A ‘bulldozer-shaped urban regeneration’

Corvin Promenade in Budapest

Krisztina Keresztély, 2016

Józsefváros: a controversial popular neighbourhood in the centre of Budapest

Józsefváros or ‘Joseph town’, named after the Austrian emperor, Joseph the Second, ¹ is situated in the eastern part of central Budapest, in the intermediate area between the city centre and the peripheries. The total area of Józsefváros is 685 hectares. It is one of the most deprived and controversial urban areas of Budapest, representing an extraordinarily rich built heritage, a great part of which was constructed in the second half of the 19th century. The district has always been divided into two parts. In its inner part, located inside the Grand Boulevard also called ‘the Palace Quarter’, a number of national and municipal-level institutions were built, together with palaces of the aristocracy. Outside the Grand Boulevard, Józsefváros was traditionally the area of workers, owners of small industries and retail. Here the built environment became much more heterogeneous: traditional ‘bourgeois’ four floor buildings are mixed with smaller buildings with workshops in their courtyards. This pattern is cut at certain points by larger housing estate blocks, as a result of the urban policies of the 1970s- early 1980s. In the more peripheral parts of the district some area-consuming functions (railway, warehouses, factories, large markets) and some relatively higher-status residential enclaves arose. Population reached its peak between the two world wars, with 100,000 inhabitants. By that time, Józsefváros, especially its central part, had become one of the most congested and least prestigious parts of the capital. After WWII, the area became subject to physical and social decay, due to artificially low rents, poor maintenance, lack of renewal, and an ageing population, as well as the arrival of low-status, and frequently, Roma families in the 1960s and 1970s.

In this run-down and socially problematic neighbourhood, urban renewal policies have had to tackle a double challenge. The central location of the district in the city offers some highly attractive real estate opportunities in certain areas (in the neighbourhoods situated next to the Grand Boulevard), while the run-down and stigmatised character of other neighbourhoods became a major obstacle for any further development of the whole district. As a result of this general stigmatisation, Józsefváros, the 8th district of Budapest is on the way to becoming THE multi-ethnic low status neighbourhood of Budapest, a sort of ghetto, where problems of security, drug consumption, homelessness and ethnic discrimination are more or less consciously maintained by local and national policies… A kind of hot place in the city, the area became a popular subject of films, surveys, studies, ‘creative’ urban projects, sociological promenades…. Apart from the need to discover unknown parts of the city, these representations raise questions of great importance for our recent society – such as the situation of minorities, immigrants, poor people… The 8th district is in that sense a laboratory of Budapest.

Urban renewal has only been on the political agenda since the mid-1990s, although plans and debates concerning certain areas date from the 1980s. One of these areas, Corvin-Szigony, finally became the object of a complete urban restructuring, which has been in the process of implementation since the 2nd half of the 2000s.

The challenge for the Corvin neighbourhood

The area is situated at the intersection of the inner and central parts of the 8th district. Acceding to the division of the 8th district by its urban development strategy prepared in the 1990s, the area of Corvin neighbourhood (also called ‘Centre of Józsefváros’): on a surface of about 22 hectares, the area counted 12,500 inhabitants in 2003, a relatively large part of them belonging to Roma minorities (approx. 20-30%). In spite of the high rate of privatisation of housing all over Budapest during the 1990s, in this neighbourhood the share of public housing remained comparatively high. In 2003 (already after the end of the great peak of privatisation) almost 39% of the flats were in public ownership (as opposed to 26.6% in the district, and 8.5% in the city).

The area was characterised by poor quality housing: 60% of the flats were categorized as being without any comfort, 70% only containing one room. Local society was stigmatised and of low status, with low levels of education, high percentage of unemployment, etc.

On the other hand, the particularly good location of the neighbourhood in the prolongation of the city centre offered it the challenge and potential success of a complete restructuring, in terms of its social/architectural characteristics as well as its overall position within the city.

A clash of urban renewal models

After 1990, the political transition and the introduction of a democratic system of local governments, management of the city of Budapest became extremely difficult. Since that time, the city has been divided into 23 districts, all of them led by independent elected bodies. To this was added the level of the Municipality of Budapest, which possessed few competencies over the districts. All those local governments obtained the competency of independent fiscal policies, based on proper incomes, ownerships, subsidies and obligatory tasks to be fulfilled. The weight of central subsidies in the local budgets decreased year by year; therefore, the municipalities had to opt for complementary resources. One important resource came from selling the housing stock that had previously been transferred from the state to local governments. ²

Urban regeneration became a challenge for each district situated in and next to the city centre; districts upgraded their central areas and vied to become more competitive and attractive as compared to other districts. This challenge was translated into diverse forms of urban regeneration. Although methods were (and are) quite different, the main objectives remained the same: to achieve a complete restructuring of these areas through renewal of the physical environment (buildings, streets, public spaces) and a change in the composition of the local population by attracting higher status middle class persons.

This basically discriminative approach to urban renewal was of course nuanced by political and economic interests and the methods used in the different areas. To a lesser extent, it was also nuanced by some alternative proposals.

The case of the Corvin neighbourhood shows clearly the dichotomy between the approach supporting the direct economic and political interests of the district and the socially sensitive approach, which aims to save as much of the popular neighbourhood as possible. Debates running for decades between the two approaches finally ended up in a sort of hybrid solution that was presented, at the level of political discourse, as a compromise between economic and social interests but in reality clearly tipped the balance towards the former.

In the 1980s, an initial plan suggested continuing construction of prefabricated housing estates in the district in order to clean up the neighbourhood. Fortunately, this solution could not be implemented.

In 1992, a plan presented by the architect Anna Perczel (known today mainly as the initiator of the civil movement for the protection of the Historical Jewish neighbourhood of Budapest), called ‘Green Promenade’ was still in line with the objectives expressed by the district council of that time: preserving as much of the urban fabric and local society of the neighbourhood as possible. The proposal was based on the idea of opening and linking the inner green courtyards of the buildings and to create a natural promenade in the district that would have stayed open for the public during day time. The project only planned minimal demolishing and intended to maintain the low intensity construction that characterised the area. As a result of the latter, the project lacked a stable financial foundation, and in the long run it was not acceptable to local leadership in need of profit-oriented real estate policies.

In 1995, the Józsefváros local government, the Budapest City Government and the Ministry of Environment and Regional Development made an agreement for the common financing of the renewal of the Corvin area. At that moment, two political and economic interest groups had formed. The first one intended to establish here the French SEM (Société d’Economie Mixte) model, already in practice in the neighbouring 9th district with the strong participation of the French investment bank, the Caisse des Dépôts et Consignations. The second one aimed at introducing another French model, the so-called ‘Pact Arim’ by creating a partnership with the development group called ARIM Alsace. While the first model was based on a step-by-step (or block-by-block) rehabilitation of the delimitated action area, the second would have offered the possibility of a more integrated development of the area based on the ‘pact’ to be concluded between all stakeholders: the ministry, city, district, representative bodies of tenants and owners, etc. Finally neither of the two solutions was adopted. The first was rejected by the Municipality of Budapest and the Ministry (they would not have had any place in the project, as the SEM company would have been composed of the French investment bank and the local municipality). The second was rejected because it was impossible to make any joint agreement between all the stakeholders (for instance in Hungary and especially in such a stigmatised neighbourhood, tenants do not have any representative bodies) (Zolnay,s.d.).

Finally, a third solution was adopted: the Budapest Municipality and the 8th District created a public for-profit company, RÉV 8 Ltd., to manage urban renewal and urban development projects in the district. Ownership was divided as follows: 51% of the shares were owned by the district municipality, 40% by the Budapest Municipality and 9% by the Hungarian Bank OTP.

As a first step, RÉV 8 developed the Urban Renewal Strategy of the 8th district, dividing the whole area into neighbourhoods. According to this division, central Józsefváros corresponds to the territory of Corvin, where planners suggested a deep urban restructuring of the urban and social fabric, using the high real estate potential of this area resulting from its location. Another area, the Magdolna neighbourhood, situated north-east of Corvin, was on the other hand designated for a ‘softer’ urban regeneration, with retention of the local population and gradual renovation of the housing stock with the participation of local tenants (see the Magdolna neighbourhood case study). Both operations started in the mid-2000s under RÉV 8 management. An observer may easily have the impression that the parallel launching of these two urban renewal operations cannot be simply ‘accidental’. It is more likely the result of a search for compromise between the two approaches regarding the whole district: maintenance of a popular area and its inhabitants versus cleaning the area and creating a new ‘city’. In reality, this compromise is not a real one. The complete restructuring and creation of a new ‘city centre’ in the Corvin neighbourhood was based on the relative attractiveness of this area for private real estate developers, due in great part to its advantageous location within the city: next to the Grand Boulevard in the extension of the city centre, surrounded by high level institutions (Medical University, hospitals, museums, etc.). Such a large scale investment plan would never have been realistic in the case of the Magdolna neighbourhood, situated in the backyard of the district and of practically no interest to real estate investors. In this context, the first period of social participative urban renewal in the Magdolna neighbourhood can also be seen as a response to the extremely profit-oriented character of the Corvin renewal scheme.

The Corvin Promenade project

Corvin promenade is a typical urban renewal project based on the almost complete demolition of a traditional neighbourhood, to be replaced with high rise buildings and a large commercial centre, all this organised around a ‘fancy’ open square (‘THE Promenade’), reflecting Hungarian architecture’s contemporary taste regarding open spaces: lots of concrete interspersed with a few green areas.

After a number of years of searching for investors, in 2004 the Municipality could launch its partnership with the sole investor: Futureal Ltd. According to the contract, the demolition of buildings in the project area was the responsibility of the local government and plots were sold to the developer following demolition. Futureal Ltd. was in charge of preparing the plots (provision of utilities) and programming the development of local services (schools and health care) according to the number of dwellings to be constructed. The municipality required the developer to hire unemployed people and to contract with local SMEs for demolition work and the reconstruction of roads. The company was also in charge of the development and maintenance of public spaces. 68 million euros were invested on behalf of the 8th district local government for the preparation of the plots and delocalisation of inhabitants. Of the 2500 public and private dwellings in the area, 1100 have been demolished and 1400 maintained for renovation.

Construction work began in 2006, and in spite of the original deadline of 2012, half of the area is still abandoned or ‘under construction’. The 2nd phase of the project was completed in October 2013, and further sections of the new neighbourhood are still planned to be constructed by the end of 2015.³

Unfortunately we have no data or assessments of the ‘success’ of the project, either with regard to the proportion of empty flats or to the effects of the financial crisis in the area. Nevertheless, we do have some global data on the decrease of new housing constructions in Hungary since 2008 (Egedy, 2012): in 2011 alone, the decrease was 40% and on the large number of empty flats according to recent estimates, there are at least half a million empty flats in the country (Hegedűs, Lux, Teller, 2013). This data lets us suppose that the crisis did not spare the Corvin neighbourhood either. In spite of this, the complete restructuring of the area itself is now clearly visible: not only in the new neighbourhood, but to a lesser extent in its surroundings as well: well-dressed middle-class fathers taking their children to the local kindergarten are the first signs of such social transformations.

The social element

The ‘specificity’ of the Corvin Promenade project in Budapest is considered to be its ‘social element’. According to the objectives of the operator REV 8, 600 households needed to be delocalised, 230 of these held by tenants and 370 by home owners – a relatively lower number of households than that of the housing units designated for demolition. REV 8 has committed to ensuring a high level of assistance for the delocalised households.

There were two possibilities for people living in the area:

• obtain financial compensation: for owners compensation according to the market price of the dwelling, for tenants, up to 70% of the market price;

• to be relocated to another dwelling in the district or nearby.

For this second purpose, 300 housing units were purchased and 200 units constructed by the municipality. The latter were mainly assigned to households who were owners and went through a tendering process launched by the municipality. The majority of these flats are located in a building that was constructed next to the Corvin promenade area before launching the demolition.

The innovative character of the project, as underlined by the operator REV 8 was that they followed every family from the beginning of the delocalisation process until the end. “First of all, we made a sort of survey, to understand what kinds of people are living here and how we should approach them. A large part of them were Roma so we asked sociologists to help us understand their situation in order to work out the best way for communication” – says one of the former representatives of REV 8, responsible for the social element of the program⁴ . “We understood that the local society, and within this, Roma society, was strongly levelled, therefore we decided to deal first of all with the families without having any specific regard on their ethnical appearance.” According to this person, while working with those families in order to find them the best solution, the operator company compensated for a severe lack of local policies: for instance, it provided a sort of social assistance by helping families to pay their bills and rents as only persons without debts could ask to be relocated.

According to the social workers and the project leaders of REV 8, the inhabitants of the neighbourhood were mainly content to be able to leave the rundown area and move to better quality housing. “We dealt with each person according to their needs and it worked. Some people were really enthusiastic about moving in a better home”, stated the project leader. According to a Roma activist-journalist, some Roma families she knows were happy to move elsewhere and they have chosen to move to better areas even if that caused them extra costs and sometimes financial difficulties. “It is just a prestige for them to move in a more ‘Hungarian’ neighbourhood”, she claimed⁵ .

In spite of the positive image given by the operator, one may find more controversial opinions.

First, the financial compensation, even though it was based on the market, did not provide a satisfying solution to everyone. For instance, in the case of a 30m2 flat the price was so low that it could not cover the purchase of another flat – at least not in the neighbourhood or even not in the city. (Rev 8 employees argued that to avoid this problem they helped people thinking over their choices.) Second, according to the opinion of a person moving into the ‘house of owners’, even the allocation of new flats was not always fair. For instance people who agreed to move to a smaller flat obtained priority independently of their original claim or family conditions.⁶

Unfortunately no surveys or evaluations have yet been conducted to show the paths of relocated families – although 4-5 years after the launching of the procedure such observation would be feasible and important. One must mention that until now very few surveys of this kind have been conducted in Budapest in spite of the already relatively high number of relocations due to the different urban renewal programs in the city. Is it a lack of interest on behalf of sociology or just a lack of financial possibilities? Both reasons are possible.

Sources

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