovation in the build-

    ings extremely difficult.We can also say that in the first half of the

    1990s both the legal and the planning frame-

    works of urban regeneration were missing inBudapest (Egedy, 2010). In addition, thenew local governments lacked the necessary

    resourcesjust like the new owners of the

    privatised dwelling stockto undertake

    renovations, whereas the private sector had

    hardly any interest in the renewal of residen-

    tial buildings. From the mid 1990s, the legal,

    planning and financial framework of urban

    regeneration was gradually elaborated. In1994, the Act on Condominiums solved the

    problem of blocks of flats with mixed tenure,

    giving them a firm legal status. In 1996, the

    official urban regeneration programme of

    Budapest was elaborated by the Budapest

    municipality. From the late 1990s, financial

    resources from other national programmes(such as the social housing development pro-

    gramme) could be used in urban regenera-

    tion and, finally, after 2000 the private sectoralso started to show growing interest in the

    redevelopment of certain centrally locatedinner-city neighbourhoods. These develop-

    ments together led to the proliferation of

    regeneration activities in the inner city ofBudapest after the turn of millennium.

    4. Physical and Social Upgradingin the Inner City of Budapestafter 1990

    4.1 Research design

    The following analysis is based on empiricaldata collected in an international research

    project focusing on the physical and social

    transformation of the inner city of Budapest.

    The main objective of the project was to

    record the architectural and social aspects ofneighbourhood change in a comprehensive

    manner and with regard to the existing

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    concepts of gentrification. In addition to

    empirical surveys, interviews with experts

    were carried out to collect informationabout the strategies and interests of different

    actors (local government, investors, resi-

    dents) in the process of neighbourhood

    regeneration.In July 2005, a mapping survey in inner

    Budapest was performed (see Figure 1),

    where the most important physical and

    functional parameters of the building stock

    were recorded. The survey covered 10 534buildings of various types. This survey

    enabled us to identify the intensity of dilap-

    idation or renovation at the level of build-

    ings, blocks and neighbourhoods.Based on the results of our mapping

    survey, seven smaller neighbourhoods were

    Figure 1. The areas of investigation in the inner city of Budapest.

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    identified where either signs of intense phys-

    ical upgrading or functional changes hintingat the presence of gentrification could be

    observed. In these neighbourhoods, what wemay call core areas of regeneration, adetailed questionnaire survey was carriedout among residents in 2006, focusing onthe renewal activities of households, theirresidential mobility and housing prefer-

    ences. In the seven neighbourhoods, 1234households were randomly selected for thesurvey out of which 503 were successfullycompleted (41 per cent). To fine tune theresults of the questionnaire survey, in-depthinterviews with selected households were

    also carried out to gather information aboutthe mobility and lifestyle of different house-

    hold types.

    4.2 Patterns of Physical Upgrading

    Renewal of buildings. In the mappingsurvey, visible signs of renovation and newdevelopments were recorded (the quality of

    the facxade, new window frames, etc.) foreach building. Table 1 summarises theextent of renewal of residential buildings inthe survey area. For the sake of analysis, we

    refer here only to data for buildings whichhave a predominantly (over 50 per cent)

    residential use. According to our survey, 6

    per cent of the buildings were built and a

    further 28 per cent have been fully reno-

    vated in inner Budapest after 1990. This

    means that about one-third of the building

    stock was affected by some kind of physical

    renewal in the post-communist era. If we

    also add those cases where the facxade was

    completely renovated (major renewal),

    the intensity of renewal activity is over 40

    per cent in the entire inner city.Analysing the spatial pattern of regenera-

    tion, concentrations of high- and low-levelrenovations can be identified (Figure 2).

    Upgraded areas indicated on the map can

    be classified into two groups.On the one hand, there are traditional

    high-status areas of the city centre (CBD)

    where the value gap is highest. These neigh-

    bourhoods were affected mostly by sponta-neous (market-led) renewal, where the main

    actors have been local residents, as well as

    foreigners. According to real estate experts,the emergence of a considerable demand

    from foreign citizens in the local housing

    market dates back to Hungarys accession to

    the European Union (2004). As a result of

    the unlimited right of EU citizens to obtain

    property, the Spanish, British and Irish were

    the first to invest massively in housing in theinner-city quarters of Budapest. To this

    group of foreigners, we should also add

    Table 1. The intensity of revitalisation of residential buildings in the survey area, 2005

    Physical renewal of residential buildings (facxade and windows) Valid cases Percentage

    New construction Built after 1990 482 6

    Full renewal Facx

    ade and windows completely renovated 2393 28Major renewal Facxade completely, windows partly renovated 568 7Partial renewal Facxade not, but windows are renovated 2882 33

    orWindows not, but facxades are renovated

    Limited renewal No renovation on facxade, windows partly renovated 961 11No renewal No signs of renovation of facxade or windows 1429 16

    Total 8715 100

    Source:mapping survey, 2005.

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    expats and well-paid professionals of trans-national firms working in the city centrewho prefer to live close to their workplace(Foldi and Van Weesep, 2007).

    On the other hand, an extensive upgrad-

    ing process has taken place beyond the arcof the Grand Boulevard, in certain parts ofFerencvaros (district IX) and to a lesser

    extent in Jozsefvaros (district VIII). Inthese originally working-class neighbour-hoods, the main reason for the upgradewas the implementation of state-led regen-

    eration programmes in the 1990s. The ear-liest and perhaps most successful urbanregeneration programme in Budapest waslaunched in Middle Ferencvaros in 1992.

    It was designed according to the FrenchSEM model (Societe dEconomie Mixte) asa publicprivate partnership (PPP) set upby local government (with 51 per cent of

    the shares) and a HungarianFrench con-sortium of investors. In a similar vein,

    Jozsefvaros (district VIII) started to imple-ment its regeneration policy in 1998 and

    set up a share-holding company called

    Rev8 to organise urban renewal in a spe-cially designated area of the district.

    However, there are also distinct areas inthe inner city of Budapest where no orhardly any sign of renovation could beidentified over the past two decades. Theseare typically old working-class neighbour-hoods with multistorey tenement blocks inthe eastern periphery of the inner cityforexample, Erzsebetvaros (district VII).

    The level of renovation also showsmarked variations among our case study

    areas. The ratio of newly built, or since1989 completely or largely renovated, resi-dential buildings was clearly the highest inthe SEM IX area (77.8 per cent), whereas inthe Theatre Quarter only one-fifth of thebuilding stock fell into this category. Weassume that higher levels of regenerationwould also entail higher levels of popula-tion displacement (i.e. gentrification) in thecase study areas.

    Housing tenure and renewal of dwellings. Our questionnaire survey shed

    Figure 2. The spatial pattern of residential renewal in the inner city of Budapest.

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    light on the age, tenure and quality ofhousing in the case study areas. The over-whelming majority (83 per cent) of thehousing stock was built before the political

    changes, and even before World War I.However, the 17 per cent share of newhousing constructed after the change ofregime is also considerable. We can alsoadd that a disproportionately large numberof newly constructed dwellings were com-pleted after 2000.

    Our survey showed that owner-occupation is the dominant tenure typeboth in the old and new housing stock.

    Altogether, 80 per cent of the dwellingstock is owned and inhabited by privatepersons in the case study areas. A typicalpost-socialist phenomenon is the highshare (43 per cent) of households whoacquired their apartment in the process ofprivatisation. With regard to the rentalsector, we can observe a balance betweenthe private and public rental sectors (10 percent each), which is the logical outcome of

    privatisation, on the one hand, and thedevelopment of a market-based rentalsector since the political changes.

    The dynamics of the local housing marketare reconstructed in Figure 3. As shown, twopeaks of housing transactions can be distin-guished in the post-communist period. The

    first boom can be linked with the privatisa-tion of the public housing sector at the begin-ning of the 1990s; while the second boomevolved in the early 2000s and was generatedby the secondary transactions of old dwell-ings and the sales of newly built ones.

    In two case study areas, the regenerationprocess could be attributed predominantlyto new construction: in the Rev8 area in dis-trict VIII and in the SEM IX area in district

    IX. Both areas belonged to the most dilapi-dated inner-city slums of Budapest before thepolitical changes, that became targets of state-

    led regeneration programmes in the 1990s.The newly built dwellings in these neighbour-hoods are in general 4080 square metres infloor area, with high levels of comfort, attrac-tive typically for younger households but not

    so much for the wealthiest sections of society(Berenyi and Szabo, 2009).

    Since 1989, the renewal of the old dwell-ing stock has also intensified in the surveyedareas. Our results demonstrate that a

    Figure 3. Housing transactions in the core areas of revitalisation.

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    significant part of the old housing stock hasbeen largely (30 per cent) or partially (59

    per cent) renovated since 1989. This also

    hints at the strong presence of incumbent

    upgrading. Only 11 per cent of the old hous-ing stock has not been affected by any kind

    of renovation or just to a very limited

    extent. The level of renovation is generallythe highest in that segment of the owner-

    occupied housing stock that was obtained

    by purchase in the free market. At the sametime, the level of renovation is significantly

    lower in the residual public housing sector.

    The role of local policies in urbanregeneration. The chances of regenera-tion as well as its actual level depend very

    much on the local policies of districts in

    the inner city of Budapest (Foldi, 2006). In

    this respect, the size of local public housingstock, the quantity of available vacant plots

    and brownfield sites where the local govern-ment could initiate new housing projects,

    just like the geographical location of the

    quarter and its architectural quality, have

    played an important role. On the basis of

    interviews with local experts, we could iden-tify three distinct groups among the districts

    according to the local regeneration strategies.

    An active strategy for urban regenera-tion.We can find active urban regeneration

    strategies in two districtsFerencvaros(district IX) and Jozsefvaros (district VIII).These two districts were among the first to

    formulate clear strategies for the regenera-

    tion of their run-down neighbourhoods and

    set into motion large area-based regenera-

    tion programmes during the 1990s, provid-ing a laboratory and also best practices for

    Budapest and beyond. In both districts, alarge part of the public housing stock

    remained in state (district) ownership pro-viding local government with more room

    for intervention. In addition, both districts

    were rich in vacant plots which made large-

    scale regeneration easier. These two districts

    established special regeneration companieson a PPP basis in the 1990s that took

    responsibility for and co-ordinated the pro-cess of urban renewal.

    A limited support for urban regenera-tion strategy. In other districts, theregeneration/renewal process was less sys-tematically organised; nevertheless, it has

    been in one way or another supported by

    the local government. A good example isthe Theatre Quarter (district VI) where

    the upgrading was enhanced by local infra-structure development (reconstruction of

    street surfaces and the development of

    pedestrian zones) and the promotion of

    local cultural institutions in order to

    increase the attractiveness of the neigh-

    bourhood. In Middle Terezvaros (district

    VI) a public programme was launched for

    the renovation and conversion of lofts.

    Through the sale of unused attic areas inblocks of flats for private investors, housing

    condominiums could acquire a good income

    that was used for the renovation of the rest

    of the building. In the Bar Quarter in dis-

    trict IX, the development of a bar and restau-

    rant quarter was enhanced by the increasingflow of tourists to Budapest and the growing

    demand for catering facilities. The develop-

    ment of the catering and tourism industry inthe neighbourhood brought about additional

    investments in housing, whereas the local

    government supported the upgrading ofpublic spaces, such as the renovation of road

    surfaces, pedestrianisation. The aforemen-

    tioned examples are located typically in

    neighbourhoods with better-quality housing

    and the renewal of buildings is performed by

    individual condominiums.

    A hands off approach. The attitude ofother districts with regards to regeneration

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    is rather passive and relies very much onthe market. This fits well with theSouthern City Area in district V, whereretail and business development leading to

    commercial gentrification is the mainpriority of local government as opposedto the renewal of residential buildings.Despite its relatively good opportunity forintervention, the attitude of district VII

    (Erzsebetvaros) has also been characterisedby a hands-off approach. Our case study area

    in this district was the Jewish Quarter. Localgovernment here followed a very liberal lais-sez-faire urban policy and provided greatopportunities for investors. During the1990s, the vacant sites gradually disappearedin the neighbourhood; first they were builtup with office, and later with residentialbuildings. By the early 2000s, hardly anyempty plots remained for new construction;therefore, demolition of existing buildingsstarted. In this process, several buildings withgreat architectural value were torn down and

    subsequently the architectural milieu, justlike the social profile of the whole neighbour-hood, changed dramatically.

    4.3 Social Change and PopulationDisplacement

    The results of our survey showed that long-

    term residents in the meantime becameonly a minority in the selected neighbour-

    hoods, 42 per cent being in situ before1989. New constructions, secondary trans-actions and rented dwellings provided thebasis for population change in the innercity of Budapest. This process clearly inten-sified over time, as only 20 per cent of thehouseholds moved to their present dwellingbetween 1990 and 2000, and another 38 percent in the short period of 200006. Theincreasing number of new arrivals and the

    extremely low vacancy rates indicate thegrowing speed of population change in the

    investigated neighbourhoods.

    However, the massive displacement oflong-term residents, so much criticised inthe Western gentrification literature, hasbeen limited in the inner city of Budapest.

    More displacement occurred in the offi-cially designated areas of urban regenera-tion where exensive demolitions also tookplace. In the SEMIX area, some 70 per centof residentsand in the Rev8 area, 44 percentmoved to their current dwellingbetween 2000 and 2006. Tenants of publicdwellings could be displaced in two differ-ent ways: either the district governmentoffered the tenants three possible rental

    choices (not always in the same district oreven in Budapest) and they had to chooseone of them; or, they were offered a cer-tain amount of compensation money andupon acceptance they had to resign theirtenants rights. The overall level of forceddisplacement has been relatively low and itwas concentrated mainly in the areas ofstate-led regeneration programmes (orga-

    nised gentrification). In other areas, thepredominance of the owner-occupiedsector, the subordinated role of new con-struction and the levelling-out policies oflocal governments were able to preventmassive displacement.

    Like most of the authors on post-socialistgentrification (Standl and Krupickaite,2004; Kabisch et al., 2010; Marcinczak andSagan, 2011), we use socioeconomic indica-

    tors to detect the directions of social trans-formation in our neighbourhoods. First, weconcentrate on those households (38 percent) who moved to the area between 2000and 2006. These households comprisemainly young people, predominantly under40 years of age. They are often single-personhouseholds, young couples with or withoutchildren, and flat-sharing communities,which is otherwise uncommon in Budapest.

    Many of them resemble, thus, the transi-tory urbanites class described by Haaseet al. (2012).

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    The income level of newcomers is defi-

    nitely higher than the long-term residents.The share of households with above-average

    income is only 7 per cent among long-term

    residents, whereas it is 24 per cent amongthe newcomers. Similarly, the share of

    households with below-average income is

    much higher among the long-term resi-

    dents (Figure 4).

    Taking into account the level of educa-tion, we found that the ratio of graduates is

    significantly higher amongst recent arrivals;

    the ratio of households with at least one

    member holding a university or collegediploma is 51 per cent in the group of new-

    comers and only 33 per cent among the

    long-term households. Our data thus reflectthe process of rejuvenation and social

    upgrading in the selected neighbourhoods.

    However, we can also note that many ofthe newcomersi.e. first-time buyers, who

    have moved to the core areas of regenera-tion recentlyhave relatively moderate

    incomes. It means that access to the

    Figure 4. Household composition according to the year of arrival and income level.

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    renovated neighbourhoods has been possi-ble not only for higher-income groups, butalso for less affluent households. Since thequality and size of the housing stock became

    more heterogeneous in these neighbour-hoods, partly because of renovations andpartly due to new construction, the socioeco-nomic profile of local residents has alsobecome more mixed over the past twodecades.

    The idea of creating more socially mixedneighbourhoods has been high on govern-mental agendas in the West (van Kempenand Bolt, 2009); however, there has been

    no sign of deliberate mixing policy in CEEcities, yet. One of the unintended results ofthe mushrooming of regeneration activitiesin inner Budapest waswithout any delib-erate policy backgroundsocially moremixed communities. Recent critiques ques-tion the positive effects of gentrification onsocial mix, emphasising that gentrificationnormally leads to social segregation, social

    polarisation and displacement (Lees, 2008).This is certainly true if gentrification takesplace in socially homogeneous low-incomeareas. Yet the neighbourhoods we studiedwere rather heterogeneous even before therenewal activities, a path-dependent featureof inner Budapest rooted in the communistand even pre-communist periods. Critiquesare also made that, instead of the develop-ment of social cohesion, gentrification can

    create social tensionsespecially whenthere are marked economic, social and cul-tural differences between residents (Lees,2008, p. 2456). This is not the case inBudapest; at least, we could not find anyhard empirical evidence for local tensionsin our neighbourhoods.

    Recent studies have also discussed theconnection between social mix and socialcohesion at the neighbourhood level (van

    Kempen and Bolt, 2009; Musterd andAndersson, 2005). The concept that bettersocial mix increases social cohesion has

    been heavily criticised (Lees, 2008). Our

    findingseven though measuring socialcohesion was not an explicit goal of our

    surveyalso show that social interactions

    were more intense and social networkswere more developed in neighbourhoods

    where population change and social mixingtook place more slowly.

    Taking into account the traditional classcategories in the gentrification literature,

    we can confirm the presence of gentrifiers

    in Budapest, especially in those neighbour-

    hoods where the reconstruction of old and

    the construction of new housing com-menced hand-in-hand (new-build gentrifi-

    cation). These are especially the SEMIX

    and Rev8 areas among our neighbour-

    hoods. Nevertheless, the group of pioneers

    is much more dominant among the newco-mers in the whole survey area. Whether

    they constitute a transitory population

    (transitory urbanites) who would be later

    replaced by gentrifiers is more than doubt-

    ful. The functioning of the local housingmarket and the size of the owner-occupied

    sector suggest that, despite intensifying

    regeneration and subsequent population

    change, the inner-city areas in Budapestwill retain a relatively heterogeneous popu-

    lation in the future.

    5. Conclusions

    Regeneration of old inner-city neighbour-

    hoods has been a spectacular phenomenon

    in Budapest over the past two decades, withregard to both its social and physical

    dimensions. It is remarkable how neigh-

    bourhoods that were affected by a dramatic

    disinvestment and social decline during

    communism have been undergoing gradualsocial and physical upgrading due to

    intense reinvestment. In this process, inaddition to the renovation of old buildings,

    the construction of new residential enclaves

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    has played an important role. As NeilSmith (1996, p. 173) noted, Budapest pro-vides a laboratory for examining the inter-connected parries of supply and demand,

    the impetus of production-side andconsumption-side forces in the genesis ofgentrification.

    Research questions formulated in theintroductory section of this paper can beanswered in the following way. As our casestudy neighbourhoods have shown, gentrifi-cation is present in downtown Budapest inmany different ways ranging from commer-cial gentrification and facxade gentrification

    to more traditional (Western) variants ofgentrification. Our results thus contradictSykoras previous findings, based on the lit-erature of the 1990s, denying the presenceof true gentrification in inner Budapest(Sykora, 2005, p. 103).

    The most relevant factors of neighbour-hood change in the inner city of Budapestcan be summarised as follows

    the capitalisation of the land and hous-ing markets, a radical shift from publicto private ownership and a concomitantrise in land and housing prices;

    the growing presence of internationalcorporate investors and property develo-pers integrating the city into globalcapitalism;

    the diverse and relatively ambitious

    urban regeneration policies of the inner-city districts, with some EU and nationalgovernment support;

    the growing size of the new middleclasses with inner-city-orientated resi-dential preferences and lifestyles, as anoutcome of post-communist socialrestructuring and class formation;

    the readiness of long-term residents toinvest in the renovation of their dwell-

    ings acquired during the privatisationprocess, as a kind of incumbentupgrading.

    Considering the social aspects of renewal,we can conclude that urban regenerationand upgrading in the formerly run-downneighbourhoods of Budapest are taking

    place in a smooth manner. Massive displace-ment, evictions or social tensions amongresidents could not be demonstrated (Lees,2008). This is mainly due to the large size ofthe owner-occupied sector and the socialresponsibility of local governments. Externalprivate investors have had only a limitedaccess to the housing stock in our researcharea. If we understand gentrification as aprocess of upgrading, where up-market

    housing with high-status residents becomesdominant in a formerly lower-class neigh-bourhood, it is typical in downtownBudapest only in those areas where newhousing construction took place due todemolition or the regeneration of brown-field sites. The old housing stock was lessaffected by the process of gentrification.Therefore, gentrification in the traditional

    sense can be pointed out in the inner city ofBudapest geographically only in smallerareas (such as the SEMIX and Rev8 areas).

    More typical is the development of inner-city quarters towards a more heterogeneouspattern both in terms of the quality of thehousing stock and the social status of resi-dents. There are not only elite gentrifiers andalternative pioneers who contribute to theupgrading process, but also ordinary house-

    holds who prefer inner-city residential loca-tions and follow an inner-city-orientatedlifestyle. The renovation of the buildingstock is carried out not only by newcomers,but also by those who have been living in thearea for a long time. All these can be relatedto the specific pathways of post-socialistcities retaining socially relatively mixedinner-city communities.

    There is a clear similarity between the

    development of inner-city quarters inBudapest and the upgrading processes ofEast German cities where the drastic

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    displacement of sitting residents could notevolve; therefore it was labelled as softgentrification (Wiest and Zischner, 2006).

    However, the gentrification process taking

    place in Budapest is soft not because ofthe high vacancy rate in the rental marketand extensive public investments, like inEast Germany, but mainly due to theextreme weight of owner-occupation and

    certain control of the districts local gov-ernment. Our examples also demonstrate

    that the regeneration of neighbourhoods isdependent very much on local conditions.

    The regeneration of downtown Budapestwill undoubtedly continue in the future andthe islands of gentrification will most proba-bly expand further, pushing the gentrifica-

    tion frontier outward. However, despite the

    growing pressure of gentrification, it can beassumed that under the given circumstancesthe building stock will remain heteroge-neous in inner Budapest and a healthy social

    mix will persist in the years ahead; thus, no

    aggressive gentrification can be expected.We also envisage that the regeneration ofinner-city neighbourhoods in Budapest willresult in a pattern that we may call localised

    gentrification, which means that, due to theintervention of local governments, the pro-cess will be kept under public control. The

    geographical results of all this remain to beseen.

    Funding Statement

    This research was supported by a grant from the

    Deutsche Forschungsgemeinschaft (DFG).

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