Hungarian Workers in the Housing Energy Crisis – Issues and Community-Based Solutions

The housing energy crisis has become an increasingly critical issue, affecting communities worldwide. This challenge has gained significant attention due to the intertwined nature of housing affordability, energy access, and the broader economic consequences, particularly in Europe. One of the core reasons for the current state of housing energy crisis insecurity is the financialization of housing, which has become more pronounced since the 2008 financial crisis.

This process has changed the way housing is viewed—transforming it from a social good into a speculative commodity. The result has been an erosion of affordable housing, leaving many struggling to access quality homes. The situation is particularly severe in Central and Eastern Europe (CEE), where the effects of this transformation are most felt.

The Financialization of Housing

Following the 2008 global financial housing energy crisis, once again emerged as a site for profit-seeking, driven by economic actors seeking stable investment opportunities. Financialization refers to the growing tendency for housing to be treated as an investment asset or speculative commodity, rather than as a basic need for shelter.

In many cases, this is due to the lack of equally safe or lucrative investment opportunities in the broader economy. As such, housing markets have attracted increasing amounts of capital, often from large-scale investors, financial institutions, and even foreign speculators. This surge in financial capital entering housing markets has resulted in rising property prices, which has made it increasingly difficult for those who seek homes for actual living purposes to compete.

The consequence of this shift is clear: housing prices are rising, and people are finding it more challenging to access affordable and quality housing. In cities and metropolitan areas, where demand is highest, the growing wealth gap between property owners and renters is widening. The speculation-driven increase in housing prices serves the interests of those with capital to invest but leaves the majority of the population struggling to find decent housing within their means. This process is inherently detrimental to households that are already financially strained, thus deepening housing inequalities (Aalbers, 2008).

Government Withdrawal and the Impact on Housing

At the same time that financialization is exacerbating housing inequality, governments across Europe, including those in Central and Eastern Europe (CEE), are steadily withdrawing from active involvement in housing markets. Public housing, once a central part of state responsibility, has been increasingly reduced or eliminated in favor of market-driven solutions.

In many European nations, housing policies are being reoriented to prioritize the interests of middle-class homeowners through various subsidies and tax incentives, rather than the direct provision of affordable housing options (Bródy, Pósfai, 2020).

In most cases, this shift has left the responsibility for addressing housing issues to market actors and individual households. Market actors, including private developers and landlords, have not shown sufficient interest in creating affordable housing options for lower-income populations, preferring instead to target more lucrative segments of the housing market. For households, this means an increasing reliance on a housing market that is increasingly unaffordable, under-regulated, and poorly equipped to meet the needs of those without substantial financial resources.

The Situation in Central and Eastern Europe

In CEE countries, these broader trends have been particularly pronounced. Since the 1980s, countries in this region have faced growing housing inequalities and an increasingly severe housing  energy crisis. This crisis is partially the result of the historical shift from centrally planned economies, in which the state played a dominant role in housing provision, to market-based economies in the 1990s and early 2000s. With the collapse of socialist systems in the region, the privatisation of housing and the withdrawal of the state from housing provision created an environment where market forces had to meet the demand for housing, but without sufficient public oversight or regulation.

In these countries, the public housing stock is extremely limited and provides housing for only a small portion of the population. In fact, housing in the region is overwhelmingly privately owned, with more than 90% of the housing stock in countries such as Hungary and Slovakia being privately owned (Tagai, 2019). This level of private ownership is far above the European Union average, where around 65% of housing is owner-occupied. While private ownership can provide greater security and autonomy for some individuals, it also contributes to a lack of affordable housing options for others, particularly renters.

Challenges in the Private Rental Sector

The private rental sector in CEE countries is often small, underdeveloped, and highly unregulated. With minimal government oversight, renters in these countries face a number of challenges like energy crises, including high rents, limited tenant protections, and poor-quality housing energy cries. In many cases, rental prices in urban areas are prohibitively high for the majority of the population, making it difficult for lower-income households to afford decent housing. Additionally, the lack of regulation means that landlords are often free to increase rents at will, without the checks and balances that might protect tenants in other parts of Europe.

As a result, many people are either forced to accept substandard living conditions or to live in increasingly precarious rental arrangements. The absence of long-term rental contracts, rent controls, and other protections against eviction creates an environment of uncertainty for renters, exacerbating housing insecurity. Without sufficient affordable rental options, people are left with limited choices—either to purchase homes that they cannot afford or to live in inadequate housing that further diminishes their quality of life.

Privatization, Ownership, and the Absence of Public Housing

A significant aspect of the housing energy crisis in CEE countries has been the rapid privatization of housing stock in the post-socialist period. In the late 20th century, large portions of state-owned housing were sold off to private individuals, and a culture of homeownership was promoted as the ideal. While this shift initially seemed to provide greater individual autonomy and wealth accumulation opportunities for some, it also led to a major decline in public housing availability housing crisis. Today, very few publicly owned rental properties remain, and in their place, governments have often resorted to subsidizing homeownership for middle-class families, further marginalizing lower-income renters.

This privatization trend has led to a housing system that disproportionately benefits those who can afford to own homes, while renters are left with fewer options and greater insecurity. In CEE countries, state-run programs aimed at improving housing quality or expanding public housing have been insufficient to meet the growing demand for affordable homes. In many cases, the absence of public housing programs has left the most vulnerable populations with inadequate living conditions and little recourse for improvement.

The Ageing Housing Stock

An additional issue contributing to the housing crisis in CEE countries is the ageing housing stock. A significant portion of the housing in the region—estimated at 80-90%—was constructed more than 30 years ago, often in the 1960s and 1970s using prefabricated solutions (Tagai, 2019). These buildings, which were once part of the industrial boom of the socialist era, have now become outdated and are in need of significant renovation and modernization.

The costs of maintaining and upgrading these aging structures are a growing burden for residents, particularly in low-income households where resources for renovation are limited. In many cases, these buildings suffer from poor insulation, outdated plumbing, and inadequate heating systems, making them less energy-efficient and more expensive to live in. For renters, the lack of adequate maintenance by landlords only exacerbates the issue, as the financial incentives to renovate or upgrade properties are often non-existent in a market where rents are capped at unaffordable levels.

Conclusion: A Growing Crisis with Few Solutions

The housing energy crisis in Europe, particularly in Central and Eastern Europe, is a multifaceted problem that requires urgent attention. The financialisation of housing, the privatization of housing stock, the underdevelopment of rental markets, and the withdrawal of the state from housing provision have combined to create a crisis that has left many without access to affordable, quality housing. Without substantial policy reforms and a renewed commitment to providing affordable housing options for all, the housing and energy crisis in the region will only continue to worsen, with far-reaching social and economic consequences.