From social urban renewal to discrimination

Magdolna neighbourhood programme in Budapest

Krisztina Keresztély, 2017

Magdolna was designated to host the first socially sensitive urban renewal project of Budapest, where citizens’ participation was designed as a key element of the programme. Since then, Magdolna neighbourhood became a label for ‘social urban rehabilitation’ in professional circles in Hungary, and even in the surrounding East Central European region. This paper shows how the initial concept of this project and of its participative element has been spoiled by continuously changing social, political and economic circumstances and how Magdolna Program gradually became the target of discriminatory measures under right-wing ruling policies.

General data:

  • Budapest: 1.7 million inhabitants (2013)

  • Józsefváros (VIII. District): 77,000 inhabitants (2015)

  • Magdolna neighbourhood: 13,000 inhabitants (2013);
    47% supported by social care system. 20-30% of the households are Roma. 5500 housing units, 40% of them public housing, low level of comfort

The challenge: social and territorial context in Magdolna neighbourhood

Magdolna neighbourhood is one of the most destitute areas of Józsefváros, the 8th district of Budapest1 . Józsefváros itself is considered a very controversial part of the city, consisting of areas of very different social and urban status. The ‘Neighbourhood of the Palace’ zone, next to the city centre is, for instance, a progressing area where systematic urban renewal is coupled with increasing cultural and tourism functions. Next to this zone, in the framework of the biggest urban regeneration project of Budapest, an entire destitute zone called the ‘Corvin neighbourhood’ was demolished and replaced by large-scale real estate development. This project was conducted and organised by the district’s urban development company: RÉV 8.

Magdolna neighbourhood, Budapest (OpenStreetMap

Magdolna neighbourhood is an enclave situated to the north of the Corvin project area. The area had a population of 12,068 on 43 ha in 2001. Hosting 15% of the entire population of the district, it receives 47% of all social subsidies targeted for Józsefváros. Between 20% and 30% of its population are Roma. The housing stock dates from before WWI and is generally in poor condition; more than 40% of 5564 housing units remain in public (district) ownership. That is an extremely high percentage in light of the national average of 3%! The area is characterised by typical problems of stigmatised neighbourhoods, such as concentration of the poor and unemployed, high crime rate, rundown physical environment, etc. The area’s stigmatisation is reinforced by certain policies on the city level, such as the high concentration of day care service centres for homeless people.

The above-mentioned areas as urban entities were first determined by the urban development strategy of the district in the beginning of the 2000s. According to this strategy, Magdolna was designated to host the first socially sensitive urban renewal project of Budapest, where citizens’ participation was designed as a key element of the programme. Since then, Magdolna neighbourhood became a label for ‘social urban rehabilitation’ in professional circles in Hungary, and even in the surrounding East Central European region. But the initial concept of this project and its participative element has been spoiled by continuously changing social, political and economic circumstances and how Magdolna Program gradually became the target of discriminatory measures under right-wing ruling policies.

A social urban renewal project in a changing political and economic environment

The idea of social urban renewal emerged in Budapest as an urban policy concept in the beginning of the 2000s and was integrated into the mid-term development strategy of the city, the Podmaniczky programme adopted in 2005. Contrary to traditional urban renewal practices that have been generally limited to the physical revitalization of urban areas, Budapest’s attempts at social urban renewal were targeted at the integration of underprivileged neighbourhoods through diverse social, economic and cultural programmes. Three possible pilot areas were designated by the strategy and Magdolna was chosen from amongst them. The Magdolna neighbourhood program was launched in 2005 by the district’s operator, REV 8 Company.

The programme has undergone deep transformation since its beginnings. Its first phase (2005-2007) was financed in most part by the Budapest Municipality (€2.76 million) and to a lesser extent by the district municipality (€ 520,000). The EU contribution was very modest with only €72,000 for the renewal of the area’s main public square. Inspired by the Birmingham urban renewal programme and the Soziale Stadt programme in Germany, the Magdolna project gives evidence of a holistic approach. Its objective was to empower the local population with social and economic actions and to achieve the renewal of the housing stock with the involvement of inhabitants. In contrast to most renewal programmes in Budapest, the social renewal aimed at keeping residents in the area. RÉV 8 Development Company obtained a great deal of autonomy in the management of the programme.

The second phase (2008-2011) was conceived and implemented under ERDF funding as part of the Regional Operational Program of the Central Hungarian Region. Furthermore, this second phase was also determined by the changing economic and political conditions on the local as well as on the national levels.

In 2008, the resignation of the mayor of the district changed the political context: strong political support for the Magdolna programme suddenly ceased with the arrival of the new mayor affiliated with the conservative party (FIDESZ). The main conceptual framework of the project, based on public participation, community building programs and structural renewal of buildings did not coincide with the spirit of the new leadership, which demanded visible and quick results such as clean and nice facades, public order, etc. Further, in 2008 a series of legal proceedings had been launched against REV 8 Company and one of its main partners, a private real estate company, accused by violation of VAT rules and other financial misuses in the framework of the large-scale regeneration project in the Corvin area. The procedure lasted until 2011, and although there were no concrete indictments it had a clear negative effect on the company’s political position. A general mistrust developed on the part of the local leadership vis-à-vis of the company and to a certain extent, the Magdolna programme.

A second political transformation in district leadership took place after the 2010 elections, when the right wing party FIDESZ obtained an absolute majority in the district government – reflecting similar tendencies in Budapest and nationally. This transformation had only limited effects on the second phase of Magdolna project, as it had already been launched in the framework of a European Union contract, but it brought up several difficulties later, during the continuation of the project.

Bureaucratic and centralised perception of local development became a dominant feature of the new political era in Hungary after 2010. This vision and others are reflected in the act modifying the local government system in 2011. In this strongly centralising political atmosphere, conditions of governance are abolished and, as stated by the manager of RÉV 8 Company, “everything is getting back to the traditionalist concept of a centralised government”. Heavy political bureaucracy has slowed all procedures and in some cases may even lead to the loss of certain partners or funding possibilities. This was the case when, following the end of the second phase of the Magdolna programme in 2011, REV 8 launched a new ERDF tender for funding the third phase and its request was refused for formal reasons. As a result, sustainability of several project elements became doubtful. Some programs had to stop or be reduced; the number of employees of the operator had to be diminished from 35 to 5.

Controversially, despite the changing political and economic context, it was under the second phase that the area went through some really visible transformation, as the higher amount of EU funding permitted a larger scale of renovation of buildings and also of public areas. And although economic and political conditions worsened after 2008, the Magdolna project’s third phase, launched in 2013, will comprise an even larger scale renovation due to funding that is higher than in the two previous phases.

From participation to discrimination

The main elements of the first phase of Magdolna project were as follows: (1) rehabilitation of housing, (2) improvement of public spaces, (3) establishment of a community centre, (4) improvement of schools and educational opportunities, (5) prevention of juvenile delinquency, (6) development of employment opportunities and economic activities and (7) provision of local cultural, social and health services. The key innovative concept of this phase was participation: physical renovation work in the area included involvement of the local population.

This experimental approach to social urban renewal made it possible to launch some work in this stigmatised area with only modest financial investment. Renovation work was limited to small interventions such as changing main entrances (magnetic locks), mail-boxes, cleaning cellars, embellishing courtyards, etc. This part of the project concerned four municipal buildings for an average price of €300,000 per building. Residents were involved from the beginning, from the ‘planning process’ until the actual work was done: they were mainly responsible for soft works (planting gardens, cleaning cellars, etc.) while REV8, the municipal operator, was engaged in the renovation work demanding more expertise.

The assessment of this element of the programme is ambiguous. On the one hand, we can speak of an experimental program, carried out with only limited resources, and targeted towards the involvement and active participation of people accustomed to being rejected by society and who are therefore generally suspicious towards all kinds of public programs. Seen in this way, the first phase of Magdolna was mostly successful. Four buildings were improved, and people recognised that their living environment got better than it had been before. On the other hand, following the interviews realised with some residents, their involvement was not as clear as had been planned in the beginning: complaints were presented concerning the lack of information and coordination, the poor quality of materials, etc. Further, residents who were involved in the improvement works were also tenants, paying their rental fee to the municipality. These tenants were not granted any decrease in or partial exoneration of their rent. In a way, they were working for free on the improvement of a property where they were only tenants. (Not to mention the increase of rents later, as a result of improved living conditions.)

In the second phase (2008-2011), methods and concepts were quite different. Physical renewal became the core element of the project, concentrating 60% of funding. This dominant element was completed by so called ‘soft’ programs such as community development, reinforcement of the local civil sector, crime prevention programs and integration of homeless people, training and employment for the unemployed, job-seeking services, education services, and a contribution to the development of the local economy. Direct involvement of local inhabitants, especially in the physical renovation, a basic concept of phase one, disappeared.

According to the operator, these changes were mainly due to the severe requirements presented by the ERDF tender that did not permit the same level of flexibility in the design and follow up of the project as the first phase funded by the municipality. As a result, residents’ participation could not have been integrated into the physical renovation part of the program. “It was impossible to involve them into the planning process as planning had to be realised already in the first round of the tender”, the operator stated. Although contacts with local inhabitants were maintained and community building remained an important part of the whole programme, inhabitants could not have been involved in the programming or the decision-making process.

The operator REV 8 was also criticised by social media and other social movement platforms for the weakness of its participatory approach and the community development program (including, for instance, the weakness of the neighbourhood council that had been created in 2010). In order to preclude such contradictions, in the third phase (2013-15), a special appendix was enclosed with the tender determining the type of communication and participation related to each element of the project. According to this, the participatory planning method was only used for the renewal of one square in the neighbourhood – but here this method will be used ‘one hundred per cent’.

The third phase of the programme (2013-2015) took place in an even more deteriorated political environment. While the budget had been increased compared to the previous phase, the programme resulted in several acts led by discriminative motivations. The neighbourhood that – although to a lesser and lesser extent – was home to people living in deep poverty and suffering from social disadvantages (large Roma families, unemployed people, etc.), became the most important venue of evictions in Budapest. People with rent arrears were shuffled from the area. The Magdolna programme once conceived of as the first urban renewal program aiming at the maintenance of local inhabitants in the area turned into a program aiming at creating a neighbourhood where only the ‘deserving poor’ can stay (Horváth & Pósfai, 2014).

One of several tools for this discriminative policy was for instance the designation of ‘crisis buildings’ by the municipality: ten buildings where people with rent arrears, with specific problems (drug use, lack of any rights to occupy the housing units, etc.) had been concentrated (partly as a result of previous delocalisation). Contrary to the other buildings where only the common places were renovated, not the flats themselves, in the crises buildings a complete renovation took place; sometimes even the number of flats changed. Tenants were delocalised ‘for the time of the renovation’, but the majority of them would certainly not come back to the buildings after renovation for different (financial and administrative) reasons (Keresztély, Scott & Virág, 2017).

The Magdolna neighbourhood program:

Phase 1. 2005-2008

Total budget: HUF 821 million   € 3.2 million1 out of which (founded by the municipality of Budapest and the district):

Main program elements:

  • Partial renovation of 4 municipal buildings with the participation of the tenants

  • Rehabilitation of the main square

  • Creation of the neighbourhood’s community centre through revitalization of an old glove factory

  • Educational program in a strongly segregated local school

  • Prevention of Juvenile Delinquency

Phase 2: 2008-2011

Total budget2 : HUF 1972 million (€ 7.2 million) (with ERDF funding)

Main program elements:

  • Renewal of 16 municipal housing buildings and partial renewal of 7 condominiums

  • Renewal of the local school

  • Revitalization of public spaces

  • Programming of the Neighbourhood Community Centre (events, trainings, job seeking assistance, etc.)

  • Neighbourhood patrol project

Phase 3. 2013- (2015)

Total budget3 : HUF 4298 million (€ 13.9 million) (with ERDF/ESF funding )

Main program elements:

  • Energy saving renewal in 16 municipal housing buildings

  • Complete renewal in 10 municipal ‘crisis buildings’

  • Partial renewal of 13 condominiums

  • Renovation of public spaces with participative planning on one of them

  • Programs in the Community centre

  • Social Assistance

  • Completion of video camera system in the neighbourhood

Results and evaluation

The Magdolna neighbourhood program is an extremely controversial case, the evaluation of which almost inevitably brings up political considerations.

On the one hand, the almost ten year long programme has brought a visible gentrification of the area – partly a result of the renovation work (rehabilitation of squares and streets and renovation of buildings) partly by natural development of the city, related to the upgrading of the area especially for young people and lower middle class families. Gentrification is visible through the opening of new cafés, shops, community centres etc. On the other hand, this effect is relative: according to the coordinator of MNP the ‘gentrification of the area is not an imminent danger’4. According to him, the program only managed so far to slow down further deprivation in the area and to maintain part of the lower middle class owners in the neighbourhood, but it definitely has not yet managed to reverse negative trends and launch a positive social and economic development of the area.

As for the initial goals of the programme, stressing ‘participation’ and ‘integrated development’, they remained on the level of discourse. Already in the first phase of the project the achievement of these goals was doubtful. But then, during the following two phases these principles were almost completely erased even from the vocabulary of the programme coordinators. According to the programme manager, this was mainly due to the strong requirements of the ERDF tender that did not leave room for participative planning. In our opinion this change can first be explained by financial reasons: stressing these principles as the main strategic goal of the programme was good marketing for the operator and allowed the municipality to gain access to public funding. As soon as the funding was received, the initial idea of public participation was reduced to a subject of ongoing political discourse without any concrete actions (phase 2). This approach was easy to integrate and further ‘develop’ by the right wing regime in phase 3, which aimed at cleaning the area of the undeserving poor.

Alongside these clearly negative tendencies, one must mention the positive ones as well. They are more and more visible in the area. Magdolna area, and this larger part of the 8th district, have become the centre of various social and cultural movements that actively work to improve social justice and integration. Several Community centres and events5 created during the last few years bring together young activists, working groups dealing with social and political questions, etc. Besides these places attracting a large number of young people, places and events representing the Roma identity and Roma pride are also gaining importance (Keresztély K., Scott J.W. & Virág T., 2017).

1 Budapest is divided into 23 districts that are all led by autonomous local governments. The local government of Budapest is a mostly territorial based authority, responsible for duties that concern the whole area of the capital or at least more than one district. In reality, the division of competencies and related funding is a permanent source of conflict between the two levels.

2Conversion rate in 2008

2Analytical template, Somogyi-Toscis Metropolitan Research Institute, 2011 (2011 rates)

3 Support Contract for Mangdolna Neioghbourhood Program III.

4 Personal interview, 2013

5 Such as: ’Gólya’ cooperative pub and the Auróra comunity centre


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