The paradox in the privatization of Hungary's public housinhg: a national gift or a bad bargain?1

Zsuzsa Dániel

The Economics of Transition, 1997, vol. 5, issue 1, 147-170

Abstract: The vast majority of Hungary's publicly owned, rental housing, once heavily subsidized, has passed through privatization into owner‐occupation. Most tenants hoped to gain a financial advantage by privatization. This study sets out to discover how far such expectations have been met. Bearing in mind the cost of neglected renovation, what does a new owner gain by acquiring ownership of the dwelling and what costs does he or she incur? The study shows that privatization has presented the tenants, who had already benefitted from subsidies, with a sizeable ‘national gift’. The bigger and better the home they rented, the greater their privatization gift. However, there is a paradox to analyse: why has the gift proved a burden to many recipients? The study also looks at how the adaptation occurring in the housing sector might be improved and how the losses of those who find themselves in a predicament after privatization might be reduced.

Date: 1997
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