Housing in Hungary: Debt and Degrowth
Introduction: The Housing Crisis in the Context of Financialized Capitalism
The ongoing housing crisis in many parts of the world is inextricably linked to the broader economic system of financialized capitalism. Houses, traditionally seen as a fundamental human need, have become increasingly treated as a commodity, subject to market forces and speculation. This transformation has led to rising house prices, increased debt burdens for individuals, and widespread insecurity. In this context, the concepts of indebtedness and degrowth offer valuable frameworks for understanding these issues, but houses requires a more nuanced approach within these discussions.
Housing is a unique commodity in that it is not just a product bought and sold in a market, but a fundamental component of social reproduction. It serves as both a physical structure and a space for community, security, and identity. The financialization of houses—where real estate is treated as an asset for investment rather than a space for living—has led to profound social and economic consequences. To understand these dynamics, we must also adjust traditional degrowth arguments to account for houses’ particularities and its role in the capitalist system.
Indebtedness in Houses: A Unique Form of Debt
In financialized capitalism, indebtedness has become one of the main ways in which individuals are integrated into the capitalist economy. House debt, in particular, is a central element of this process. However, house debt is distinct from other forms of consumer debt. It is often long-term, secured against an asset (the home), and tied to fluctuating market values. This structure of debt can create a cycle of financial instability for households, especially when houses prices rise uncontrollably.
House debt is unique because it is often seen as an investment rather than just a liability. For many, owning a home has been positioned as the key to financial security. However, in markets where house prices continually rise due to speculation and financialization, people become trapped in debt, making homeownership a precarious endeavour. For renters, the situation is similarly bleak, as rising rent prices outpace wage growth, leaving tenants vulnerable to displacement and precarity.
Moreover, house debt reflects broader systemic inequalities. Access to credit is often unequally distributed, and people from lower socioeconomic backgrounds are disproportionately burdened with high-interest loans or subprime mortgages. This dynamic not only exacerbates wealth inequality but also entrenches financial dependency, turning house into a vehicle for the extraction of wealth from working-class families to global financial institutions.
Given the central role house debt plays in both individual and collective indebtedness, it is critical to approach this issue through a framework that considers its structural and systemic dimensions, rather than simply as an individual problem of consumer behaviour or financial mismanagement.
The Concept of Degrowth and Housing
The degrowth movement, which critiques the idea of perpetual economic growth and advocates for a shift toward more sustainable and equitable systems, is particularly relevant to the house question. Degrowth theorists argue that current economic systems are both environmentally unsustainable and socially unjust. They highlight the need to reduce the material and energy demands of capitalist societies while prioritizing well-being and social equity (Kallis, Demaria, D’Alisa 2015).
In terms of housing, degrowth requires a rethinking of how we approach the built environment. The push for continuous urban expansion, ever-larger homes, and endless suburban sprawl is environmentally destructive and inefficient. Degrowth calls for the redistribution of housing resources, the reorganization of urban spaces, and a reduction in the commodification of land and housing. However, degrowth’s critique of growth-oriented development must be adjusted to reflect the unique characteristics of housing, which cannot simply be treated like any other commodity.
Unlike other goods and services, housing is not only an economic asset—it is a critical part of social reproduction, the process through which society reproduces itself from one generation to the next. This makes housing inherently different from other market goods and necessitates a different approach in degrowth thought. Housing must be seen as a commons—a collective resource that should be democratically managed for the benefit of all, rather than as an asset to be exploited for profit.
The Need to Commodify Housing
One of the core claims of degrowth, especially about houses, is the need to deco modify houses. This means removing housing from the speculative markets where it is treated as a financial asset and instead viewing it as a basic right that serves human needs rather than profit motives. Decommodification would involve policies and actions aimed at reducing or eliminating the private ownership of housing in favor of more collective or public models, such as social housing, cooperative housing, and land trusts.
Historical evidence supports the claim that market relations have never provided affordable houses for all members of society. In fact, the commodification of houses has led to profound inequality, as house markets favour investors, landlords, and developers over ordinary working people. Therefore, deco modifying houses is an essential step in ensuring that everyone has access to adequate shelter without falling into the traps of debt and displacement.
The Historical Example of Eastern Europe: The Case of Hungary
The example of Eastern Europe, particularly Hungary, offers important lessons in the limitations of state-run house systems. During the period of state socialism, Eastern European countries saw public property as the primary solution to the house crisis. The state was responsible for managing house, and the idea was to provide affordable shelter to all citizens, especially in rapidly industrializing cities.
However, as the Hungarian example illustrates, public ownership of house does not necessarily guarantee more equitable access. In Hungary, the distribution of housefavored the intelligentsia (intellectuals, professionals, and state officials) over the working class, exacerbating social inequality. While public property was intended to solve the house crisis, it was still subject to state priorities and bureaucratic inefficiencies, which led to uneven access to house.
Furthermore, by the 1980s, private ownership and private construction began to rise, particularly in rural areas. After the fall of state socialism and the transition to capitalism in the early 1990s, privatization of the house stock became a major trend, leading to the sale of public houses to private individuals. Currently, 90% of Hungarians live in owner-occupied houses, and only 1% live in municipal houses. This shift toward privatization has made houses increasingly unaffordable for many, as property values have skyrocketed and the rental market has become largely privatized.
Other forms of deco modified houses, such as cooperative houses or co-housing initiatives, remain rare in Hungary. While these models are often promoted as alternatives to the privatized house market, they face significant barriers, including a lack of support from the state and resistance from private developers.
Moving Forward: The Need for Civic Control of Houses as Commons
To address the house crisis and move toward a degrowth society, new models of housing must be developed—models that prioritize community, sustainability, and social equity over profit. One possible solution is the creation of housing commons, where communities or local governments collectively manage housing to ensure affordability, sustainability, and access for all residents.
Civic control of housing could take the form of land trusts, cooperative housing arrangements, and municipally managed housing that is not subject to the whims of the speculative market. These alternatives would move housing away from being a commodity for investment and back toward being a space for human flourishing. Additionally, the growth of cooperative housing and co-housing initiatives should be actively supported, as these models can foster stronger communities and more sustainable ways of living.
In conclusion, housing in a degrowth society must be seen as a commons—a resource to be managed collectively and democratically for the benefit of all. By modifying housing and embracing alternative models of ownership and control, we can begin to build a housing system that is equitable, sustainable, and just.
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