Modeling Post-Socialist Urbanization: The Case of Budapest 9783035616491, 9783035616460

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Modeling Post-Socialist Urbanization

To my parents, Judit and János, who dedicated their young adulthood to combating the dictatorial party state in Hungary. May they see the resurgence of the liberal democracy they had fought for.

Daniel Kiss

Modeling Post-Socialist Urbanization The Case of Budapest

Birkhäuser Basel

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Preface 9

Chapter 1: Budapest’s Post-Socialist U ­ rbanization From Facts to Model and Back

11 Three Narratives 14 The Abstract Model as a Whole 16 The Model’s Dual Character: Complementarity of the Verbal Narrative and the Systemic Scheme



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Chapter 2: The Socialist Urban Legacy ­Narrative Tensions of Socialist ­Urbanization

20 Mode of Production and Process of ­Urbanization: A Marxist Approach 22 Levels of Economic and Social Development: A Weberian Approach 25 The ‘State Mode of Production’ 26 The Socialist City as the Result of Belated Modern Urbanization Under the ­Centralized Command Economy 28 The Socialist Economy, Everyday Life, and Urbanization 36 Path Dependency: Legacies of Socialist Urbanization’s Tensions

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Chapter 3: The Decentralization Narrative Retroactive Urban Planning vis-à-vis New Local Governance and Property ­Regimes

56 58 65 78

A Combination of Crises, Rapid Change, and Stagnation From the Soviet-Type Councils to ­Decentralized Municipalities The Introduction of a New Property Regime The Persistence of Socialism’s Spatial ­Planning Regime

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Chapter 4: The Kulturkampf Narrative From the Hungarian Tulip Dispute to a Post-Socialist Clash of Ideologies 97 97 103 104

Prelude: The Socialist Mass Housing Dilemma The Tulip Dispute and the Question of an Antimodernist Turn in Architecture The Tulip Dispute Against the Backdrop of the Populist-Urbanist Polarization The Tulip Dispute and the Post-Socialist ­Kulturkampf

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Chapter 5: The Abstract Model and its Formal Scheme A Systemic Explanation

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Chapter 6: The Corvin-Quarter Emergence of an ‘Absolutely Best Plan’ in the Backdrop of Post-Socialist ­Transformation

137 ‘Little Chicago’: The Short Story of Józsefváros, Budapest’s 8th District 139 From Modernist Tabula Rasa to Soft Rehabilitation: The District’s Procrastinated Renewal 143 ‘The Big Push’ 144 Józsefváros in the Slow Lane: Setback via Budapest’s Distorted Redistributive Renewal Policies 147 Patterns of Innovation in Urban Renewal: Integrating a ‘Grand Project’ into the District Rehabilitation Strategy 152 The Corvin-Quarter as the ‘Absolutely Best Plan’ 156 Inescapable Trajectories: Vagaries of the ‘Absolutely Best Plan’ 162 Power Defines Reality: The Public Hand ­Losing Elbow-Room 167 Decisions First, Rationalization Later: The Role of Architecture Competitions 169 The Corvin-Quarter in the Public ­Discourse

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Chapter 7: Conclusions and Lookout An Abstract Model of Post-Socialist ­Urbanization Based on and Applied to the Case of Budapest

182 Delineating the Examined Time Period 183 The Book’s Apparatus and Outcomes

189

About the Author 191

Bibliography 195

Illustration Credits 199

Reflections on the Nexus Between a Case Study, an Abstract Model built on it, and General Theories A conversation between Kees Christiaanse, Ákos Moravánszky, and the author of this book

Preface Budapest’s post-socialist urbanization is incomparable in its scale and impact to anything but those transformations around the turn of the 19th and 20th centuries and after World War II, in the 1950s. Whereas the first was closely linked to a general trend towards urbanization, driven by the rise of industrial societies over Europe and encouraged by the state, while the second was marked by an ideological blueprint forced on the country by a socialist great power, the recent developments have been generated by market forces and private demand. The production of space in the two decades following 1990 generated rather particular symptoms, such as the near absence of large-scale projects of cultural and symbolic significance initiated and carried out by the public hand or the fact that urban development was mostly characterized by business-dominated development projects not integrated into any grand urban design. However, a quarter of a century after the systemic turnover, a comprehensive study of Budapest’s latest urbanization –establishing nexus between the historical background conditions, the patterns of the recent period’s socio-economic organization, and the resulting production of space – is yet to be conducted. In response to this shortfall, my major aims in writing this book have been threefold. First, I wanted to introduce an empirically deep and richly detailed single case study of Budapest’s urban development between 1990 and 2010. My second objective was that of constructing a systematic explanation of the seemingly disordered facts and micro-phenomena characterizing this recent period’s urbanization. Finally, I aimed to describe these systematic background factors in abstract terms in order to provide a base for future comparative studies of other cases in the region. Research and writing are not possible without the support and collaboration of others. In this Preface I wish to extend my thanks to the many persons, organizations, and institutions who helped make this book possible. I would like to start by expressing my gratitude to Kees Christiaanse, Ákos ­Moravánszky, and all other colleagues at ETH Zurich and elsewhere whose essential inputs have helped me a great deal throughout my work. Special thanks are due to the numerous interviewees, informants, and organizations who have placed their experiences, time, and archives at my disposal. None of my requests for interviews or access to primary documents were ever refused, including internal notes and confidential documents. I would like to express my particular gratitude to urban designer György Alföldi, former director of the Józsefváros Renewal and Urban Development Plc.; economist György Molnár, former representative in the town-council of Budapest’s 8th district and motor of the district’s renewal; urban planner Anna Perczel, author of the 8th district’s former renewal plan; and architect István Schneller, Budapest’s former chief architect, for their readiness to assist my research. My work was carried out with support from multiple academic agencies and institutions. A three-year research grant from the Swiss National Science Foundation (SNF) provided me with the necessary freedom to conduct the initial research. Support from the Institute of Urban Design at ETH Zurich made possible an intensive concluding phase of writing up and the book publication itself. 6

I would like to express my gratefulness to the editors of the publisher, Angelika Heller and David Marold, for their engagement, understanding, and thoroughness; and the manuscript’s proofreader, Alun Brown, for his meticulous feedback. Finally, I wish to thank my family and friends, whose love and care has sustained me and my work over the recent years. Responsibility for any errors and omissions in this book remains mine alone.

Preface

Zurich October 2018

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Chapter 1  Budapest’s Post-Socialist ­Urbanization. From Facts to Model and Back

Chapter 1  Budapest’s Post-Socialist ­Urbanization From Facts to Model and Back

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The subject of this book is the specific syndrome of Budapest’s post-socialist urban development, planning, and governance between 1990 and 2010. Everyday experience offers a large number of seemingly disjointed and unsystematic micro-phenomena characterizing this period’s urbanization. The book’s starting point is the observation that these phenomena are systematically related and form a pattern. The hypothesis is that their coexistence is not random, but has to do with systematic background factors that can describe both interrelations between the different phenomena and the nexus between historical legacies, characteristics of the systemic transformation in 1989–1990, and the production of space following it. This hypothesis leads to the construction of an abstract model which helps to explain the way different micro-phenomena point towards convergent outcomes that can be described as urban development generated by market forces and private demand, accompanied by the absence of coherent visions on how the city should evolve.

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Post-socialist transformation is a widespread phenomenon with numerous variations. Even if the study is restricted to Eastern European countries, their recent developments vary depending on their distinct socio-economic contexts and historic path dependencies. The first generation of studies from the 1990s and 2000s1 offered generalized accounts lacking any basis in in-depth case studies. As a consequence, these accounts had no sufficient Fig. 1. Disjointed and unsystematic micro-­ empirical material to work with, and so phenomena or a pattern that has to do with they could only provide vague descrip­systematic background factors? tions of the general trends that have characterized post-socialist transformation. For example, they mentioned the facts of excessive decentralization of the mechanisms of political decision making, the introduction of land values, and the spreading of private property. The lesson seems to be that the next generation of comparative work should be preceded by the establishment of a pool of case studies, on the basis of which the comparison and synthesis can then be conducted. This is why this book focuses on a case study of recent developments in Hungary’s capital, Budapest, as just the first in a series of studies that are to be carried out.

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historical background

systemic transformation

symptom-group

monolithic power geometry

explanatory block 1

conspicuous scarcity of large-scale public projects of cultural and symbolic significance

suppressed ideological cleavages

tensions of socialist urbanization

explanatory block 2

explanatory block 3

1947-1989

1989-1990

absence of significant top-down restructuring of the city (land-use, infrastructure, etc.)

urban development mostly characterized by businessdominated development projects not integrated into any grand urban design

1990-2010

Three Narratives Although focusing on a particular case, my book tries to interpret and explain it in terms of a general conception. For this aim, I constructed a model consisting of three explanatory building blocks. Each of these blocks establishes links between particular historical background conditions and the syndrome of Budapest’s recent urbanization (Fig. 2.). Constructing such a model is a work of abstraction: one has to set aside many particular facts in order to obtain a model capable of providing plausible explanations for the syndrome to be explained. At the same time, the model I have built is not a formal or quantitative one: it is abstract but verbal or qualitative. I will call its building blocks ‘narratives’. A narrative, in my usage of the term, is a theoretical construct that interprets and explains a story by identifying its main variables and how they are related to each other. The three narratives I will forward are not mutually exclusive but rather complementary: the story as a whole will be reconstructed as their joint outcome. The first building block could be called the Socialist Urban Legacy Narrative.2 It shows that some of the main spatial-structural phenomena of the post-socialist transformation find a partial explanation in the internal tensions of socialist urbanization. Here is an example: In their empirical study, the sociologist Iván Szelényi and novelist György Konrád found to their surprise that – despite the official propaganda according to which the socialist state has for its main aim to improve the position of

Chapter 1  Budapest’s Post-Socialist ­Urbanization. From Facts to Model and Back

Fig. 2. Model in the form of three explanatory blocks (narratives), each of which establishes links between particular historical background conditions and the syndrome of Budapest’s recent urbanization.

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the working class – the bulk of the working class was nowhere to be seen amongst the residents of the new mass housing estates. Rather, the new inhabitants were predominantly middle-class people, such as professionals, intellectuals and bureaucrats.3 Szelényi and Konrád’s finding that new public housing was allocated systematically to higher income groups4 revealed a major paradox of socialist urbanization. While replacing the market allocation of goods with an administrative allocation procedure was hailed as a means of achieving a classless, egalitarian society, what it resulted in was a new kind of inequality; one based on access to redistributive systems. After the regime change, the inequalities produced by the socialist system were cemented by an overnight privatization of housing for tenants.5 All tenants, whatever their social status and financial means, were offered the same heavily subsidized rate and could become homeowners for the equivalent of their apartment’s triannual rent. Furthermore, the introduction of the real estate market benefited and mobilized those better off, triggering massive suburbanization in the 1990s. This resulted in Budapest losing almost a sixth of its population along with a big proportion of its middle and upper-middle class.6 Socialist housing was inegalitarian not only in its allocation mechanisms but also in concentrating all its efforts and resources on mass housing satellites, neglecting the urban blocks from the period of promoterism, occupying the city’s second belt. Szelényi coined the term ‘camelback urbanization’ for the resulting slum formation between historic centers and peripheral new towns, characteristic of the socialist city.7 This trend was complemented by a parallel historical phenomenon. As the Polish geographer Bohdan Jałowiecki has pointed out8, socialist enterprises have been involved in a ‘competition without a competitive market’, which has resulted in them accumulating all kinds of resources, productive or not – even space. As a result, shortage of space had become a common phenomenon in the ‘economy of shortage’, a term coined by the economist János Kornai9. Furthermore, central urban areas became dotted by a hodge-podge of real estate in the possession of industrial firms. Thus, centralized spatial planning made – but failed to fulfill – the promise of rational land use, and this is another contradiction of socialist urbanization. After the regime change, most socialist industry collapsed. In the meantime, a return to the market evaluation of real estate was carried out. Together, these two changes resulted in the displacement of what was left from the industrial enterprises to more remote areas. The resulting combination of post-industrial wasteland and structurally weak, deteriorated neighborhoods presented the under-resourced renewal programs of post-1989 local governments with immense difficulties. Consequently, public authorities developed a laissez-faire attitude towards private investment, hoping that it would stimulate spontaneous redevelopment. Due to this, and to its favorable position within the urban topology and the availability and affordability of land there, the second urban belt has become a breeding ground for introverted cluster developments by private investors. This is how, decades later, socialism’s housing inequalities and irrational land use have led to an urban development mostly characterized by business-dominated development projects not integrated into any grand urban design. However, this relationship is not mono-causal, and my book aims to account for its complexities by including into its model two further building blocks. Let me now turn to the one I will call the Decentralization Narrative.10 In the party-state system 12

all collective decisions, whether political or economic, were taken within a single, unified hierarchy. The mono-hierarchical system favored centralized decision-making. Although the inefficiencies of extreme centralization instigated a push for decentralizing reforms from time to time, the general centralizing tendency resumed once those reforms lost momentum. After the regime change, excessive centralization was replaced, in the name of democracy, by excessive decentralization. The municipal governance of Budapest was transformed into a two-tier system, with a uniquely powerful and autonomous district level. This was the result of a specific political power geometry. In the Spring of 1990, the national elections were won by the right.11 In the fall of the same year, the municipal elections led – in Budapest as well as in many cities of the

At the same time, the modus operandi of urban planning remained largely unchanged, not properly adapted to the transformation of the economic and political systems. The resulting dysfunctionality and retroactivity of the planning regime, together with the absence of proper metropolitan governance, left Budapest without a coherent vision on how the city should develop. This, in its turn, contributed to the proliferation of business-dominated development projects not integrated into any grand urban design. The third building block of my account is what I would call the Kulturkampf Narrative.13 This establishes links between deep cultural and ideological divisions left over from the pre-war period and not allowed to be openly discussed in socialist Hungary on the one hand and, on the other hand, the failure of large-scale projects of cultural and symbolic significance to materialize decades later, after the regime change. It does so by revisiting a Hungarian architectural debate of the 1970s which led to the polarization of the architectural community, and contributed to the outburst of an all-out Kulturkampf in the 1990s, resulting in an ideological divide on how the Hungarian nation state should be represented by architecture and how its capital, Budapest, should be developed. Symbolically enough, the so called Tulip-dispute marked the last year of the socialist regime’s ambitious 15-year-long housing program that targeted the construction of one million dwellings between 1960 and 1975.14 The dispute was occasioned by a newly erected mass housing complex in the provincial town of Paks. Young architects of the Pécsiterv state planning bureau engaged in vernacular traditions and applied ornaments in the form of abstracted tulips in an attempt to humanize the façades of the pre-fabricated blocks there. In the debate, mainstream architects accused the ‘Pécs Group’ of anti-modernism, while the latter responded by accusing their critics of being promoters of socialist nihilism. The watchful eyes of party-state censorship didn’t allow for the unfolding of a rational debate on the housing problem which, being a politically sensitive topic, was not seen as desirable by the powerholders anyway. The Paks experiment was stopped by an administrative decision, and the ‘Pécs Group’ ended up getting dissolved. However, their marginalization, rather than closing the

Chapter 1  Budapest’s Post-Socialist ­Urbanization. From Facts to Model and Back

country – to a victory for the liberals, a center-left party12. The right-wing legislative majority responded to the liberal victory by passing a law on the capital delegating an unusually large amount of municipal power to the district level. The law and the districts’ ‘my house is my castle’ attitude made strategic planning impossible; city-level governance was neutered, and there was a lack of clarity about the division of competences between the city and the districts.

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book on populism in Hungarian architecture, led to its strengthening and to the hardening of its traditionalist, anti-modernist position. The debate and its aftermath contributed to the renewal and intensification of the old polarization that marked the architectural as well as the wider intellectual community after 1989. It proved to become the first step towards an all-out Kulturkampf that divided architects into two warring camps in post-socialist Hungary, engaged in an ideological battle over how the Hungarian nation state should be represented by architecture.15 In the following years, this bitter division played its part – along with other factors such as financial shortages – in the frustrating or recommissioning of many large-scale projects of cultural and symbolic significance; this phenomenon will be illustrated here by the examples of the new National Theatre and the redevelopment of the Castle Area in Budapest. The National Theater project was launched by the Socialist-liberal coalition in government between 1994 and 1998; the constructions started under a competition-winning modernist design by architect Ferenc Bán. Once the Christian-nationalist right returned to power in 1998, the construction works were stopped and the government hastened to commission a historicizing design reflecting its worldview.16 As to the Castle area, a competition was announced for a project to rebuild the former headquarters of the military high command, ruined during the Second World War. The winning project applied a contemporary architectural vocabulary, and it aimed at converting the building into a cultural and touristic center.17 Again, the works were cancelled and replaced by plans to refurbish not just the military headquarters but other public buildings in the area too – in their original condition – and to relocate Hungary’s main government offices to the Castle area. The ideological division spilled over in both cases into a political stalemate, with unilateral decisions eliminating projects initiated by the other side. The lack of a proper vision on how the city should develop and the frustration of large-scale public projects of cultural and symbolic significance, in their turn, promoted the big investor projects, as local politicians were left with these to demonstrate to their voters the progress of the city and of their district.

The Abstract Model as a Whole To recapitulate: rather than starting out with hasty generalizations, this book takes the plain facts of a unique story as its starting point. Based on these facts and proceeding by abstraction, it leads to the construction of an interpretive and explanatory model which aims at pointing out that the seemingly disordered facts admit a systematic explanation. The model consists of three distinct building blocks: the three narratives I have described above. So far, I have presented those narratives separately. The next question is whether they really are separate; whether the impact each makes is isolated from the other and explains separate groups of phenomena. My tentative answer is no: the three narratives point towards convergent outcomes. Regardless of whether we begin with socialism’s monolithic power geometry, the tensions of the socialist urbanization or the ideological divisions suppressed by the communist regime, the narrative leads to the very same combination of effects in the post-socialist production of space. Rather than extinguishing each other’s effects, the three narratives describe mutually 14

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supportive stories and constitute a systemic interpretation of the changes characteristic of the relevant period under investigation. Their interrelations also become visible in the cross-effects between some of their elements. For example: the rapid housing privatization was not only a response to legacies of socialist urbanization and a result of the transformation crisis; as indicated by the socialist urban legacies narrative, it also proved to be a form of decentralization of the control over economic resources – in this particular case, apartments. The abstract model allows for the establishment of macro-level relations which, then, will be illustrated through micro-level case studies. Most significant amongst these is a detailed study of the ‘Corvin-Quarter’ project. This development was initiated by the local government of the 8th district of Budapest. The idea was to integrate a private investor project into their district renewal program. The project is interesting for the following reason: There are three main models for the distortions in the way public authorities interact with the market. According to the first model, excessive public interventionism undermines market competition. This was not a main problem in the post-transition period. According to the second, the authorities engage in a cooperative relationship with private companies, and those relationships get infiltrated by corruption. The third model comprises the public hand’s laissez-faire attitude towards private projects. The case under investigation reveals the possibility of a fourth model, seemingly specific to societies under major transformation. Even if the agreements between public and private actors are transparent, insufficient resources, lack of clarity in the division of competences, and political standoffs on the public side can result in the private actor’s disproportional dominance, leading to unintended consequences or to the failure of public interest within the project. The findings of this in-depth study feed back into the abstract model, giving it a more specific shape, and into the initial pool of micro-level symptoms, organizing its elements (Fig. 4.).

Chapter 1  Budapest’s Post-Socialist ­Urbanization. From Facts to Model and Back

Fig. 3. The Socialist Urban Legacy, Decentralization, and Kulturkampf Narratives. The book suggests that they d ­ escribe mutually supportive stories and, together, constitute a systemic interpretation of Budapest’s post-socialist urbanization.

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specification

specified abstraction exemplification

abstraction abstract model systemic organization and establishment of causal nexus empirical data and everyday experience seemingly disjointed and unsystematic micro-level symptoms and narratives

detailed case study micro-level exemplification of the narrative

organized chaos micro-level symptoms and narratives

organization

Fig. 4. The book’s modus operandi: mutual feedback between micro-level symptoms, the macro-level abstract model, and the detailed case study.

The Model’s Dual Character: Complementarity of the Verbal Narrative and the Systemic Scheme The three building blocks constitutive of the model are abstract enough to be separable from a reference to particular places and actors. Their abstract character allows for the model to be tested against other specific cases in the region and elsewhere. After all, the model’s three main building blocks – the Legacies of Socialist Urbanization, the Decentralization, and Kulturkampf Narratives – are relevant in all formerly socialist states of Central Eastern Europe. At the same time, abstract as this model should be, it is a verbal, qualitative, rather than quantitative model, and it aims at making the recent history of Budapest interpretable. The model I am trying to build thus has a dual character. On the one hand, it is of a relatively high level of abstraction, and it is aiming at systematic explanation. On the other hand, it consists of narratives which are of an interpretive nature. There are two reasons why I am using the term narrative. Firstly, the explanatory relationships 16

unfold in the form of a story; that is, they are grafted onto a historical process. Secondly, the explanatory pattern I develop cannot be found as objectively given: it has to be constructed and applied to the material collected in the form of an interpretive venture. In his Tropics of Discourse,18 Hayden White discusses differences between ‘historical theory’ and ‘speculative philosophy of history’ – also known as ‘metahistory’, a term coined by the Canadian literary theorist Northrop Frye. The ‘proper historian’ seeks to explain what happened in the past by providing a precise and accurate reconstruction of the events. Thus, in historical research, the reconstruction of objective facts clearly precedes interpretation. In the ‘metahistorian’s’ work, by contrast, explanatory and interpretative aspects of the narrative run together. Such a work

the historical process.’19 Thus, interpretative, narrative and systematic methods can be jointly employed by historical research. Their combination helps to describe a specific history and to understand the causes behind its symptoms at the same time. In this particular case, the complex urban phenomena I am after can be described through story-telling, whereas the explanation of the macro-processes’ regularity demands more systematic, analytic methods.20 Based on the above, this book has the following major goals and motivations: It aims to point out that the seemingly disordered and disjointed phenomena admit of a systematic explanation. It aims, furthermore, to develop a systematic model to provide a theoretical explanation of the causal nexus between some of Budapest’s historical background conditions and the syndrome of its recent urbanization. A separate chapter will offer an in-depth case study of the ‘Corvin-Quarter’ development, where the local government engaged in the integration of a private investor-­ cluster into their district renewal program, with the aim of providing an empirical story to make the macro-level abstract nexus vivid. The ‘Corvin-Quarter’ case study also serves the goal of testing different models for distortions in the way public authorities interact with the market. It will provide a new, so far unexplored model of the way the public-private relationship may suffer distortions. The model to be explored here insists that even if the agreements between public and private actors are transparent, and even if the public authorities do not take a laissez-faire attitude towards urban development, insufficient resources, lack of clarity in the division of competence, and political standoffs on the public side can result in a failure to promote public interests within the project. This book also aspires to provide a basis for future comparative studies via the establishment of a model abstract enough to be separable from a reference to particular loci and actors. It can thus be tested against other specific cases in the region in order to reveal variations within the general framework of post-socialist transformation. This is made possible by the already-mentioned fact: that the model’s three main building blocks – the Legacies of Socialist Urbanization, the Decentralization, and the Kulturkampf Narratives – are relevant in all formerly socialist states of Central Eastern Europe, albeit appear in different variations.

Chapter 1  Budapest’s Post-Socialist ­Urbanization. From Facts to Model and Back

offers both a representation of what happened and an explanation of why it happened as it did. White follows by stating that, in his point of view, ‘there can be no proper history without the presupposition of a full-blown metahistory by which to justify those interpretative strategies necessary for the representation of a given segment of

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1  E. g., Gregory Andrusz, Michael Harloe and Iván Szelényi, eds., Cities After Socialism. Urban and Regional Change and Conflict in Post-Socialist Societies (Oxford: Blackwell Publishers Inc., 1996); György Enyedi, Social Change and Urban Restructuring in Central Europe (Budapest: Akadémiai Kiadó, 1998); F. E. Ian Hamilton, Kaliopa Dimitrovska Andrews, Nataša Pichler-Milanović, eds., Transformation Of Cities In Central And Eastern Europe. Towards Globalization (Tokyo: United Nations University Press, 2005); Sasha Tsenkova, Zorica Nedović-Budić, eds., The Urban Mosaic of Post-Socialist Europe. Space, Institutions and Policy (Heidelberg: Physica-Verlag, 2006); Kiril Stanilov, ed., The Post-Socialist City. Urban Form and Space Transformations in Central and Eastern Europe After Socialism (Dordrecht: Springer Verlag, 2007 ).  2  To be elaborated in Chapter 2 of this book.  3  György Konrád and Iván Szelényi, Az új lakótelepek szociológiai problémái [Sociological Problems of New Mass Housing Estates] (Budapest: Akadémiai Kiadó, 1969).  4  Iván Szelényi, Urban Inequalities under State Socialism (Oxford: Oxford University Press, 1983), 9 –10.  5  Housing Act LXXVIII/1993 (July 30); on the introduction of the real estate market see: Otto Steiger, Property Economics. Property Rights, Creditor’s Money and the Foundations of the Economy (Marburg: Metropolis, 2008); David Stark and László Bruszt, Postsocialist Pathways. Transforming Politics and Property in East Central Europe (Cambridge: Cambridge University Press, 1998).  6  According to census data, Budapest had 2,016,681 inhabitants in 1990 and 1,759,209 in 2001. ‘Population based on settlement type’, Központi Statisztikai Hivatal, accessed November  20, 2015, http://www.ksh. hu/pls/ksh/docs/hun/xstadat/xstadat_eves/i_wdsd001a. html  7  Szelényi, Urban Inequalities under State Socialism, 148 .  8  Bohdan Jałowiecki, Społeczne wytwarzanie przestrzeni [Social Production of Space] (Warsaw: Wyd. Książka i Wiedza, 1988), 195.  9  János Kornai, Economics of Shortage (Amsterdam, New York, Oxford: North-Holland Publishing Company, 1980).  10  Elaborated in Chapter 3 of the book.  11  The Hungarian Democratic Forum (MDF) formed a coalition government with the Christian Democratic People’s Party (KDNP) and the Independent Smallholders’ Party (FKGP). See all parliamentary election

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results between 1990 and 2006: accessed December  10, 2015 , http://nol.hu/archivum/egyeni_valasztokeruletek_ eredmenyei_1990 -tol_2006 -ig-544141  12  The Alliance of Free Democrats (SZDSZ) won 18 of 23 districts in Budapest and also provided the first mayor of the city, Gábor Demszky, who was in office between 1990 –2010. See all municipal election results between 1990 and 2006: accessed December 10, 2015 , http://www.visionpolitics.hu/index.php?page=oldal&cikk= 49  13 Elaborated in Chapter 4 of this book.  14  E. g., Virág Molnár, Building the State: Architecture, Politics, and State Formation in Postwar Central Europe (New York: Routledge, 2013); Máté Major, Judit Osskó, eds., Új építészet és társadalom 1945 –1978 [New Architecture and Society 1945 –1978] (Budapest: Corvina Kiadó, 1981).  15  This was analogical to the outburst of a ‘war of ideologies’ between the Christian-nationalist and leftist political blocks. The philosopher János Kis coined the term 'hundred years' war', in his attempt to describe the relationship between the political right and left in 20 th century Hungary. Kis provides this historical analysis as one of the factors that explain the failure of the post-socialist democratic republic to stabilize itself. According to him, two anachronisms, a political right yearning for the semi-feudal and authoritarian regime of the inter-war period and a left unable to cut loose from the socialist Kádár era marked by a relatively soft version of a totalitarian dictatorship, contested and disclaimed one another in the decades following the end of socialism. János Kis, Az összetorlódott idő (Bratislava: Kalligram, 2013).  16 On the National Theatre saga see: Mihály Varga, ‘Kudarc-sztori’, Építészfórum, July 13, 2000, accessed September 5, 2015, http://epiteszforum. hu/kudarc-sztori  17  Competition-winning project: Péter Kis, Plant Kft., 2004 .  18  Hayden White, Tropics of Discourse. Essays in Cultural Criticism (Baltimore and London: The John Hopkins University Press, 1978).  19 Ibid., 52.  20  Pure storytelling would not provide plausible systematic explanations and would not help future comparative work as it would not be abstract enough; whereas plainly systematic and statistical methods would ignore the individual micro-narratives that constitute the starting point of the research.

Chapter 2  The Socialist Urban Legacy ­Narrative. Tensions of Socialist ­Urbanization

Chapter 2  The Socialist Urban Legacy ­Narrative Tensions of Socialist ­Urbanization

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The post-socialist model of urbanization, especially the transformation in the early years following the respective regime changes, was highly determined by socialism’s legacies. Both the built environment in its physicality and the culture and practices of the production of space were inherited from socialist urbanization. For this reason, the Hungarian sociologist János Ladányi claims in a recent article21 that the impact of the new capitalist turn on the pace and character of East European urbanization can only be discussed once it has been decided whether a peculiar model of socialist urbanization existed and, accordingly, whether there is such a thing as a spatial organization exclusive to socialist societies. This issue had already been intensely discussed in the 1970s, with three competing positions having emerged. On the one hand, many neo-Marxist thinkers argued that differences in the modes of production are responsible for the significant differences between the patterns of urbanization in socialist and capitalist societies. According to a rival neo-Weberian conception, the levels of economic and societal development are the prime determinants of urbanization’s pace and character. What is decisive for the specific character of socialist urbanization, neo-Weberians argue, is not the nature of the socialist mode of production but rather the belated arrival of the modern phase of urbanization. Thinkers on the New Left proposed a third account which did not fit either of the two interpretations, and which drew significant parallels between state socialist and capitalist urbanization. In this chapter I will provide an introduction to this debate with a special focus on the relevance of the phenomena in question to the shape of socialist and post-­ socialist Budapest. Parallel to this, I will also point to five substantial tensions of socialist urbanization, which later also had a decisive effect on the character of post-socialist transformation.

Mode of Production and Process of ­Urbanization: A Marxist Approach ‘[C]ities in Eastern Europe are “socialist” not in the sense that they are [...] better or worse than comparable cities in capitalist countries. They are socialist in that they are different.’22 argued Iván Szelényi in 1983, suggesting that socialism was responsible for the particular structure of East European cities. A good decade later, David M. Smith referred to Szelényi’s statement in his essay on the socialist city and claimed that the question was not simply whether the socialist model of urbanization existed; it rather asked to what extent did rigidities of these preexisting forms impede the process of post-socialist change.23 In his review of physical organization and socio-economic differentiation in the cities of Eastern Europe, Smith strongly relies on a seminal work by Richard Antony French and Ian Hamilton, The Socialist City.24 The authors take a clear standpoint in the debate by stating that the command economy – where the ultimate decisions concerning development priorities, capital investment, and economic as well as spatial patterns of change are taken within a single, unified hierarchy – results in an urban form which is a distinct spatial phenomenon.25 Primary responsibility for the 20

particular feature of this phenomenon lies, according to French and Hamilton, with the immensely powerful socialist state’s capacity to determine the pace and form of urban development and with collective ownership of land and real estate, resulting in the absence of a land-value surface as it is understood in the West. As a consequence, patterns of urban land use were conspicuously different in Eastern Europe from the way they look in the West, and demonstrated greater uniformities of spatial distribution. For example, industry was more evenly spread in socialist cities and social segregation by sectors was greatly diminished. Furthermore, the socialist state aimed at solving

a city-by-city basis.26 David Harvey27 and Manuel Castells28 have also claimed that patterns of urbanization are primarily determined by the modes of production and, consequently, are highly different in socialist and capitalist societies. Castells, influenced by Louis Althusser, coined the hypothesis that ‘the relation between society and space (for that is what urbanization is) is a function of the specific organization of modes of production that coexist historically [...] in a concrete social formation, and of the internal structures of these modes of production.’29 Castells blamed the contradictions of classbased societies for the urban problems of the West, such as excessive urban growth and residential segregation. Furthermore, he suggested that socialist urban development will provide solutions to these problems. Pearse Murray and Iván Szelényi, while putting forward empirical evidence supporting the neo-Marxist position of Castells and others, criticize socialism for its impact on urbanization.30 In their interpretation, while socialism in theory is definitely urbanist, its practices appear to be rather anti-urbanist. They base their statement on the observation that in socialist states the ‘rate of urban growth, and especially the rate of [...] metropolitan growth, appears to be slower than the rates one can observe under similar circumstances in market capitalist economies.’31 Szelényi and György Konrád conducted empirical research in Hungary in the 1960s and found that with the society’s socialist transformation, the growth of the urban population appeared to have fallen behind the expansion of the industrial population.32 They claimed that the proletarianization of the formerly agricultural workforce was not followed by a comparably fast migration of this population from rural areas to urbanized centers. On the contrary, administrative measures were often put in place to restrict metropolitan growth by preventing would-be migrants from settling in the major cities. In the case of Budapest this resulted in the exponential growth of villages in poorer areas of the city’s agglomeration (Figs. 5 and 6). It was relatively easy to get a new job in the growing socialist industry but almost impossible to become a legal resident of the capital. György Berkovits described this phenomenon and the resulting aggravating life circumstances of the worker-turned-farmers in his 1976 local history publication of Budapest’s margins based on his empirical research.33 The new proletariat had to settle under these miserable living conditions beyond the fringes – they were forced to commute long hours every workday and were deprived of the advantages that came with being an inhabitant of a metropolitan center.

Chapter 2  The Socialist Urban Legacy ­Narrative. Tensions of Socialist ­Urbanization

issues of the city within the framework of the Marxist doctrine – as opposed to capitalist states whose intervention and control is only aimed at correcting inadequacies within the framework imposed by private land and real estate ownership and market competition. In a 1996 essay György Enyedi added that whereas socialist states cultivated comprehensive strategies for the development of the national settlement network, capitalist urbanization is led by local decision-making and physical planning on

21

Figs. 5. and 6. 'On the Margins of a Metropolis'. István Lugossy’s photos of Budapest’s agglomeration from 1975.

Ladányi, on his part, also comes to the conclusion that a peculiar state-socialist model of urbanization and spatial organization had existed and was the main explanatory factor behind the differences between Eastern and Western cities.34 He supports this statement by summing up the characteristics of East European urbanization which, according to him, are consequences of the socialist mode of production.35

Levels of Economic and Social Development: A Weberian Approach As we have seen, it was common sense among neo-Marxist urban sociologists that there are significant differences in the patterns of urbanization between societies of different – socialist versus capitalist – modes of production. Ray Pahl36 and Herbert Gans37 have challenged this view. In Pahl’s opinion, the character of urbanization has more to do with the level of production than with the mode of production. Pahl also noted the persistence of certain social problems and inequalities across different social systems. According to him, despite the substantial differences in socioeconomic systems one can observe overwhelming similarities in their urban problems, and therefore one has to look beyond the mere nature of the two regimes – so Pahl’s argument goes. He focuses on the similarities in terms of inequalities between 22

socialist and capitalist societies. Pointing out that the socialist city is also burdened by social inequalities, he reminds his Marxist colleagues that without a convincing

the differences between the two types of urbanization more challenging than their analogies. Furthermore, instead of comparing degrees of inequality, Szelényi opted for studying the quality of the new inequalities.40 As noted above, in his first empirical study conducted with György Konrád,41 the two researchers found to their surprise that – despite the official propaganda on the proletariat’s social rise to the position of the ruling class – amongst the residents of the new mass housing estates the bulk of the working class was nowhere to be seen. It was rather the middle class, such as professionals, intellectuals and bureaucrats, who inhabited these developments. Konrád and Szelényi’s research42 proved that new public housing was allocated systematically to higher income groups.43 According to Szelényi, this suggested two conclusions. Firstly, housing inequalities were created under socialist distribution of habitat; and secondly, they were created via administrative allocation, a distinctively socialist mechanism which was claimed to make the housing allocation fair as opposed to the unfair market methods of capitalism. The existence of urban social inequality in socialism was seen by Szelényi as evidence that mechanisms of urban economy under different modes of production can result in similar urban phenomena. Let’s call this the first substantial tension of socialist urbanization: The establishment of a classless, egalitarian society was an important promise of Marxist doctrine. Replacing the market allocation of housing with an administrative procedure was seen as an important instrument in achieving this goal. Instead, segregation based on access to redistributive systems emerged, leaving a significant part of the new proletariat under miserable living conditions beyond the industrial metropolises’ fringes. Like Pahl and Szelényi, the geographer and economist György Enyedi interpreted the similarities between capitalist and socialist cities as evidence supporting the hypothesis that the mode of production has limited relevance to the resulting model of urbanization. He showed that ‘behind the facade of the differences and similarities of capitalist and socialist urbanization there was a common pattern of causation: the process of modern urbanization. This common process, according to Enyedi, was more significant

Chapter 2  The Socialist Urban Legacy ­Narrative. Tensions of Socialist ­Urbanization

theory on what creates inequalities in socialist urbanization they will not be able to explain the West’s urban problems as products of the capitalist mode of production. In order to demonstrate that problems of inequality are not only similar in East and West but are also created by forces that operate under both socialism and capitalism, Pahl quoted research evidence from Eastern Europe, including the empirical results of Konrád and Szelényi’s research made in the 1960s on Hungary’s socialist urbanization. In the 1980s Szelényi, already residing abroad, took sides with Pahl: ‘I cannot claim that the “urban problems” of the West issue from the contradictions of the capitalist mode of production, and maintain at the same time that “urban problems” under socialism do not express structural contradictions but only “historical conjunctures”.’38 Szelényi agreed with Pahl that Eastern and Western Europe have shared some common contradictions of urban development, and that many of these were results of technological factors neutral towards the modes of production.39 On the other hand, he still found

23

than the varying social structures that carried it.’44 Enyedi mentioned the following fundamental features of the first stage of modern urbanization that were reproduced later by Eastern European countries during their socialist period of development: – rural-to-urban migration and the urban concentration of the population; – the spatial separation of workplaces and residences; – suburban development; – growing importance of tertiary employment, which changes territorial patterns.45 Enyedi argued that modern urbanization has a cyclic character with alternating phases of concentration and deconcentration. His fundamental thesis was that Hungary’s economy had been characterized by a territorial deconcentration of productive forces in the so-called extensive phase of its socialist development, complemented by processes of deconcentration to its settlement network. He claims that settlement legislation, as well as other sectoral regulations with a strong impact on urban development, have maintained a concentration effect. Their asynchronic relation to spontaneous development hampered the evolution of an equilibrium path.46 To explain the meta-context of this observation, Enyedi argued that the urban development of the past two centuries can be subdivided into four phases. Their courses are different depending on the country observed and on the economic era in which the cycle’s different phases commenced, and on the historically established settlement networks of the respective times. The first phase, as described by Enyedi, is one of an urban explosion: a period of population concentration linked to the industrial revolution and to the take-off of the modern economy. He points out that modern urbanization in Hungary started with a substantial delay. Furthermore, he argues, the urban explosion is divided into two periods, with decades of stagnation between the two.47 The second phase of the urbanization cycle is characterized by relative deconcentration. Although urban growth continues, its pace decelerates. Whereas agglomerations expand, old urban centers often experience a decrease of their population at this stage. In the West, this process took place between the turn of the 19th and 20th centuries and the 1950s– 60s. Hungary had only entered this second phase of urbanization in the 1970s, which was also the era of intensive economic development there.48 The third phase features full-blown deconcentration and desurbanization and began in the most developed capitalist states in the 1960s. Besides the shrinking of urban centers, the expansion of their immediate agglomerations also came to a halt. As a result, the proportion of rural population started rising again.49 Hungary was yet to enter this phase of desurbanization when Enyedi published his study. Soon after, however, a decrease in Budapest’s population commenced which continued at an accelerated pace after the regime change of 1989.50 Finally, the fourth phase of the cycle is another stage of concentration. Post-Fordist reurbanization driven by the predominance of service industries and the renewal of urban centers characterize this phase. One could argue that Budapest’s most recent developments are in line with these trends.51 Enyedi demonstrated that the transformation of Hungary’s settlement structure follows the global urbanization cycle but with a significant phase delay. This is in line with the thesis that the profile of Eastern Europe’s urban development is determined 24

by its belatedness, and therefore its different phases of urbanization were overdue and didn’t radically transform the settlement network as a whole. All in all, Enyedi, Pahl, and Szelényi agree that, besides the differences, there are also remarkable similarities between the urbanizations of Eastern and Western Europe. Additionally, some of the shared characteristics appear distorted in time, as the levels of economic development and thus the phases of urbanization encountered by the countries in question vary. Let’s call the ‘antiurbanism’ of the socialist transformation, as described by Enyedi and Szelényi, the second tension on socialist urbanization: The shortcomings of infrastructure, housing and services, caused by forced industrialization and by the subordinating of all additional investments in space, became a major obstacle for urbanization; whereas rapid urban development was a core promise of the regimes. Consequently, the urban population growth could not follow the expanding number of newly created jobs, and furthermore, urban functions not directly related to industrial production – such as commerce and tourism – remained underfunded and underdeveloped.

In his account on state-organized territorial distribution processes and globalization, Neil Brenner quotes Henri Lefebvre on the state’s increasing role in the territorial distribution of capital since the late nineteenth century.52 According to Lefebvre, this process has signaled the emergence of a new, globally articulated state form, the ‘state mode of production’ (le mode de production étatique).53 Brenner adds that this form of territorial distribution of capital is oriented simultaneously towards an intensification of specific national patterns of capitalist industrialization and an institutional regulation of the new forms of uneven geographical development induced through this first, state-centric stage of globalization. In a 1976 interview to the journal Autogestion et socialisme54, Lefebvre formulated his fundamental thesis on the existence of what he called the state mode of production, which – according to him – is neither capitalist nor socialist in terms of Marx’s and Engels’ definition. He claimed that there are two general types of systems with a state mode of production: state capitalism and state socialism. Although the two systems are quite different, they both fall under the same concept of a system where the economy is managed, directed, and oriented by the state. According to Lefebvre, these are economies ‘entirely dependent on strategic variables – strategic in the broad sense of the term, in the military sense, and also in the economic sense – that are decided at the level of the State.’55 The Polish architecture historian Łukasz Stanek adds that by applying the same concept to both capitalist as well as socialist systems, Lefebvre implicitly claimed that the concept of ‘mode of production’ is not helpful in distinguishing between the capitalist and socialist production of space.56 According to Stanek, in The Production of Space, Lefebvre raised the question of whether socialism has produced a space of its own. Stanek quotes him as asking: ‘What do we find when we apply the yardstick of space – or, more precisely, the yardstick of spatial practice – to societies with a socialist mode of production?’57

Chapter 2  The Socialist Urban Legacy ­Narrative. Tensions of Socialist ­Urbanization

The ‘State Mode of Production’

25

The Socialist City as the Result of Belated Modern Urbanization Under the Centralized Command Economy Most theorists working on comparative urban development agree that there were substantial differences between the cities of Eastern and Western Europe in the decades preceding the regime change in the East. They disagree, however, on the extent to which socialism as a mode of production was responsible for these differences. It is not easy to pass judgment on the controversy; perhaps its very aim was not that of choosing between the two conceptions; they are not necessarily mutually exclusive, after all. Enyedi sums up his position by stating that he does not sign up without reservations to either the neo-Marxist or the neo-Weberian conception; he suggests that the differences between cities in the East and West were neither of a purely systemic character nor have they been mere results of delayed development. In other words: the socialist urbanization of Eastern Europe was not a completely new model of urbanization, yet it exhibited special characteristics. As Enyedi puts it, ‘[t]hese had two sources: first, delayed economic and urban modernization and, second, the socialist political system.’58 With a closer look, we find that even works which seemingly establish a clear preference for one side or the other often display uncertainties or inconsistencies. For example, while Ladányi sides with the neo-Marxists in the conclusion of his work,59 many of his observations find analogies in capitalist market economies, while others easily lend themselves to interpretations as evidence that the levels of economic and social development are the main determinants of urban development. He mentions, for example, the high ratio of publicly owned housing in socialist cities. One could, however, take the case of the Netherlands, a country known for boasting a large stock of affordable social rented housing in its cities. Regulated social housing there, managed by housing associations, accounts for around three-quarters of the residential building stock.60 Ladányi also puts forward the fact that in socialist Eastern Europe the majority of subsidized apartments were built in prefabricated mass housing estates. In this respect, one could set the postwar new towns of the West against socialist mass housing, as the two concepts share many of their core qualities and goals. Another exclusive urban quality in the East, according to Ladányi, is that large masses of farmers-turned-workers have kept their rural hinterland over the generations, and have thus maintained a dual status. He describes this as the ‘pre-worker and post-farmer’ condition. This phenomenon is in line with the delayed urbanization in socialist Hungary, goes Ladányi’s argument, that had materialized in infrastructural and habitat investments lagging behind investments in production. Consequently, far more jobs were established in the urban industry than homes in the city. Knowing, however, that this imbalance later greatly decreased with the slowing pace of forced industrialization and the introduction of prefabricated mass housing 61, this property of the dynamics of the East European urban landscape can also be interpreted as evidence for the claim that the socialist urbanization was shaped by its belatedness.

26

hand, the postwar decades had seen the growth of planning, state intervention and development control in Western societies. Murray and Szelényi offer two interpretations of the socialist transition’s ’antiurbanism’, their equivalent of Enyedi’s ’disurbanization phase’. From an evolutionist perspective, a developed socialist society can be achieved by a gradual dissolution of the features of capitalist urbanization, parallel to a step-by-step evolution of a socialist-type urbanism. This first reading suggests that the socialist societies of Eastern Europe were in a belated phase of their urbanization, and that this was the major cause for their cities being distinct from Western ones. It also implies that socialism’s antiurbanism gradually declines with the establishment of the new regime. On the other hand, they also suggest that the deepening of the division of labor between industry and agriculture, between the city and the countryside, is a capitalist tendency or, in other words, the easing of antiurbanism is an indication of the strengthening of capitalist forces. This second reading implies that after an initial phase of a socialist strategy of industrialization and economic development, the processes begin to converge on a capitalist mode of production, which ultimately also transforms their model of urbanization. We can conclude that both the socialist mode of production and the belatedness of the urbanization process have had a substantial impact on Eastern Europe’s postwar urban development. First of all, in the party-state system all collective decisions, whether political or economic, were taken within a single, unified hierarchy. As a consequence, the state had the power to determine the pace and form of urban development to a far greater extent than any Western government. Consequently, a certain degree of uniformity characterized cities throughout the Eastern Block. This uniformity was most markedly present in the new towns. These were on the one hand urban structures closest to a true realization of socialist ideals, and on the other hand comprised standardized modes of construction. As French and Hamilton have put it: ‘if one were transported into any residential area built since the Second World War in the socialist countries, it would be easier at first glance to tell when it was constructed than to determine in which country it was.’62 Secondly, with most land ownership concentrated in state or co-operative hands, land value as it is defined by the capitalist market did not exist. This had the consequence of planners using other, mostly functional criteria of evaluating land, and thus coming to patterns of urban land use conspicuously different from those in the West. On the other hand, the postwar transformation of the settlement network in Eastern Europe seems to have followed global phases of urbanization, albeit with a substantial delay.

Chapter 2  The Socialist Urban Legacy ­Narrative. Tensions of Socialist ­Urbanization

French and Hamilton, while predicting that fundamental differences between socialist and capitalist cities will remain, pointed out facts of visible convergence between the two types of urbanization. Furthermore, they argued that the assimilation is mutual. On the one hand, the increasing sensitivity to cost-effectiveness in socialist Eastern Europe, apparent from the 1960s on, has made certain planning decisions more and more similar to those taken in a capitalist enterprise. On the other

27

The Socialist Economy, Everyday Life, and Urbanization Łukasz Stanek introduces the Polish geographer Bohdan Jałowiecki’s book, S ­ połeczne wytwarzanie przestrzeni [The Social Production of Space] as a work that is rooted in 1970s French Marxist urban sociology and develops Lefebvre’s theses into a critique of the production of space under socialism.63 Stanek draws parallels between ­Jałowiecki’s view, according to which the shift from one mode of production to another does not lead to an abandonment of old definitions of space but rather to their combination with other, more recent definitions; and Lefebvre’s theory of space produced under one mode of production never being fully surpassed with the change of modes of production. For Stanek, the most innovative part of Jałowiecki’s book is the investigation of the ‘political space’. As in Hungary, the political and economic conditions of urbanization in socialist Poland were determined by forced urbanization. According to ­Jałowiecki, space in this period should be described as ‘political space’, since ‘the fundamental factors determining the social production of space [were] political decisions.’64 The planning of economic, social and spatial development was carried out under socialism by political authorities and state agencies. Jałowiecki pointed out, however, that the planning decisions were often made under pressure by competing state enterprises and protagonists of the industry’s different branches. In this ‘competition without a competitive market’, socialist state enterprises aimed at an accumulation of the means of production, as opposed to capitalist firms that seek profit. By maximizing the assets made available to them, including space, they could secure political influence and constant growth – at least in terms of the land occupied. Similarily to French’s and Hamilton’s observation that, due to the priority given to industrial expansion and the absence of land value in the sense it is understood in the West, industry was extensively spread in socialist cities, Jałowiecki argued that the elimination of land rent and the competition of enterprises for space have led to the occupation of urban space by industrial enterprises and their auxiliaries, such as offices, housing and social ­facilities. I will call the resulting archipelago of extensive industrial land use in central areas of cities the third remarkable tension of socialist urbanization. Centralized spatial planning was seen as entailing the promise of rational land use, but it failed to fulfill that promise.

28

0

5 km

Fig. 7. The hodge-podge of industrially used land in socialist Budapest.

29

Fig. 8. Former industrial sites along the Danube, 1993 (see Fig. 26. for their later development).

Fig. 9. Factory of the Hungarian Optical Works (MOM) with the Buda Castle in the background, 1976.

30

In order to better understand Jałowiecki’s thesis on the production of space, one has to come to understand the fundamental characteristics of the socialist economy’s functioning. Studies on the socialist economy – and on its projection onto everyday life – pointed out that shortages of supply were its main structural problem, as opposed

an entry into why communist party rule collapsed much faster than anyone would have expected.68 She starts by introducing the constraints of production; mainly the shortage of supply as the system’s main structural problem. In the first place, central planners would sketch up plans of the quantities to be produced, and of the investments and raw materials they thought were needed to fulfill the targets. Managers of firms learned early on, however, that the output targets were likely to increase annually, whereas raw materials and other inputs tended to arrive late or in reduced amounts. They responded by engaging in a process of plan-bargaining with the central authorities; i.e., asking for more resources in exchange for meeting the targets. As a result, more resources have been allocated to them than meeting the targets actually required. ‘A result of all the padding of budgets and hoarding of materials was widespread shortages’69, and the hoarded materials were either used in later production cycles or they were bartered between firms that had both surpluses and shortages in particular resources. Verdery’s argumentation is strongly influenced by the work of János Kornai, who coined the term ‘economy of shortage’70 in order to characterize socialist economies. Describing the institutional framework of investments, he starts out by identifying that investment hunger, driven by a constant expansion drive, is a permanent feature of the socialist economy. Kornai argues that leaders identify with their jobs and the units they are responsible for, which – therefore – have to grow, as growth is the equivalent of success. Machinery could always be upgraded, production capacity expanded or the enterprise could be made more efficient –all this requiring investment. Kornai mentions two factors that contribute to this mechanism. First, there are shortages which can be felt both within (one division cannot sufficiently supply another) and outside of the enterprise (potential buyers queuing for the firm’s product). Second, professional envy also contributes to the expansion drive: one can always find units compared to which one’s own seem outdated and poor. Kornai also points out that under the systemic conditions that generate shortage, demand for investment is not limited by fear of failure. Firstly, shortage makes almost any product marketable. Secondly, as enterprises are state-owned and, moreover, they are often monopoly providers of their products, possible financial losses are always compensated for in the form of state subsidies, price adjustments or by other means.

Chapter 2  The Socialist Urban Legacy ­Narrative. Tensions of Socialist ­Urbanization

to the capitalist economy dominated by the problem of demand. The anthropologist Katherine Verdery argues that, while the socialist societies in Eastern Europe and the Soviet Union significantly differed from one another in many respects, a single analytical model can be applied to them, and this model helps to better understand what socialism really was.65 Western observers have seen communism, she reminds us, as a group of all-powerful autocratic regimes. According to her, however, the communist states were comparatively weak – especially towards the 1970s and ’80s. The socialist regimes were not, or only partly, seen as legitimate and were, therefore, ‘constantly undermined by internal resistance and hidden forms of sabotage.’66 Drawing upon Michael Burawoy’s discussion of production’s micropolitics,67 Verdery offers

31

Kornai paraphrases this condition with the term ‘soft budget constraints’.71 The shortages, the permanent expansion drive and the practical non-existence of financial failure lead to investment tensions. Kornai presents three layers of such tensions: 1. those between claimed and awarded quota; 2. those due to tight investment plans; and 3. those between initial demand and actually available real resources. His conclusion is that the socialist command economy is liable to constant investment tensions, albeit with a variable degree depending on the actual institutional conditions and central policies. Another aspect of state socialism again discussed by Verdery is its system of paternalistic redistribution. She summarizes this regime as the Party’s efforts to secure legitimacy and popular support by taking care of people’s needs through centralizing the social product and redistributing it in the form of jobs, affordable goods, free health care and education, subsidized housing, and so on. ‘Herein lay the Party’s paternalism: it acted like a father who gives handouts to the children as he sees fit’72 – goes Verdery’s argument. According to her, the socialist mode of operation sacrificed demand and consumption in favor of production and the control of supply. This can be explained by the constant need to hoard the means of production in order to enhance redistributive power, which resulted in heavy industry having been the regime’s dominant preference at the expense of consumer industry. The aim of maintaining strong central power was better served by producing things the regime could continue to control than by giving away goods. We are now in a position to restate and explain Jałowiecki’s thesis on the production of space under socialism against the background of the Kornai-Verdery theory of 100%

80%

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20%

Other services

Transport, storage and communication Trade, repair and hotels Construction

Mining, manufacturing, electricity, gas, heat and water supply Agriculture, forestry and fishing

Fig. 10. Changes to the structure of the Hungarian economy between 1980 and 2003. The chart demonstrates the socialist centralized power’s aim of accumulating things at the center in ­contrast to the dominance of services in the capitalist market economy.

32

High

East European slums

Social status of population

North American slums

Low

West European slums Periphery of the city

City center Western European model North American model Eastern European model

the workings of the socialist economy. The structure and dynamics of the socialist economic system described above resulted in the prioritizing of public open spaces over private ones (e. g., an arrangement of large public lawns instead of a constellation of small private gardens) and the keeping of most of the housing in state or co-operative ownership. Interestingly, mass housing was a rare case where the regime managed to a certain extent to negotiate between the two preferences: it supplied masses with assets without losing central control over these, as they continued to be administered as part of the regime’s resources. Similarly, the hoarding of space by state-owned companies, besides Jałowiecki’s interpretation of it being the result of the companies’ aim of accumulating means of production, can also be explained as a way for the central power to accumulate resources in the center via the control of these through the industrial companies in its possession. In general, while the socialist state claimed to satisfy needs, redistributing products and assets to the masses remained secondary to accumulating things at the center. This was visible both in the allocation of financial resources and in the ways space was managed. Investment in the loss-making heavy industry was prioritized over providing for proper services; the latter constituting a mere 10 % of the GNP in the 1980s and, in contrast, over 40 % around 2000 (Fig. 10). As for space, overwhelming areas of land in central urban areas were left as reserves for industry-related activities and most of the housing stock in the cities’ second belt was neglected and left to deteriorate as peripheral prefabricated housing estates seemed not only more economical for building in large masses but also promised better control for the party state. Szelényi coined the term camelback urbanization for the resulting slum formation between historic centers and peripheral new towns characteristic of the socialist city (Fig. 11).73 Kornai’s theory of the economy of shortage, combined with Jałowiecki’s thesis on enterprises’ competition for space and complemented by Verdery’s thesis of a basic

Chapter 2  The Socialist Urban Legacy ­Narrative. Tensions of Socialist ­Urbanization

Fig. 11. Iván Szelényi’s 1983 diagram on slum formations in North American, Western, and Eastern ­European cities.

33

incongruence between what was necessary to legitimize the regime as a paternalistic state and what was essential to maintain its centralized power, leads us to the fourth remarkable tension of socialist urbanization. Although cities of the Eastern Block were not peculiarly dense, a constant drive for expansion and inefficient land use resulted in shortages of space. Kornai also coined the term ‘premature welfare state’ to characterize those socialist states, amongst them Hungary, that introduced generous welfare services while the state of their economies did not allow for the allocation of sufficient resources for these measures.74 In a response to the resulting tension, some of the socialist states went on to cautiously install economic reforms aiming at a partial marketization of their welfare systems.75 Kornai claims that the paternalistic state’s provisions were supposed to maintain or regain support for the regime and had controversial results, especially following the economic reforms. On the macroeconomic level, the welfare reforms caused high inflation, budget deficits and a growing over-demand for loans, unfavorable trade balance and surging debt and, as such, had a negative impact. However, they had positive consequences at the micro level: real property, a well-functioning legal infrastructure, a management elite and a working class whose members knew more

Existing mass housing in 1985

Existing mass housing in 1985 Planned mass housing

Planned mass housing in 1985

in 1985

Fig. 12. Mass housing as a means of accumulating things at the center: existing and planned mass ­housing estates in Budapest in 1985.

34

about how the market economy works – all this had contributed to making reformist states more attractive for foreign investment. In the limited markets that came into existence as a consequence of the economic and social reforms, some functioning of demand and supply and of the price mechanism was allowed but the behavior of individuals and institutions was not wholly determined by these market-type relations. A theoretical model of the socialist housing system also worked based on the economic model of the ‘premature welfare state’. The exclusion of a real market, the omission of housing costs from incomes, and the centralization of all important investment decisions characterized a system in which all important aspects of housing were meant to be under the control of state institutions. The sociologist Iván Tosics and the economist József Hegedüs claim in their account on The Disintegration of the East European Housing Model76 that housing was intended to be a form of public service in which the private sector should not have a role either in production or in distribution. Rents were kept artificially low with the immediate consequence that the state was neither able to provide new housing at an acceptable level, nor was it capable of properly maintaining buildings already in its portfolio. Another indirect effect was that a liberalization of the rents proved to be politically unfeasible after the regime change which, in its turn, contributed to the immense post-socialist drive towards full-blown privatization as state-management of housing under these conditions proved unsustainable.77 This takes us to yet another tension of socialist urbanization; the fifth one: The paternalistic socialist states implemented welfare systems which they then underfinanced, and thus kept on a rather low level.

Chapter 2  The Socialist Urban Legacy ­Narrative. Tensions of Socialist ­Urbanization

Fig. 13. The József Attila mass-housing estate in Budapest in the 1960s.

35

Path Dependency: Legacies of Socialist Urbanization’s Tensions After the regime change, central urban areas were still dotted by a hodge-podge of real estate in the possession of industrial firms. Socialist industry suffered a serious setback and a significant part of it collapsed. In the meantime, a return to market evaluation of real estate was carried out, complemented by an ‘overnight’ privatization of properties. The 1991 Law on Transferring Ownership of State Assets to Local Municipalities 78 assigned the ownership of formerly state-held apartment blocks to the district municipalities, while the Housing Law of 1993 determined the conditions under which these could then be privatized. It assigned a right of pre-emption to the apartments’ tenants,79 and resolved that the local municipalities were free to set the exact purchase price within a lower limit of the last year’s rent multiplied by three and an upper limit of 60 percent of the apartment’s estimated market value. It also granted the buyers the right to pay in installments, while those paying in one sum were to be awarded a substantial price reduction.80 As a result of the transformation shock, the national government as well as local governments were short on financial resources, and the shortage of money pushed the latter towards privatizing as much of their newly acquired housing stock as possible – the faster, the better. The forced pace of privatization freed them from much of their maintenance and development responsibilities as they got rid of large proportions of their portfolios, mostly comprising buildings in need of renovation. Furthermore, they could divert most of their revenue from privatization to other public tasks, although this primarily meant filling loopholes in the budget rather than financing structural reforms of municipal duties.81 This practice of massive privatization received heavy criticism based on a multitude of arguments. Firstly, it minimized the municipalities’ portfolios of affordable tenements at times when large segments of the urban population were driven into poverty by the transformation crisis. Secondly, by failing to set any income or wealth cap on eligibility for subsidized buying, it led to a transferal of property rights at highly subsidized rates to people not needing such subsidies. The injustice of this procedure was made heavier by the fact that only those better off were in a position to pay the full amount at once. People with already high savings became homeowners for the mere value of their triannual rent. Third, a huge gap emerged between the subsidized rates at which former tenants could buy their apartment, ‘a gift in the range of their 8–10 years’ salaries’, as the economist Zsuzsa Dániel puts it, and the rates at which non-owners could buy apartments on the secondhand market.82 Fourth, as not only housing but also development land was alienated in large quantities and at a fast pace, public authorities lost the ability to control urban transformation. This was due to them losing ownership of strategically important areas and building stocks before even having prepared development strategies for these. The resulting fragmented ownership structure also proved to become an obstacle in the way of renovation, as owner consensus was difficult to achieve. The major consequence of this wave of privatization can be summarized as enhanced spatial segregation. It mobilized those better off and, as sociologist János 36

Ladányi points out, from the mid-1990s on their movements changed from switching to bigger or better apartments within their original districts to moving from deteriorating neighborhoods to single family houses on the city’s fringes or in the agglomeration.83 This trend resulted in massive suburbanization on the one hand, wherein

ments with immense difficulties in their attempts to make renewal programs. Local governments, driven by a lack of resources due to rapid privatization, developed a ­laissez-faire attitude towards private investment in the hope of it becoming the engine of spontaneous redevelopment. This tendency, combined with the second belt’s favorable position within the urban topology and the availability and affordability of land there, resulted in the second urban belt becoming the breeding ground for introverted cluster developments by private investors. These were separate projects, planned and built by one investor, or alternatively by an investment group founded specifically for a particular development. They were always of a mixed-use nature, mostly with retail – or sometimes cultural – units as their core element, complemented by apartments and offices. Their financial model was either fully based on private investment or the developments were realized in public-private partnerships. The emerging urban structures are of an introverted type, usually organized around a central and protected, semi-public space. They are to be found exclusively in the vicinity of Budapest’s second ring, an area still central yet including relatively large spaces for new development in the 1990s and 2000s (Fig. 14.).

Chapter 2  The Socialist Urban Legacy ­Narrative. Tensions of Socialist ­Urbanization

Budapest lost approximately 20 % of its population within the first decade after the regime change, and in the ghettoization of large areas in central urban areas on the other. This tendency most strongly affected Budapest’s second belt, as it was predicted by Szelényi’s ‘camelback theory’ and described by the historian Elisabeth Lichtenberger’s study pointing at slum formation along the second ring road.84 These untended neighborhoods were complemented by industrial land in the second belt that progressively became more and more vacant as a result of socialist industry’s collapse and rising land values following a return to the market evaluation of real estate. The resulting combination of post-industrial wasteland and structurally weak, deteriorated neighborhoods confronted the under-resourced post-1989 local govern-

37

1. West End City Center 2. Millennial Park 3. MOM Park 4. Allee and Simplon Yard 5. IT Offices and Research Campus 6. Millennial City Center 7. Corvin-Quarter

1

2

3 7

4 6 5

Post-War Slum Formation Inter-War Slum Formation Public Institutions Inner City Prefabricated Housing Industry and Rail Infrastructure Investor Projects 1990-2010 0

Fig. 14. Slum formation, industrial land, and private investor projects in Budapest’s second urban belt.

This is how, decades later, socialism’s housing inequalities and irrational land use, mediated by the transformation shock, the collapse of socialist industry and the massive privatization of housing and real estate, have led to a type of urban development mostly characterized by business-dominated development projects not integrated into any grand urban design.

38

5 km

Investor Compounds Developed Between 1998 and 2010 1. The West End City Center is a shopping mall developed by TriGránit Ltd. and built by Arcadom Ltd., in both of which Hungary’s once-richest man, Sándor Demján, had a dominant capital share. It is located next to the Western Railway Station (No. 1. on Fig. 14.), on former railyards abandoned by the Hungarian State Railways (MÁV) by that time. Opened on November 12, 1999, it is known for having been the largest mall in Central Europe with its planned programs reaching a surface area of 200,000 square meters. Larger ones have since been inaugurated including the Arena Plaza, also in Budapest. West End includes 49,700 square meters of retail surfaces, 20,900 square meters of offices, a Hilton International Hotel occupying 15,800 square meters, 22,300 square meters of rooftop gardens, and a cinema with fourteen projection rooms. 2. The Millennial Park was created on the territories of the former Ganz electrotechnical factory in Buda (No. 2. on Fig. 14.). The reconstruction’s fundamental aim was to keep and convert the valuable building stock, to accommodate an exhibition and conference center and to be surrounded by a public park. The two preserved halls, complemented by a new entrance hall and by the 35,000 square meter-large park surface, comprise Hungary’s largest exhibition and cultural event space. The initial idea was for the complex to first serve the purpose of the millennial festivities until the end of 2001, to then be commercialized. The project – complemented by the construction of an office building on privatized land at the expense of green public open space that was not included in the original plan85 – ultimately came to a completion with a halfyear delay.86 The development’s reception was controversial. On the one hand, it was praised for its fresh, progressive landscape design87; on the other it was overshadowed by alleged fraud, never properly investigated.88

Chapter 2  The Socialist Urban Legacy ­Narrative. Tensions of Socialist ­Urbanization

Fig. 15. The West End shopping mall's characteristic porch roof.

39

Fig. 16. The West End shopping mall’s main entrance.

Fig. 17. Aerial view of the Millennial Park (top left). Fig. 18. One of the office blocks not part of the initial scheme (right). Fig. 19. The park’s central pond (bottom left).

Fig. 20. The MOM Park’s main entrance and adjacent office complexes.

42

3. MOM Park (No. 3. on Fig. 14.). is a shopping mall and housing-office complex, built between 2000 and 2001 by Bajor Építő Ltd.89 on former industrial sites of the Hungarian Optical Works (MOM) in Buda. Designed by architects Antal Puhl (shopping mall) and Tamás Noll (additional blocks), it comprises 20,000 square

Fig. 21. The Skála department store’s opening in 1976.

meters of retail surface, 30,000 square meters of office space and 166 premium apartments, built with a total budget of 40 billion forints. A year after its opening,

the project’s architects received the Pro Architektura prize for their designs.90 In 2005, the complex was purchased by PBW Real Estate Fund, specializing in Eastern European real estate. The transfer allowed the former owners, Bayerische Hausbau International GmbH and Bayerische Landesbank Europa-­ Immobilien-Beteiligungs GmbH, to realize generous yields and the mall has also been providing its new owner with outstanding revenues ever since its opening in 2001.91 4. The Allee and Simplon Yard development is a shopping mall with complementary housing and office blocks, developed by the Dutch ING Real Estate (No. 4. on Fig. 14.). The complex that opened its gates on November 11, 2009 is a replacement for the former Skála department storehouse92 and its overground parking lot. It comprises 47,000 square meters of retail surface, 7,000 square meters of offices and 89 premium apartments, and is currently jointly owned by Allianz Real Estate and Nationale Nederlanden.93

Fig. 22. The Allee shopping mall.

43

Fig. 23. Office row adjacent to the National Theater.

Fig. 24. The Palace of Arts.

5. The Millennial City Center is a quarter on the banks of the Danube, erected on formerly state-owned land that was supposed to become the site for the 1996 Budapest EXPO (No. 6. on Fig. 14.). In 1999, following two unsuccessful tenders – one in 1998, the other early 199994 – the government negotiated a deal with Sándor Demján’s TriGránit and sold the 6 hectares of development land to their subsidiary, Duna Sétány Székház Ltd., for 2,385 billion forints. The minimum offer price stated in the 1999 tender was 3,469 billion forints, around 50 % higher than the actual selling price. Furthermore, the state undertook the costs of decontaminating the formerly industrial land. Some have seen nexus between the transaction price below the site’s supposed market value and Demján’s willingness to cheaply and rapidly build the new National Theater, 95 a pet project of then prime minister Viktor Orbán. However, István Sokorai, CEO of Duna Sétány Székház Ltd. denies these claims; he argues that they took part in the former tenders and their offer was the best one on both occasions – the state then simply desisted from contracting.96 Cultural and entertainment functions were planned around the 15,000 square meter site of the National Theater. The main program was supposed to be a giant conference center, seating 5,000. While the National Theater opened its gates on March 15, 2002 in the middle of the campaign for the upcoming parliamentary elections, the Millenniary City Center’s foundation stone was laid a week later, on March 22. The planned conference center remained unrealized, but Arcadom Inc., Demján’s contractor company, got involved in realizing yet another state project, the Palace of Arts. This is a complex comprising a modern museum (13,650 sq. meters), a philharmonic concert hall (22,600 sq. meters), and a theater (16,800 sq. meters), inaugurated on March 14, 2005. The rest of the neighborhood was developed over the following decade with high density housing and office blocks. 6. The Corvin-Quarter development97 (No. 7. on Fig. 14.) is unique for being the only case so far in Budapest where the local municipality integrated a private developer grand project into its district renewal program.98 It thus unites the two most important post-socialist inner-city urban transformation types, namely the investor compound and the block-scale neighborhood renewal. It is also the biggest tabula rasa urban development in post-socialist Budapest’s history. The project promised a ‘new urban product’ to be promoted for the 22 hectares of deteriorated area. According to the plans, the income generated through the commercialization of the development area for the private investor was going to finance additional public renewal tasks 44

within the district. The Corvin-Quarter has been under construction since 2006 and has resulted in the dislocation of tenants and home owners from over a thousand municipal and private properties. The new constructions house around 2,800 apartments, 43,000 square meters of office space, and a shopping mall with 34,600 square meters of retail surface.99 The project’s reception is mixed. On the one hand, some critiques are moved by a nostalgia for the eliminated small-townish blocks. On the other hand, the architectural performance of the newly established quarter has also been questioned. At the same time, the project received, in 2010, Bloomberg’s European Commercial Property Award100 in the category ‘Best mixed-use development in Europe’, and was given the Urban Land Institute’s ‘Global Award for Excellence’ in 2014.101 In conclusion, let me add that the combination of the transformation crisis with the return to land values resulted – via the mediation of ‘overnight’ privatization of housing to tenants and of the rapid commercialization of development land – in the

Fig. 25. The Corvin-Quarter’s main promenade.

Chapter 2  The Socialist Urban Legacy ­Narrative. Tensions of Socialist ­Urbanization

cut-back and privatization of municipal planning departments.102 This, in its turn, led to the outsourcing of planning tasks, often resulting in conflicts of interest. In an interview given to the author of this book, István Schneller, then chief architect of Budapest,103 exemplifies this tendency by the case of the Allee development where, as described above, the architecture firm developing the shopping mall’s designs104 was also commissioned by the municipality to prepare changes to the District Regulation Plan (KSZT) – by way of a contract between the district and ING Real Estate.105 Schneller claims that this obvious conflict of interest resulted in the combination of enhanced built densities and a loss of public space qualities within the project.106

45

Fig. 26. The Millennial City Center (left) and a new IT campus (right) along the Danube in southern Budapest. See Fig. 8. on the state of these sites in the early 1990s.

Others praise the very same contract between the city, the district, and the developers as a guarantee for high urbanistic qualities.107 Nevertheless, the outsourcing of planning tasks contributed to reducing the local governments’ abilities to keep structural changes under control – a process already triggered by the commercialization of development land from the 1990s on, prior to new regulations meant to accommodate the emerging new market conditions would having been introduced.108 The discussion of the above cases reveals how the internal tensions of socialist urbanization led to an absence of significant top-down restructuring of the city, mediated by the transformation shock, drastic reduction in municipal planning capacities, and consequently the outsourcing of public planning tasks. Instead of following a unified vision on how road infrastructure should accommodate the explosion of car use, or how land use strategies should react to the return to a regime of land values, the city’s restructuring continued on a rather small scale, driven by fragmented private development demands. Concluding remarks As was already described earlier in this chapter, Budapest’s socialist urbanization between the 1950s and 1980s prioritized industrialization at the expense of housing, services, and public infrastructure. Social-cultural infrastructure also remained rather neglected. For example, as explained in the Kulturkampf Narrative of this book, after its demolition in 1965 a new building for the National Theater was left unrealized until the regime change, although multiple designs had been developed for various sites within the city. Thus, Budapest entered its new era in 1989 with a high demand for symbolic public projects, due to under-urbanization on the one hand, and to the desire to celebrate the birth of a new democracy on the other. However, political polarization and a lack of sufficient resources for these public developments to be carried out led to the failure of the vast majority of such projects.109 Thus, yet another link can be established, this time between the socialist city’s under-urbanization and the conspicuous scarcity of large-scale public projects of cultural and symbolic significance in post-socialist Budapest. The wave of suburbanization that followed the privatization of housing, catalyzed by the deteriorated state of the formerly publicly-owned housing stock and by irrational land use due to the constant territorial expansion drive of industrial firms, had further consequences. Firstly, it put the focus of development beyond the city’s boundaries. Secondly, it led to development demands difficult to meet either by the municipalities of the agglomeration or by the city of Budapest. The first faced immense difficulties in providing social infrastructure for their massively growing populations, while the latter failed in expanding its road and transport infrastructure to cater for the new commuter demands. Neither sufficient budgetary resources nor the political will were available as the changing legal context left loopholes in terms of responsibilities within Budapest’s metropolitan agglomeration. In this highly fragmented system the importance of the meso level, sub-national yet supra-metropolitan, was acknowledged in 1996 when the Act on Spatial Planning and Development was adopted.110 48

That Act established development councils at the county and regional levels, such as the Budapest Agglomeration Development Council. However, relations between the city and its surroundings remained problematic, as neither Pest County nor any other entity except the National Parliament had any power to influence decisions made by the settlements. At the same time, given the lack of any formalized ‘agglomeration’ structure, the position of individual settlements proved to be too weak to negotiate effectively with Budapest.111 This situation was somewhat eased but not resolved in 2005 by the Structural Regulation Plan of B ­ udapest’s Agglomeration entering into force.112 The various micro-narratives within the Socialist Urban Legacy Narrative, rather than extinguishing each other’s effects, describe mutually supportive stories and constitute a systemic interpretation of the nexus between the tensions of socialist urbanization and the syndrome of Budapest’s post-socialist urban development. Their interrelations also become visible in the univocal cross-relations between some of their elements, as described above.

historical background

systemic transformation

symptom-group

resource shortages

housing privatization introduction of land values

tensions of socialist urbanization underurbanization premature welfare system of the paternalistic state

transformation crisis, collapse of the industry, severe budget shortages

public hand unable to keep structural changes under control municipalities engaging in cooperation with private investors absence of significant top-down restructuring of the city (land-use, infrastructure, etc.)

cutback of planning departments, outsourcing of planning tasks massive suburbanization

administrative allocation of housing generating housing inequalities

investor urbanism: spreading of introverted cluster developments

irrational land use despite centralized spatial planning

district renewal without bursting the limits of inherited urban structures

constant expansion drive resulting in shortages of space

1947-1989

conspicuous scarcity of large-scale public projects of cultural and symbolic significance

1989-1990

urban development mostly characterized by businessdominated development projects not integrated into any grand urban design

1990-2010

Fig. 27. Formal scheme of the Socialist Urban Legacy Narrative. See page 132 for the abstract model’s combined and detailed scheme.

49

21 János Ladányi, ‘Létezett-e szocialista típusú urbanizációs modell?’ [Did a Socialist Type Urbanization Model Exist?], in Egyenlőtlenségek, redisztribúció, szociálpolitika. Válogatott tanulmányok (1974 –2010) [Inequalities, Redistribution, Social Politics. Selected Studies (1974 – 2010)], ed. Ladányi (Budapest: Új Mandátum Kiadó, 2010), 410 –20.  22 Szelényi, Urban inequalities under state socialism, 2.  23  David M. Smith, ‘The Socialtist City’, in Cities After Socialism. Urban and Regional Change and Conflict in Post-Socialist Societies, eds. Gregory Andrusz, Michael Harloe and Iván Szelényi (Oxford: Blackwell Publishers Inc., 1996), 70 –99.  24 Richard Antony French, F. E. Ian Hamilton, eds., The Socialist City (Chichester: John Wiley & Sons, 1979). In its preface the authors introduce their work as an examination of ‘the processes in operation, the thinking behind, and the patterns resulting from, the planning and management of cities in socialist countries.’ Their major focus was on the cities’ internal spatial structure, the work having been organized around the basic question of whether or not the socialist city was fundamentally different from the city in capitalist societies. Ibid., xi.  25  Richard Antony French, F. E. Ian Hamilton, ‘Is There a Socialist City?’, in The Socialist City (see note  24 above), 1–21.  26  György Enyedi, ‘Urbanization under Socialism’, in Cities After Socialism. Urban and Regional Change and Conflict in Post-Socialist Societies, eds. Gregory Andrusz, Michael Harloe and Iván Szelényi (Oxford: Blackwell Publishers Inc., 1996), 101. Note that this is a generalizing statement. There were substantial differences between the various spatial planning regimes of Western Europe at the time. The Netherlands, for example, was known for its centralized administration of planning. Christian Salewski, Dutch New Worlds. Scenarios in Physical Planning and Design in the Netherlands, 1970 –2000 (Rotterdam: 010 Publishers, 2012), 76 –109.  27 David Harvey, Social Justice and the City (London: Edward Arnold, 1973).  28  Manuel Castells, The Urban Question a Marxist Approach (Cambridge: MIT Press, 1979).  29 Ibid., 64 .  30  Pearse Murray, Iván Szelényi, ‘The city in the transition to socialism’, International Journal of Urban and Regional Research 8, no.  1 (March  1984): 90 –107.  31 Ibid., 91.  32  György Konrád, Iván Szelényi, ‘A késleltetett városfejlődés társadalmi konfliktusai’ [Social Conflicts of Delayed Urbanization], Valóság 12 (1971): 19 –35. The authors suggested that the urban growth of the 1960 s in the Eastern Block fell behind industrial growth. According to them this period of ‘actually existing socialism’ could be best described as a process of ‘under-urbanization’. By this they were referring to the regional system in which an increasing proportion of the newly proletarianized population maintained its rural residence and started commuting from villages to urban workplaces.  33  György Berkovits, Világváros határában [On the Margins of a Metropolis] (Budapest: Szépirodalmi Könyvkiadó, 1976).  34 Ladányi, ‘Létezett-e szocialista típusú urbanizációs modell?’, 416.  35  Amongst other features he mentions the lack of a relationship between land value and price-mechanisms of demand and supply; the high ratio of state-subsidized public housing; the predominance of mass housing in the habitat regime; the deterioration of older parts of the city; belated urbanization and the underrepresentation of in-

50

frastructural developments compared to industrial ones; and the positive correlations between people’s positions within the social and territorial hierarchies.  36  Ray Pahl, ‘Managers, Technical Experts and the State’, in Captive Cities, ed. Michael Harloe (New York: John Wiley, 1977 ), 49 –60.  37  Herbert Gans, ‘American urban theories and urban areas’ (paper presented at the 10 th World Congress of Sociology, Mexico City, 1982).  38 Szelényi, Urban Inequalities under State Socialism, 3. With this argument Szelényi also criticises Manuel Castells, who said in his ‘Urban Question’ that the organization of different social classes and their spatial relations in socialist societies are highly dependent on the respective historical conjuncture.  39 E. g., Post-war redevelopment demands, the headway of modernism in architecture and planning, and technological advancements in the construction industry have contributed to the proliferation of mass housing neighborhoods throughout Europe – both in the East and the West.  40  In his research, Szelényi kept inequalities inherited from the capitalist past and those maintained by surviving market mechanisms’ inequalities fixed so as to isolate the ones that were new and arose from the socialist system of production and distribution. 41 See note 3 above.  42  Szelényi and Konrád conducted fairly large-scale surveys on new mass housing estates in Budapest, Pécs and Szeged, based on a questionnaire. As the questions included the interviewees’ professions and the jobs they held, the authors could also aggregate the population composition of the housing estates accordingly. Szelényi and Konrád argued that by studying new housing developments in socialist Eastern Europe, one can observe the most distinctive effects of socialist urban transformation. This, according to them, is due to the fact that new housing was built almost exclusively in the form of new mass housing estates and financed by the socialist state, and was then administratively allocated to those in need. As a result, Szelényi and Konrád were expecting a rather balanced population in the studied estates.  43  József Hegedűs and Iván Tosics point out that a new housing policy introduced in the 1970 s improved working class access to subsidized state housing while the wealthier, including the socialist elite, turned towards private forms of building. József Hegedűs, Iván Tosics, ‘A kelet-európai lakásmodell felbomlása Magyarországon (1950 –1989)’ [Disintegration of the East-European Housing Model in Hungary (1950 –1989)], in XXX, 1963 -ban alakult meg a szociológiai kutatócsoport (Budapest: MTA Szociológiai Intézete, 1994), 125 –42 (134).  44 Enyedi, ‘Urbanization under Socialism’, 103 .  45 Enyedi claims that while different mechanisms regulated these phenomena in the two social systems, the underlying processes were rather similar. He brings the example of the role of market-level land values as a frequently cited difference between capitalist and socialist urbanization. In the market economy, the locational value of urban land (what he calls: ‘the micro-­geography of land prices’) determines the territorial regularities of its use. Here, the land’s locational value is expressed in monetary terms; while in the planned economy it was registered by detailed regulations, norms and decrees on resource allocations. Despite this difference, locational patterns in Eastern and Western

ies’, Theory and Society 28 , no.  1 (1999): 39 –78 , accessed March  10 , 2015 , doi: 10 . 1023 /A: 1006996806674 .  53  Henri Lefebvre, ‘Le mode de production étatique’, De l’État 3 (Paris: Union générale d’éditions, 1977 ).  54 Henri Lefebvre, ‘It Is the World That Has Changed’, in State, Space, World: Selected Essays, Henri Lefebvre, eds. Neil Brenner and Stuart Elden (Minneapolis: University of Minnesota Press, 2009), 153 –64 . Originally published in Yvon Bourdet, Olivier Corpet, ‘Une interview d’Henri Lefebvre’, Autogestion et socialisme 33 –34 (1976), 115 –26 .  55 Ibid., 158 .  56 Łukasz Stanek, Henri Lefebvre on Space: Architecture, Urban Research, and the Production of Theory (Minneapolis: University of Minnesota Press, 2011), 65.  57 Ibid., 65. Original: Henri Lefebvre, The Production of Space, 54 .   58  Enyedi, ‘Urbanization under Socialism’, 102.  59  Ladányi, ‘Létezett-e szocialista típusú urbanizációs modell?’, 418 .  60  Windy Vandevyvere, Andreas Zenthöfer, ‘The housing market in the Netherlands’, Economic Papers 457 (June  2012): 6 –7. The rental housing market in the Netherlands is dominated by the regulated social housing segment. 79 % of all tenants rent dwellings from social housing corporations called ‘woningcorporaties’. These are non-profit organizations that have to act on a commercial basis, but are required to use their profits for the provision of good quality affordable housing. While the share of social sector dwellings in the total housing stock had constantly grown in the 20 th century until a peak of 39 % in 1998 , it has, since, slowly decreased to 33 % at present – mainly due to innovations in mortgage financing.  61  Budapest’s postwar population continuously expanded until the early 1980 s and reached around 1.4 million inhabitants in 1941, 1.6 million in 1949, 1.8 million in 1960, 1.9 million in 1970, and slightly above 2  million in 1980 . Gábor Preisich, Budapest városépítésének története 1919 –1969 [The history of Budapest’s urban development 1919 –1969] (Budapest: Műszaki Könyvkiadó, 1969), 8 –9; Furthermore, in 1966 the Law on the 3 rd Five-Year Plan ordered that the increase of labor-intensive industries in Budapest should not exceed the local population’s labor capacities. See: Act II/1966.  62  Richard Antony French, F. E. Ian Hamilton, ‘Is There a Socialist City?’, in The Socialist City (see note 24 above), 15 .  63 Stanek, Henri Lefebvre on Space, 65 .  64 Ibid., 66, Originally published in Bohdan Jałowiecki, Społeczne wytwarzanie przestrzeni [Social Production of Space] (Warsaw: Wyd. Książka i Wiedza, 1988), 195 .  65  Katherine Verdery, What Was Socialism, and What Comes Next? (Princeton: Princeton University Press, 1996).  66 Ibid., 20.  67  Michael Burawoy, The Politics of Production: Factory Regimes Under Capitalism and Socialism (London: Verso, 1985).  68 Katherine Verdery, ‘What Was Socialism, and Why Did It Fall?’, in What Was Socialism, and What Comes Next? (see note 65 above), 19 –38 .  69 Ibid., 21.  70  According to János Kornai, when a socialist firm was to order raw materials and the allocation of human resources, it acted as a buyer with uncertain expectations. Knowing that the production might not have the planned volume or input-output combination, socialist firms developed various forms of safety strategies, amongst them the hoarding of materials and workforce. The longer the expected time between two dates

Chapter 2  The Socialist Urban Legacy ­Narrative. Tensions of Socialist ­Urbanization

European ­cities were similar as different functions have comparable locational requirements independent of the regime they are in. Although market demand for rational land use was the driving force in the West and strong centralized planning and governance in the East, the resulting spatial patterns were markedly comparable.  46 György Enyedi, Az urbanizációs ciklus és a magyar településhálózat átalakulása [Urbanization Cycles and the Transformation of the Hungarian Settlement Network] (Budapest: Akadémiai Kiadó, 1984). Enyedi’s inaugural talk at the Hungarian Academy of Sciences, December 6, 1982.  47  Hungary’s industrial revolution in the 1860 s was mostly limited to Budapest, while the most populous provincial cities have remained agrarian country towns. Enyedi points out that during the decades after the industrial revolution, territorially scattered small-scale industry and manufacturing have retained their dominant role. Important is the fact that infrastructural innovations, such as railroads, public transport and street lighting in cities, as well as the telephone, appeared in Hungary with only a slight delay as compared to Western Europe. The First World War, the following Treaty of Versailles and the conservation of backward social relations, however, interrupted this development process only for it to resume during socialist industrialization in the 1950 s and 60 s. According to Enyedi, in this second phase of explosion – as a result of systematic development – urban population growth was more evenly distributed, and thus a network of medium-scale and large towns was established.  48  As Enyedi mentions, while firms in Budapest had occupied 51 % of the country’s industrial workforce in 1964 , this figure dropped to 25 % by 1982. Furthermore, industry had not only moved to provincial cities but also to villages, one third of which had industrial enterprises employing more than 10 people in 1982. The appearance and development of urban agglomerations and the diversification of villages also hint at the presence of relative deconcentration.  49  The first signs of rural population growth were registered in the United Kingdom in the 1950 s. In the United States the growth of the rural population in the 1970 s and ’80 s was four times as strong as the increase in urban population. Note that the world’s overall urban population, nevertheless, was still growing at the time (and still is), as the populous developing countries were only commencing their urban explosion phase.  50 The 1990 census shows a population of about 2 million (about 40,000 less than ten years earlier), while in 2001 the capital had a mere 1.78 million inhabitants. Source: Hungarian Census of 1990, Budapest: Központi Statisztikai Hivatal, 1992 and Hungarian Census of 2001, Budapest: Központi Statisztikai Hivatal, 2002.  51  The population decline more or less terminated around 2005 and Budapest gained 25,000 new inhabitants between then and 2010. Whereas approximately 3000 new apartments were built in 2000, more than 12,000 were completed in 2005. Interestingly, while the post-2008 real estate crisis practically put the construction sector to a halt, the city’s population has still been expanding. According to the Central Statistical Office it reached 1.744 million in 2014 , after the low of 1.675 in 2005.  52  Neil Brenner, ‘Beyond state-centrism? Space, territoriality, and geographical scale in globalization stud-

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of supply, the greater the variability of the time intervals between deliveries; the more frequently shortages occured at the moment of purchase, the more uncertainty about whether the planned input-output combination was going to be observed in production; and the less the specific material was substitutable (all expectations concerning elements of purchase and production), the larger the desired input stock of the raw material proved to be. This, ultimately, contributed to maintainang a state of shortage. János Kornai, Economics of Shortage, (Amsterdam, New York, Oxford: North-Holland Publishing Company, 1980), A: 86 –94 .  71  János Kornai, The Socialist System. The Political Economy of Communism (Oxford: Clarendon Press, 1992). János Kornai, Economics of Shortage (Amsterdam, New York, Oxford: North-Holland Publishing Company, 1980).  72  Verdery, ‘What Was Socialism, and Why Did It Fall?’, 25 .  73 Szelényi, Urban Inequalities under State Socialism, 148 .  74 Olivier Blanchard, An Interview with János Kornai, in ‘Macroeconomic Dynamics’, Volume  3, Issue  3, September  01, 1999. 75  The so-called ‘New Economic Mechanism’ was an allround restructuring of the socialist economy in Hungary, elaborated in the mid-1960 s and enacted on January 1, 1968 . It contained the following major changes: 1) it reduced the role of central planning and increased corporate autonomy in production and investment; 2) it liberalized prices, allowing the price of certain products to be set in accordance with market demand; and 3) it replaced the centrally determined wage system with a flexible regime in which companies could determine wages, albeit within certain limitations. János M. Rainer, Magyarország története. A Kádár-korszak 1956 –1989 (Budapest: Kossuth Kiadó, 2010), 40 –4 .  76  József Hegedüs, Iván Tosics, ‘Disintegration of the East-European Housing Model’, in Housing Privatization in Eastern Europe, eds. David Clapham, József Hegedüs, Keith Kintrea, Iván Tosics, with Helen Kay (Westport, Connecticut and London: Greenwood Press, 1996).  77  See more on the post-socialist privatization of state-owned housing in Chapter 3 , 65 -75.  78  Act XXXIII/1991 (August  2).  79 Act LXXVIII/1993 (July 30), Article  49.  80  Ibid., Article  53.  81  See note  77 above.  82  Zsuzsa Dániel, ‘A bérlakás-privatizáció paradoxona. Nemzeti ajándék vagy ráfizetés?’ [The paradox of tenement privatization. National gift or detriment?], Közgazdasági Szemle XLIII. (March 1996): 204 –30 (212).  83  János Ladányi, ‘A lakóhelyi szegregáció változó formái Budapesten’ [Changing Forms of Residential Segregation in Budapest], in A történelmi városközpontok átalakulásának társadalmi hatásai [Societal Impacts of the Historical Centers’ Transformation] ed. György Enyedi (Budapest: MTA Társadalomkutató Központ, 2007 ), 199 –215 (206).  84  Elisabeth Lichtenberger et al., Stadtverfall und Stadterneuerung in Budapest (Vienna: Verlag der Österreichischen Akademie der Wissenschaften, 1994), map appendix in sleeve.  85  ‘Millenáris irodaházak’, accessed March 16, 2017, http://epiteszforum.hu/millenaris-irodahazak  86 The temporary exhibit Álmok álmodói  – Világraszóló magyarok [Dreams Dreamers – Sensational Hungarians] was supposed to open its gates on March  15, 2001 but only did so on December 17. Consequently, the contract of Millenáris Inc., the firm responsible for the mil-

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lennial events, was prolonged.  87  However, the project was also criticized for the team of young landscape architects, Újirány Csoport, having been selected for the design task without an open competition, via means of direct commission. See the project under ‘Millenary Park’, accessed March 13, 2017, http://ujirany.hu/project/millenary-park  88  An extensive company-net was established for the development and operation of the Millennial Park. This included a public company, Millenáris Kht., founded for the project’s maintenance, and a number of private firms contracted by the maintainer (Millenáris Inc., Pentaton Ltd. and Kisrókus 2000 Ltd. – to name a few). While the first operated transparently and its spending of public funds was intensly monitored, the latter group referred to their private business interests and did not publicize their spending. This scheme was allegedly used both to overcharge the state and to favor entrepreneurs close to the then-governing Fidesz party. After changes of government in 2002, investigations targeted operations under this model but the prosecutor’s office, led by former Fidesz party member Péter Polt, dropped all charges.  Zoltán Haulis, ‘A Millenáris-ügy: Látszat és valóság’, Magyar Narancs 22 (May 27, 2004), accessed March 16 , 2017, http://magyarnarancs.hu/belpol/a_millenaris-ugy_-_i_ resz_latszat_es_valosag-58305 #  89 A company jointly owned by the German firm Schörghuber and Bayerische Landesbank, founded for development projects in Hungary.  90  A prize annually given by the Interior Minister for recent remarkable architectural projects in Hungary. See: http://epiteszforum.hu/pro-architectura-dij-2002  91  See for example: ‘Budapest Malls Still Attractive’, accessed March 17, 2017, http://www.capitalrealestate.hu/­ real_estate_­budapest/­news/­20050517_Budapest_Malls_­ still_Attractive.htm  92  Skála was a department store run by the cooperative ÁFÉSZ ,whose director at the time was Sándor Demján, the later real-estate mogul and Hungary’s richest man in the 1990 s and 2000 s. He was owner of the investment firm TriGránit, developers of West End City Center, the shopping mall Polus Center, and the Millennial City Center.  93 ‘Rólunk’ [About Us], Allee, accessed March  17, 2017, http://allee.hu/rolunk 94 The tenders were held in May  1998 and May  1999 respectively.  95 See more on the National Theater’s story in Chapter  4, 109 –16.  96 ‘Soroksári út: egy újabb városközpont: Csatolt területek’, Magyar Narancs 12, no. 18 (April 5, 2000), accessed March 17, 2016, http://magyarnarancs.hu/belpol/ soroksari_ut_egy_ujabb_varoskozpont_csatolt_teruletek-60516  97  This development is also the main micro-level case study of this book, introduced with the aim of testing and exemplifying the abstract model developed by the thesis. See more in Chapter  6 of this book.  98 ‘Urban Renewal Program of Józsefváros’, Municipality of Budapest’s 8 th District, 1998 .  99 ‘Közép-Európa legnagyobb belváros-megújítási programja’, accessed March 18 , 2017, http://www.corvinsetany.hu/ujbelvaros_ koncepcio.php  100  The Corvin-Quarter was selected the best mixed-used development project in Europe at the European professional competition International Property Awards organized jointly with Bloomberg Television. ‘European Commercial Property Awards’, accessed November 15, 2016, http://www.futureal.hu/en/awards/awards/

take care of the necessary amendments to local regulations. ‘Új városközpont a Budai Skála helyén’, epiteszforum.hu, December 06, 2007, accessed March 01, 2017, http://epiteszforum.hu/uj-varoskozpont-a-­budai-skalahelyen  106  See note  103 above.  107  For example, György Fazekas, the project’s opponent in its design jury, calls attention to the long reconciliation between the parties involved. Péter Haba, ‘Skála helyett pláza-hibrid – Tervtanács előtt az “(Új)Budai Városközpont” terve’, accessed March 1, 2017, http://epiteszforum.hu/skala-helyett-plazahibrid-tervtanacs-elott-az-uj-budai-varoskozpont-terve  108  Note that the first general urban plan after the regime change did not come into force before 1998 , giving immence advantage to private developers operating under legal loopholes. See more on this in Chapter 3 of this book, where handicaps of the post-socialist planning regime are also explained.  109  Besides financial shortages, lack of consensus between different political sides on how architecture should represent the state was responsible for the frustration of a score of large-scale public projects. See more on this in Chapter  4, 104 –25.  110  Act XXI/1996 (May 22).  111  Iván Tosics, ‘Spatial restructuring in post-socialist Budapest’, in The Urban Mosaic of Post-Socialist Europe, eds. Sasha Tsenkova and Zorica Nedovic-Budic (Heidelberg: Physica Verlag, 2006), 131–50 (135).  112 Act LXIV/2005 (October 8).

Chapter 2  The Socialist Urban Legacy ­Narrative. Tensions of Socialist ­Urbanization

e u ro p e a n _co m m e rc i a l _ p ro p e r t y_ a wa rd s _ 2 . h t m l  101  Thirteen real estate developments from around the globe, including six in North America, four in Europe, and three in Asia, have been selected as winners in the 2014 Urban Land Institute (ULI) Global Awards for Excellence competition, widely recognized as the land use industry’s most prestigious recognition program. ‘ULI Announces Winners for the 2014 Global Awards for Excellence Competition’ accessed November 15 , 2016 , http://uli.org/ press-release/2014 -global-awards-excellence/  102  E. g., Liquidation of the state-run planning bureau BUVÁTI. See more in Chapter 3 , 81 –2 .  103 István Schneller, interviewed by the author, March 27, 2009.  104  Finta Stúdió is owned by architect József Finta, designer of a handful of key projects both before and after the regime change. His portfolio includes, for example, most of the hotel buildings erected in the 1960 s and 70 s along the Danube; the Budapest Congress Center and Hotel Forum from the 1980 s as well as the WestEnd City Center (see earlier in this Chapter, 39); a conference center in the Millennial City Center (see earlier in this Chapter, 44); the Allee shopping mall (see earlier in this Chapter, 43) and the new headquarters of the Hungarian Television after the turnover.  105  Budapest’s and Újbuda’s (the 11th district) municipalities signed a development contract with ING Real Estate, which contained public space development to the value of 2 billion forints and requested the developer to

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Chapter 3  The Decentralization Narrative. Retroactive Urban Planning vis-à-vis New Local Governance and Property R ­ egimes

Chapter 3  The Decentralization Narrative Retroactive Urban Planning vis-à-vis New Local Governance and Property ­Regimes

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Under the party-state system, all collective decisions, whether political or economic, were taken within a single, unified hierarchy. After the regime change, centralizing tendencies gave way to tendencies of decentralization. In some domains, decentralization proved to become no less excessive than the earlier drive toward centralization.113 Local government was one of these domains, as here the appeal to democracy and self-rule gave a strong ideological push to the decentralizing drives. And Budapest was no exception. Firstly, a two-tier municipal system with a uniquely powerful and autonomous district level was introduced there. City-level governance was crippled, and there was lack of clarity on the division of authority and competence between the city and the districts. These phenomena, combined with the districts’ ‘my house is my castle’ attitude made strategic planning very difficult. Secondly, the vast majority of the originally state-owned, later municipally possessed housing stock was privatized in the 1990s. Decentralization and fragmentation of ownership had three major consequences: enhanced spatial segregation, abandoned renovation plans, and the public authorities’ inability to provide tenements in sufficient numbers. Thirdly, while municipal planning departments were cut back, and thus public planning tasks often outsourced, the modus operandi of urban planning remained largely unchanged, not properly adapted to the transformation of the economic and political systems. The dysfunctional and retroactive planning regime that emerged as a result, together with the absence of proper metropolitan governance, left Budapest without a coherent vision on how the city should develop. This, in its turn, contributed to the proliferation of business-dominated development projects not integrated into any grand urban design.

A Combination of Crises, Rapid Change, and Stagnation According to crisis theory, the transition from socialism to capitalism leads through a series of crises. It comes first to a transformation crisis due to the establishment of the basic institutions of the free market system. The transformation crisis is followed, then, by a crisis of restructuring the social institutional structure inherited from the socialist period.114 The transformation includes the establishment of a market system, accompanied by radical changes in the ownership structure of the means of production as well as of real estate. By 1991, only two years after the regime change, the Hungarian Gross Domestic Product dropped to 85 % of its 1988 level,115 while consumer prices doubled in the same period.116 In the course of this crisis, in Hungary, as in most post-socialist countries, a new class of winners emerged, often called the ‘nouveau riches’. Despite the increase in social inequalities – relatively low in comparative terms117 but experienced as dramatic by the country’s population – the process 56

events, the mutual trust – already very low before the blockade – between the governing Christian-nationalist coalition and their left-liberal opposition (the latter taking sides with the protestors against the government attempt to break the blockade by force) sank to an all-time low. The absence of trust between the two sides, together with the right’s internal divisions on the transition to a capitalist market economy, undermined the consensus that would have been necessary for comprehensive structural reforms. The next episode occurred in 1995 when the left-liberal coalition government, elected in 1994, introduced an austerity package to stop the vicious cycle of budgetary deficit and high-rate inflation, threatening the collapse of the economy.119 The package included cuts in public expenditures and structural reforms in the public employment sector, in social and health care, and in pensions and education systems.120 Although (widespread dissatisfaction notwithstanding) the stabilization policies were carried out successfully, the wrong political lesson was learned: one better not mess with the inevitably unpopular structural reforms. This outline is based, to a large extent, on Iván Szelényi’s general account of the transition process in the region. Applying Szelényi’s account to the case of Hungary and Budapest, the sociologist Iván Tosics argues that the transition from socialism to capitalism lasted over a decade, and before reaching its end-state of a regulated market system, it went through an intermediate stage dominated by a more-or-less free market system.121 According to his thesis, in the analysis of the three periods within the last two decades, particular attention should be paid to the turning points between these phases. The first phase consisted in the establishment of a market-based economy through privatization and decentralization, representing the key transformation of the state-dominated, over-regulated, bureaucratic regime into a free-market system. Once this transformation was accomplished, efforts were concentrated to regain public control over the unregulated market processes by the introduction of new public policies and a reform of the institutional structure. According to the German-British sociologist Ralf Dahrendorf, ‘It will take six months to reform the political systems, six years to change the economic systems, and sixty years to affect a revolution in the peoples’ hearts and minds’;122 that is, in the dominant social norms of conduct. The inequality of the changes in these three domains is also visible in Budapest’s post-socialist development, and it is partly responsible for the syndrome of post-socialist urbanization. Whereas the political decentralization

Chapter 3  The Decentralization Narrative. Retroactive Urban Planning vis-à-vis New Local Governance and Property R ­ egimes

did not meet any substantial social resistance. The second crisis was brought about by the restructuring of the social institutional structure. The institutions inherited from socialist times had to be reformed. Generally, such reform crises are accompanied by social turmoil: The intelligentsia tries to preserve their social privileges while the poor protest as well, in response to the dismantling of the low standard but predictable social welfare system inherited from the communist times. The first decade of Hungary’s post-socialist history was marked by two major confrontational episodes. First, in October 1990, taxi drivers blocked the major roads and bridges in Budapest, outraged by the government’s decision to raise the price of petrol by 65 %.118 The move, dictated by a huge and increasing gap between the national and world market prices, was economically rational but its poor preparation and communication resulted in public outrage. As a most important political consequence of the

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and the introduction of a new regime of local governance took place in no time, and while the almost complete privatization of housing – a shocking change to the system of property – happened practically overnight; the modus operandi of urban planning took many years to become accommodated to the regulated market society. This delay was responsible for legal and institutional loopholes and economic tensions, putting private investors in an advantageous position in the first decade of the market economy. This narrative discusses the syndrome characterizing Budapest’s post-socialist urban development against the backdrop of this uneven development in power geometries, real estate property and planning regimes.

From the Soviet-Type Councils to ­Decentralized Municipalities The 1949 communist constitution regulated the councils’ operation by means of a separate chapter specifically devoted to them123, the details of which have been elaborated by the 1950 Law on Councils. These legal provisions imposed the state socialist regime’s strictly centralized, vertical hierarchy onto the system of public administration. They stated that local councils are both the state power’s local organs and agencies to represent workers’ interests. According to the Law on Councils, officials at all levels of the state in the Hungarian People’s Republic received their mandate from the working people. Their goals were supposedly also identical: serving the working people, building socialism in Hungary and raising the country’s level of development.124 Therefore, no conflicts of interest were supposed to exist between the higher and the lower levels of the hierarchy. The fact that the councils were not organizations of real local self-governance but mere arms of the centralized party state was explicitly stated by the law: ‘the supreme body of all local councils is the parliament and the Presidential Council of the People’s Republic.’125 The council system, due to its state-organizational characteristics, pressured subordinate entities to conform to the top-down instructions. This became an obstacle in the way of local aspirations.126 The nationally elected councils’ elbow room for decision-making was very limited, real political power having been concentrated in the hands of a more restricted and tightly controlled body; the Executive Committee.127 Simultaneously to these changes, on January 1, 1950, Greater Budapest was formed via the annexation of 23 settlements in the city’s southeastern agglomeration.128 According to Gábor Demszky, Budapest’s mayor between 1990 and 2010, the extension of the city’s administrative boundaries was not based on urban development considerations, but rather on reasons of a political nature.129 The communist leaders had hoped that the inclusion of these settlements with a population of predominantly industrial and agrarian workers would raise the share of ‘politically reliable classes’ in the population of the capital. The means necessary to deal with the backwardness of these satellites were – and remained – absent, and thus the areas absorbed into the metropolitan center failed to become integral parts of the city, maintaining their non-urban character. Parallel to the integration of Budapest’s local government into the newly established administrative hierarchy, district councils as units of local governance distinct 58

from – but subordinated to – the city government were created. The city council, in its turn, was awarded an administrative status on a par with that of county councils.130 Although amendments refined the scope of authority of the different council levels in 1954131, and a general relaxation of state centralization in 1971 brought with it a shift in the weight of the responsibilities of councils from serving as the extended arms of the central administration towards the provision of local services132, no genuine

Ripp points out, 134 the issue was not put on the agenda of the roundtable discussions between the outgoing communist government and the parties that formed what was called the ‘Opposition Roundtable’. In Ripp’s reading, while the opposition understood how important it was to transform the local power structures, it was of the view that the negotiations should focus on creating the conditions for free elections, and all the major legislative issues (including that of self-government) should be left open for the new, freely elected parliament to decide.135 The mandate of the councils elected in 1985 was due to run out on June 8, 1990. As the new legal regulations of municipal self-governance were not yet enacted, the parliament decided to extend it until September 23 of the same year.136 By this time, preparations for the new municipal regime were well under way. Imre Verebélyi, deputy to the minister of the Interior, was leading a pilot group comprising mainly lawyers and public administration specialists. Verebélyi himself was an advocate of effective, decentralized local governance based on the principle of subsidiarity. Because he had been known in the last years of the crumbling socialist regime as an advocate of democratization and decentralization, whereas after the regime change he was active as a modernizer, he commanded a certain respect both in expert circles and among politicians.137 Verebélyi admitted that refinements to the system of public administration in the 1970s and ‘80s were not sufficient for achieving what one would call genuine self-governance.138 The institutional structures necessary for such a model would have been incompatible with the centralized party state, and so they have never been created. His earlier ideas have nevertheless provided the basis of the preparations for the new post-socialist Law on Local Government139 that started in 1990. Having a general vision was not sufficient, however. Political consensus also had to be achieved for a law to pass the legislature. The Constitution ruled that the Law on Local Government has to be accepted by a supermajority, which the first democratic government failed to reach in the parliament). An agreement was reached that the Alliance of Free Democrats,140 the major opposition party, withdraw its own draft bill in exchange for incorporating its main provisions into the government’s bill as amendments. The principles of the new regime of local municipalities were laid down in August of 1990, in an amendment to the constitution.141 This stated that in villages, towns, the capital city and its districts, as well as in counties, local citizens are entitled to self-governance so that they can democratically manage matters affecting their community, and the local authority is exercised in their interest. The constitution guaranteed full autonomy for local governments. This took shape in the definition of the right to self-governance as a basic collective right and in granting the municipalities

Chapter 3  The Decentralization Narrative. Retroactive Urban Planning vis-à-vis New Local Governance and Property R ­ egimes

reforms were carried out until the systemic change in 1989–1990. Then, in return, the question of local self-governance became a particularly focal element of the emerging political discourse.133 The newly created opposition parties made the independence of local governments an integral part of their programs but, as the historian Zoltán

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freedom of organization, management, the forming of partnerships and the undertaking of tasks. The constitutional amendment granted equal status to all local governments, whatever the size of their population and the functions discharged by them. Both were to be defined by a substantive law.142 This law was enacted by the parliament on August 3, 1990 and came into effect on the day of the first free municipal elections, on September 30 of the same year. Its foundations were understood as a denial of the communist regime’s centralized hierarchy. It allowed each and every settlement to form its own local government, and delegated a broad range of public tasks and competences to these. The reform doubled the number of local municipalities and resulted in one of the lowest inhabitant-per-municipality ratios in Europe.143 As most municipalities were rather small (a third of them numbering under 500 and another third between 500 and 2,000 inhabitants144), they were not really suitable for complex tasks of administration and public service organization. Despite this, a dominant part of public services – such as managing elementary and secondary schools and maintaining most of the social and health care infrastructure as well as a handful of law enforcement tasks – were also delegated to local governments, including competences that had no local relevance whatsoever. Although the 1990 law granted the possibility of distributing authority depending on the size and character of the settlement, in practice tasks and competences were determined according to a general template. All in all, the reforms of 1990 represented an attempt to maximize decentralization while keeping efficiency at a still-acceptable minimum.145 It is often claimed that the system of local government became excessively fragmented, resulting in unacceptably low effectiveness.146 Decentralization also materialized in the changing relationship between city and county municipalities. In socialist Hungary, towns and villages were subordinated to the counties, with the latter giving binding instructions to them. After the regime change their relationship took the character of mutual co-ordination and their tasks and competences were defined as complementary. According to Verebélyi, the legislator’s intention was to allow most public matters to be dealt with on the urban level, and leave the counties to a mere subsidiary role.147 They, for example, were to provide such public services that cater for multiple towns, as in the case of higher-level health care or cultural institutions. Municipal autonomy included the right of local governments to decide how to spend their income – whether generated locally or received from the central budget. The municipalities’ financing was initially based on normative standards which, over time, were corrupted as a result of favoritism, lobbying, and vertical bargaining. Among other innovations, local governments received tax-levying powers. Even as the role of local taxation significantly grew over the years, by international standards it continued to cover only a relatively small proportion of the overall municipal budgets. This indicates that the financial foundations of municipal autonomy remained absent, making local governments highly dependent on central financial decisions.148 Furthermore, the decades following 1990 have seen a more-or-less constant tendency of central government reducing the provision of financial resources accompanied by central government delegating ever new tasks to the municipalities. For example, in 1991 the government cut the municipalities’ share of personal income taxes by 50 %. By 1994 this share was further decreased to 35 %. Demszky notes that 60

were party-independent, by 2010 this figure had dropped to under 2500.150 In reality, their proportion is even smaller as it has become a practice of parties, especially in smaller settlements, to support nominally independent candidates instead of making their people run under their party logos. To sum up: While the broad tendency of building a new system of local government on the basis of the principles of decentralization, subsidiarity, and autonomy was progressive indeed, the legal framework that came out of the attempt to carry out this aim was burdened by a number of deficiencies. Firstly, there was a serious discrepancy between the small average size of the municipalities and their wide scope of authority and autonomy. Secondly, the municipalities have been overwhelmed by public tasks both in absolute terms and in comparison to their financial capabilities. Furthermore, their autonomy, granted by the law, is restricted as most of their financing is channeled or redistributed through the central state budget which makes the local governments’ manoeverability dependent on governmental decisions. These tensions have resulted in serious efficiency deficits and have undercut the ideal of self-governance. As a contrast, the French and Scandinavian models can be mentioned.151 Whereas in France, every settlement has its own local government – the tasks of which are very limited, and which act and under strong central control – the Scandinavian model grants broad competence to municipalities that are, in return, relatively big. The Hungarian system of the 1990s, as described above, did not fit either of these models. Its hybrid character resulted in it being less effective than its French and Scandinavian counterparts. With these observations in mind, let’s take a closer look at how the excessive decentralization and the resulting controversies affected Budapest. Decentralization of Power in Budapest: The New Two-Tier Municipality The 1990 Law on Municipalities dedicated a separate chapter to the capital city.152 Most importantly, it stated that, due to the capital’s extraordinary role and peculiar situation, a separate law should regulate the functioning of its municipalities153 and this law had to be created by November 30, 1990.154 It also defined both the city government and the district governments as municipalities with substantive tasks and scopes of authority.155 Furthermore, as we have seen already, the constitution in force at the time provided for the equality of local municipalities’ constitutional powers and prerogatives, independently of the size of the community served by them and the level of complexity of their functions. These provisions implied a structure of local government in which the districts are not clearly subordinated to the capital – an issue to be heavily debated during the preparations for the Law on the Municipality of Budapest and its Districts.

Chapter 3  The Decentralization Narrative. Retroactive Urban Planning vis-à-vis New Local Governance and Property R ­ egimes

the state’s normative contribution also decreased in real terms by 15 % between 1991 and 1994, due to the high inflation rate.149 In the beginning, the level of local services was directly linked to the community’s revenue-producing ability. Later on, a redistributive regime was established which, as Demszky argues, was attractive in its aim to decrease territorial inequalities but resulted in a partial centralization of financial decision making and, in this way, progressively reduced the autonomy of local governments. Also conspicuous has been the growing influence of national party politics on local governance over the years. Whereas in 1990 over 3,000 mayors

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The country’s new right-wing government procrastinated over the preparations of the ‘Budapest Law’ in order to be able to adapt the law to the political power-geometries that were to emerge after the municipal elections due in September 1990. The Alliance of Free Democrats, the main opposition party, committed itself to a radical decentralization of local government powers in Budapest as in elsewhere, in the conviction that this is what democracy requires. János Kis, the party’s president at the time, remembers that the Free Democrats came to understand the risks of the original position they were campaigning for in the run-up to the elections only in hindsight, and this has cost them the ability to later argue against vesting the districts with undesirable autonomy with respect to issues requiring city-wide regulation.156 At the first free municipal elections, the Free Democrats won a very strong plurality in Budapest’s council and a clear majority in 17 of the then 22 districts.157 Their candidate, Gábor Demszky, was elected to become Budapest’s first post-socialist Mayor. The combination of the government’s attempt to weaken Budapest after its catastrophic defeat158 and a coalition of Free Democratic district mayors resisting the volte-face of their own party resulted in poor odds for the metropolitan government gaining sufficiently widespread powers. The only alternative vision was laid down by Fidesz (Alliance of Young Democrats); then a small left-liberal party. Their city-model proposed unifying the districts in Budapest’s inner ring under one organizational umbrella, while offering larger autonomy to the districts on the city’s fringes. Without sufficient support, however, this initiative was doomed to fail. The deepening conflict between city leaders and those of the districts can be exemplified by the disputes on subsidized housing and other social policies. As the sociologist János Zolnay pointed out in an article published in Beszélő, a leading liberal weekly at the time, the conflict between the city and the district governments exploded practically on the day after the municipal elections in the fall of 1990.159 Still without a proper law on the distribution of authority and responsibilities between the two levels of Budapest’s local governance, the metropolitan government made attempts to establish city-wide policies on social housing and homeless shelters. Most of the district mayors refused Demszky’s proposal to make each district responsible for taking care of the homeless and other needy people within their jurisdiction. Most of them campaigned in the elections with the promise of not opening homeless shelters in their neighborhoods, claiming that accommodating the homeless is a responsibility of the city government. Similarly, opinions clashed concerning the illegal occupation of empty houses. In a letter dated November 30, 1990, Demszky suggested that the districts, instead of evicting these settlers, should temporarily provide them with emergency housing from their social housing portfolios. The districts, however, were aiming to dispose of their illegal settlers; an easier way to get rid of the problem than refurbishing the practice of tenement allocation in force. They procrastinated with the compilation of new local name registers in order to avoid responsibility – or so Demszky argues.160 It was into this political climate that the debate on the law concerning Budapest’s local governance took off in the spring of 1991. In his March 15 speech, in front of a crowd celebrating the anniversary of the 1848 revolution, Demszky declared: ‘This city expects parliament to adopt a sensible law. I hope that the law will take both Western European experience of city governance and Budapest’s municipal traditions into 62

consideration. (…) I would like to make it clear, and I am doing this in the very interests of the citizens of the capital, that Budapest is one city, not twenty-two, not the mere aggregation of its districts. If it is taken apart, it will also fall apart.’161 The enemies of a strong city government ended up gaining the upper hand in this conflict. The law was enacted on July 10, 1991. It treated the city and its districts similarly in terms of the status of their respective governments. It transferred the city-council’s powers to the general assembly at the city level and to district assemblies at the district level. It required that the district assemblies should be represented in the

districts, unless another law explicitly delegates some of these to some other body.162 It left with the city all responsibilities and authorities in matters affecting the city as a whole, or most of its territories, and those that were related to the city’s special role as capital of the country.163 Evaluation: Emerging Issues and Conflicts Between the Two Tiers Conflicts of interest: Firstly, whereas in socialism the district and city councils were nothing but extended arms of the party-state, after 1990 they regained their autonomy and so their conflicts of interest came out into the open. This fact, combined with the shared – and at times even overlapping or conflicting – competences and the districts’ ‘not-in-my-backyard’ (NIMBY) attitude, resulted in some procrastination with respect to many development projects and put immense obstacles in the way of cohesive, metropolitan-scale strategies. Take the example of the Lágymányos bridge, built in 1995. As a part of the city’s major road infrastructure, the task of its planning and development was delegated to the city level. The districts affected by the project, however, had a significant influence on its execution. In his historiography of Budapest’s development, the urban planner Gábor Locsmándi describes the confusion around the street and public transportation connections of the proposed bridge.164 The first optional path, with a straight slip road and, accordingly, a quick connection to the westbound highways, met protests by local inhabitants and led to the 11th district municipality’s decision to reject the construction of any major road through areas that might potentially become valuable development land for housing projects. There were no instruments at hand the city government could have taken recourse to in order to negotiate a solution necessary for easing the center’s traffic load against the district’s aim of protecting the living environment. Enforcing the metropolitan interests was not an option either. Consequently, the bridge had to be built with a sharp turn in its ramp, a disadvantageous solution in terms of traffic engineering. Furthermore, the alternative tracing made the bridge’s connection to the highways less than optimal. This example illustrates the failure of the two-tier municipality’s regulations to allow the conflicts of interest between the different levels of governance to be negotiated.

Chapter 3  The Decentralization Narrative. Retroactive Urban Planning vis-à-vis New Local Governance and Property R ­ egimes

city’s general assembly by district delegates. The districts are headed by their mayors and vice-mayors; the city by the metropolitan mayor and his deputies. The municipal apparatuses are run by the district notaries and the town clerk respectively. As a key decision, the law rules that all municipal duties and competences should be held by the

63

Lack of clarity concerning monetary resources: Although, in accordance with the Law on State Finances165, the city and district municipalities have their own annual budgets, overlaps and a lack of clarity in terms of their tasks have resulted in substantial administrative puzzles, as most of their financial resources are dedicated directly to the fulfilling of specific public duties. An institution called ‘resource sharing’ was supposed to handle these difficulties. The idea was that the income tax that the law dedicates to local municipalities, the state provisions and dividends from the local governments’ own undertakings, should all come under the umbrella of a common fund. The districts resented the resource-sharing institution as it was seen by them as letting the city council have the final word, whereas the city felt that the law contributed to the undermining of its municipal powers.166 The Constitutional Court ruled in 2001 that the legislation’s imprecisions resulted in an unconstitutional situation, as the Law on Local Municipalities did not fix the exact methods of sharing financial resources between the city and its districts.167 As a response to the Court’s resolution, a new amendment to the Law on Municipalities introduced a normative method for sharing financial resources across municipalities and ruled that the details of this procedure must be regulated by a separate law.168 The practically equal status of self-government units at different levels within the two-tier municipal system, the conflicts of interest, and the lack of a proper regulation of authority have led to a culture of management and development based on aggressive promotion of institutional self-interest and an incapacity to cooperate. A study from the 2000s claims that Budapest’s districts acted as separate cities having county status, whereas the city was seen as a mere encumbrance of the districts’ self-governance.169 As evidence for this claim, the author discusses examples of disputes between the city government and the 7th district’s municipality. These disputes started over the intention of the district to increase the density of the old Jewish quarter’s population by allowing eight-story buildings to be erected as opposed to the three stories defined by the former regulation. The idea was promoted with the aim of maximizing district revenues, and the district authorities claimed the competence to decide the matter referring to the detailed building regulations. Believing that the increase in inhabitant density would result in the overwhelming of road and parking infrastructure, the city vetoed the project. It claimed to have a say as the Jewish quarter is part of UNESCO World Heritage, which puts the issue under metropolitan authority. Conspicuously, both sides were able to support their position with legal references. As evidence for the absence of a clear division of jurisdiction, both sides were able to marshal sound legal support for their respective claims. Lack of clarity in the division of authority and competence between the city and its districts resulted in permanent disputes that, in their turn, have become obstacles in the way of development. Inequalities among the districts enhanced by city level policies: Besides the conflicts between the city and its districts, the two-tier governance also resulted in enhanced inequalities among districts. As evidence for this claim I would refer to the municipal 64

system’s impact on Budapest’s post-socialist urban renewal programs. Rehabilitation was not part of local governments’ responsibilities in the 1990s and 2000s. The relevant legal material assigned the task of maintaining and developing public spaces in the city’s ownership to the city government, while the districts were only responsible for the public spaces and housing stock owned by them. As around 86 % of the real estate was already privately owned by the late 1990s,170 district rehabilitation would not have been possible without private involvement. This turned out to be a major issue at first, as the fragmented structure of private ownership resulted in both legal and finan-

As for the public authorities’ role in the maintenance and renewal of the building stock, the Housing Law of 1993 – besides transferring the ownership of formerly state-owned apartment blocks to the district municipalities and providing rules for their alienation – ordered that the income from privatization was to be set aside on a separate account and could only be used for specific public tasks, such as the expansion of the municipality’s housing portfolio through new construction or the purchase of apartments, the renewal of apartment blocks, urban renewal, and the covering of the local government’s mandatory shares in projects with EU – and state funding. Budapest’s city government established, accordingly, a central urban renewal fund in 1994173, with the districts being assigned the duty of depositing 50 % of their privatization income. It also required that districts be able to apply for financial subventions for their renewal programs from this fund. This redistributive regime was heavily criticized for benefiting districts with more advanced renewal programs and larger financial resources.174 The better off districts, such as the 5th, and the districts with more advanced renewal programs, such as the 9th, obtained disproportionately greater shares from the urban renewal fund than other parts of the city. Delegating the task of renewal to the districts while establishing a metropolitan redistributive regime for the partial financing of the renewal programs resulted in distortions in the city’s urban development. The city ended up not directing its financial resources towards the renewal tasks to which it otherwise gave priority.

The Introduction of a New Property Regime Contrary to widespread belief, the privatization of state-owned housing after 1990 was not a wholly unprecedented move; to some extent, it had already been made possible by the socialist regime in 1969, following the economic reforms of 1968.175 The government decree allowing for housing privatization awarded the territorially competent councils the right to designate properties for alienation176. Actually, only a few hundred (maximum one thousand) state-owned apartments were privatized per annum in the 1970s and 1980s in Budapest.

Chapter 3  The Decentralization Narrative. Retroactive Urban Planning vis-à-vis New Local Governance and Property R ­ egimes

cial obstacles in the way of development. Most homeowners lacked the political skills to negotiate with each other and to reach agreements, and their monetary resources were grossly insufficient for covering the renewal of their blocks. The Condominium Act of 2003171 brought the first major change in this regard, as it provided precise regulation for how condominiums should be established and maintained. It also ruled on the establishment of renewal funds and regulated the ways these could be used.172

65

More importantly, the construction of private apartments and single-family houses was made possible, and approximately 100,000 such units were erected in Budapest between 1961 and 1980; almost twice the target number of 54,000.177 Single-family houses were often built through unpaid voluntary co-operative workers based on reciprocity between extended family members, friends, neighbors and workmates. Construction of condominiums was also legally facilitated, and supported by long-term mortgages from the National Savings Bank (OTP). Such acts of liberalization were motivated mainly by the state’s inability to provide new homes in sufficient numbers,178 which led the authorities to look for ways of outsourcing parts of this task while still maintaining control over most of the real estate, especially in central urban areas. Even if privatization was not an unknown phenomenon in the decades before the regime change, this tendency only took off massively after it. While a mere 1,600 apartments were sold to private individuals in 1988 in Budapest, the figure more than tripled in 1989 to 5,600, and further quadrupled in 1990, when 22,200 units were privatized.

179 Between 1988 and 1996, the number of new private apartments in Budapest reached 289,200, while by 1997 the number of municipally owned tenements had shrunk to 114,200, a mere 14 % of the city’s total housing stock. In contrast, 395,800 apartments were publicly owned in 1990; almost 50 % of the total stock in the capital city.180 It is important to note that the alienation of publicly-owned tenements continued after its first grand wave in 1990, leaving the district municipalities as owners of a mere 5 percent of Budapest’s housing stock by 2011.181 The sociologist János Zolnay argues that the rising housing tensions in the 1990s were not a direct consequence of the 1969 decree; they were mainly due to the exponential acceleration of apartment privatization after the regime change.182 While economists were divided on whether the massive alienation of tenements was a rational move from an economic point of view,183 according to Zolnay the process has rapidly become irreversible for political reasons. Tenants, fearful that the transition to a market economy would bring with it substantial rent increases as well as an end of the regulation in force that made it by and large impossible for the owner to unilaterally dissolve a tenement contract, demonstrated a strong interest in buying the apartment where they were living, while those not having a tenant’s position had no means to promote their interests. Arresting the process or introducing stricter conditions would have had high political costs. Thus, neither the state nor the local governments were in a position to deal with the legacy of real estate privatization. To illustrate this difficulty, Zolnay recalls the fiasco of a proposal to the government in fall 1990, suggesting the suspension of privatization by repealing the 1969 decree.184 As much as such a legal tabula rasa would have sounded reasonable, the right-wing government declined this unpopular measure after its serious defeat at the municipal elections. It instead made a commitment to submit a new housing law by April 1991. Failing to fulfill its promise in due time, it put pressure on the local governments. In the meantime, the city government’s project of creating a Budapest-wide conception on the management of municipal real estate portfolios, on the social obligations of the city and on urban development met strong resistance on the part of the districts. Arrangements for a municipal decree on privatization were also blocked by uncertainties regarding the law on Budapest’s local governance, still in preparation at the time. The metropolitan assembly enacted a decree185 on June 27, 1991 – officially as 66

an amendment of a 1989 Council Decree – which had set the conditions for privatization of the apartments in the management of Budapest’s Real Estate Administration Company (IKV).186 The decree took the properties’ physical condition and their potential market value as a basis for setting the purchasing price. It made the inventory and value assessment of the real estate portfolios a responsibility of district municipalities, the owners of the housing estates. In order to understand the circumstances under which the new decree was enacted, one has to recall the fact that parliament adopted the Law on Local Governments of the Capital City and its Districts187 on June 12, 1991, but the law did not come into effect until a month later, on July 10. To close the legal loophole, the government attacked Budapest’s Decree at the Constitutional Court.

Conflicts and contradictions between legal regulations at different levels resulted in an incoherent legal situation, each party referring to laws and decrees favorable to their interests. On the one hand, the 1990 Law on Local Municipalities,189 affirmed and concretized by the 1991 Law on Transferring Ownership of State Assets to Local Munici­ palities,190 transferred the ownership of formerly state-owned assets to local governments. On the other hand, old, anachronistic government decrees also remained in effect and contradicted the new, higher-level laws.191 As Zolnay argues, these decrees, inherited from a centralized socialist party state, undermined the sovereignty of local governments. Municipal leaders – most importantly Gábor Demszky – claimed that an issue as crucial as the administration of housing estates should not be regulated by lower level decrees but by a law.192 In the meantime, district municipalities went on to criticize the Budapest Decree on privatization not for its actual content but for interfering with a competence that the 1991 Budapest Law had delegated to the districts by stating that they independently exercise municipal scopes of authority. Thus, they claimed that the decree was in conflict with higher level legal regulations. These legal inconsistencies, together with the Budapest Law’s tendency to incapacitate city-wide policy-making, ended up severely limiting the city’s efforts to elaborate a unified housing policy. This impasse could not be overcome before the long-due Housing Law was finally enacted by parliament in summer 1993.193 This act granted tenants pre-emptive right to their rented apartments, extending that right to their close relatives, and ordered the municipalities to define the purchasing price in a way that fell between the range of three years’ rent of the property as a minimum and the property’s market value as a maximum.194 The Alliance of Local Municipalities soon appealed to the Constitutional Court, claiming that their proprietary rights were violated by the law.195 The Court, however, ruled that the ownership rights awarded to the municipalities by the 1991 law came with a burden of alienation.196 This put an end to a long dispute and gave free reign to the continuation of the housing stock’s almost complete privatization, most of which was passed off within the following few years. First, apartments with a higher market value were alienated, as data published in 1994 by the Hungarian Central Statistical Office suggested. According to this data, whereas Budapest’s districts alienated approximately 50 % of their housing stocks between 1990 and 1995, their real estate portfolios shrunk to a sixth of their original value in the same period.197 The economist Zsuzsa Dániel points out that there was not simply a huge gap between the apartments’ actual market value and their

Chapter 3  The Decentralization Narrative. Retroactive Urban Planning vis-à-vis New Local Governance and Property R ­ egimes

This move marked the beginning of year-long disputes concerning not just the disposal right over real estate assets but also on the sovereignty of local governance.188

67

Fig. 28. The uneconomical privatization gift: untended housing from different eras in Budapest's 8th district.

purchasing price.198 Her calculations, based on official statistical data, demonstrate that the value of the state’s ‘privatization gift’ grew exponentially with the growing value of the apartments: the bigger and better equipped the apartment, the bigger the gift – she claims (Fig. 29.). She then goes on to add that, given the high renovation costs, the poorer tenants living in houses in a degraded state even lost out financially on the transaction and many of them ended up in a dead end, unable to stop their new properties’ further deterioration.

AVERAGES IN EACH APARTMENT VALUE GROUP LOW (NOT alienated)

MEDIUM ( alienated)

HIGH ( alienated)

Apartment value in thousands of ­forints

553.8

1156.9

2392.8

Apartment size in square meters

37.4

52.4

77.9

Apartment surface per inhabitant

-

20.3

26.5

Purchase price in thousands of forints

-

264.9

495.8

Renovation costs in thousands of ­forints

-

217.3

407.7

Net rent yield in thousands of forints

-

2499.3

4055.7

‘Privatization gift’ in thousands of ­forints

-

2022.3

3160.6

How many years of income is donated?

-

10.1

12.8

Fig. 29. Costs and acquisitions concerning apartment privatization, in: Zsuzsa Dániel, ‘A bérlakás-privatizáció paradoxona. Nemzeti ajándék vagy ráfizetés?’ Közgazdasági Szemle 63 (March 1996), 204–230 (211).

All in all, in the 1990s Budapest’s local governments ended up alienating approximately 85 % of dwellings in their ownership after the adoption of the 1991 Law on Transferring Ownership of State Assets to Local Municipalities. Besides the political aim of offering the residents ownership, expressed by the 1993 Law on Housing, local governments were also motivated to sell their housing stock for economic reasons. They hoped to decrease maintenance and renovation costs through the minimization of their real estate portfolios, while generating income through alienation for financing their tasks concerning the assets they continued to possess. Furthermore, they aimed at decreasing their social responsibilities by getting rid of potential social housing stocks. However, as Dániel’s study pointed out, when evaluating how successful they were in achieving these goals, one has to consider the fact that at the end of the day the municipalities were left with the worst bits of their real estate portfolios.199 Zsuzsa Dániel’s study examines a further aspect of massive alienation: while most new homeowners had received large gifts from the state in the form of highly subsidized purchasing prices, they were often disappointed and claimed to have some grievances. She coined the term ‘tenement-privatization’s paradox’200 for this phenomenon and explained it by the gap between many homeowners’ financial means and the maintenance and renovation costs their newly acquired apartments would have required. She arranged all dwelling expenses in a chart (Fig. 30.) and pointed out that households in the third column faced unbearable burdens after having bought their former tenements. Though possessing apartments of an average size comparable to those in the second column, the owners’ income here is about 50 % less, causing the 70

became financially untenable. Dániel concludes that, while this group received a ‘privatization gift’ comparable to those in the chart’s second column (see the next to last row in Fig. 30), they psychologically did not perceive the newly acquired ownership as a benefit but rather as a burden.201 She claims that the households in this column could realize the ‘potential gift’ they had received only by selling their apartments at market prices and moving to smaller, less well-equipped apartments that matched their real incomes. Alienation of privatized apartments did indeed happen in large numbers in the second half of the 1990s, contributing to the massive suburbanization of the period, as many new homeowners decided to buy or build single-family houses in Budapest’s agglomeration after having sold their unsustainable apartments. AVERAGE DWELLING EXPENSE / INCOME RATIOS AFTER PRIVATIZATION LOW (not alienated)

MEDIUM (alienated)

HIGH (alienated)

Apartment size in square meters

37.4

56.5

60.7

Apartment surface per inhabitant

19.2

18.0

34.3

Household income in thousands of forints

138.2

250.7

120.3

Gross rent in thousands of forints / apt.

6.2

13.4

11.4

Gross rent / income ratio in percent

4.5

5.3

9.5

How many years of income is donated?

-

10.1

12.8

10 % of price in thousands of forints / apt.

-

31.1

36.9

Renovation costs in thousands of forints / apt.

-

252.2

282.6

Total one-time expenses

-

283.3

319.4

Mortgage redemption in thousands of forints

-

13.0

15.3

Common costs (condominium) in th. fts.

-

36.4

40.8

Total annual expenses

-

49.3

56.1

One-time expenses / income ratio in percent

-

112.9

301.5

Annual expenses / income ratio in percent

-

19.1

49.6

Annual privatization yield in thousands of forints

-

145.2

140.3

Yield / income ratio in percent

-

59.3

139.5

DWELLING COSTS PRIOR TO PRIVATIZATION

ONE-TIME EXPENSES AFTER PRIVATIZATION

CONTINUOUS ANNUAL EXPENSES AFTER PRIVATIZATION

EVALUATION OF DWELLING EXPENSE / INCOME RATIOS

Fig. 30. Dwelling expenses in the tenement sector before and after apartment privatization, in: Zsuzsa Dániel, ‘A bérlakás-privatizáció paradoxona. Nemzeti ajándék vagy ráfizetés?’ Közgazdasági Szemle 63 (March 1996), 204–230 (213).

Chapter 3  The Decentralization Narrative. Retroactive Urban Planning vis-à-vis New Local Governance and Property R ­ egimes

ratio of their housing costs and incomes to boost to almost 50 %. While due to subsidized rents and utility costs these same households could earlier afford living in relatively large apartments (the average surface per resident being 34.3 square meters compared to 18 in the second group), under market conditions this level of demand

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Dániel’s results are confirmed by empirical studies by the sociologist Gábor Csanádi and his colleagues. They discuss three types of residential suburbanization in the 1990s.202 First, members of the upper classes acquired apartments in highly valued residential areas, and could mobilize additional savings as well, which allowed them to move to prestigious suburban neighborhoods in the western, and later in the northeastern, agglomeration of Budapest. Second, most middle and lower-middle class families, many of whom lived in neighborhoods of a residential status below that of their social status, inhabited apartments that had been revalorized by privatization and had access to family savings to complement the price at which they could sell their newly acquired property. Geographically, their movement targeted more remote areas of the agglomeration of low to medium residential status, yet still closer to their social position. This second type of suburbanization process had severe negative effects on the areas abandoned by members of the middle and lower-middle classes since it contributed to slum formations in the areas of origin203 abandoned by them.204 The third major type of suburbanization identified by Csanádi and his co-authors consisted in families whose status, rather than getting lifted up, deteriorated as a result of housing privatization, moving out of their neighborhood of origin. These were poor people escaping from the trap of financial burdens beyond their capacities. They were leaving Budapest’s metropolitan region, most of them returning to settlements in distant, underdeveloped regions of the country from where they had moved to Budapest or its vicinity in the decades of socialist industrialization. They often had relatives to join or returned to their own houses, abandoned decades earlier.205 These three distinct trends together resulted in Budapest losing almost 15 percent of its population in the first 10 years after the regime change, while its agglomeration experienced immense population – and consequently territorial – growth (Fig. 31.).206 This demographic shift had major consequences both for the central and the peripheral areas. The center was undergoing a process of spatial segregation and intensified slum formation, while the periphery was experiencing a continuous extension of residential neighborhoods at the expense of green areas, and found its infrastructure overwhelmed by the rapidly increased demand. In order to better understand the structure of suburbanization and the role housing privatization played in it, Csanádi and his colleagues analyzed the migration’s composition in each of Budapest’s districts, and pointed out that privatization was an important motivating factor, both in expanding the opportunities for mobility for the better-off, and by reducing the capacity to stay for the worse-off.207 They pointed out that all downtown districts had lost population in the first decade after the regime change. The range of the loss was between 10 to 35 percent but the causes behind the general tendency were highly complex, and they varied from district to district.208 Furthermore, there is empirical evidence that the rate of migration had risen significantly in the 1990s as compared to the years before.209 The social and market research firm Szonda Ipsos conducted a survey in the years between 1996 and 1998 on the motivations and status of those leaving Budapest for its agglomeration (Fig. 31.).210

72

0

5 km

EDUCATION

MOVED WITHIN ­B UDAPEST

MOVED TO THE ­A GGLOMERATION

MOVED ELSEWHERE

ADULTS IN ­B UDAPEST ­A LTOGETHER

Less than 8 years

4.5

2.4

7.2

7.2

8 years

14.3

14.0

29.1

19.3

Skilled labor school

18.5

20.5

25.3

18.5

High school

36.7

34.4

20.7

34.5

College or university

25.9

28.7

17.6

20.6

ALTOGETHER

100.0

100.0

100.0

100.0

Fig. 31. Settlement expansion in Budapest between 1990 and 2010 (top) and the social composition of the ­agglomeration's newcomers between 1990 and 1997 (bottom).

Chapter 3  The Decentralization Narrative. Retroactive Urban Planning vis-à-vis New Local Governance and Property R ­ egimes

Built-up Settlement Surface in 1990

Expansion and Suburbanization 1990-2010

73

The fact that the ratio of those with higher education is comparably higher than Budapest’s average in both the group of those who moved within Budapest and those who moved to the agglomeration seems to confirm two theses. Firstly, those with higher education had higher mobility opportunities due to their better social and financial status, and this initial advantage was further increased by the fact that their apartments usually had better residential status than those inhabited by people with lower education. Secondly, the outflow of high status inhabitants to the agglomeration complemented their internal migration to Budapest’s higher status areas. The fact that within the group that moved beyond the metropolitan area the ratio of those with lower education is higher, while that of those with higher education is lower than their share in Budapest’s population confirms Csanádi and his team’s hypothesis that a considerable proportion of Budapest’s needy population moved to Hungary’s more remote areas, partly as a consequence of housing privatization.211 The massive and ‘overnight’ alienation of housing after the regime change was driven by the aim of awarding citizens assets and increasing their residential mobility via ownership, and was justified as an act of democratic reparation of the nationalization of real estate by the communist regime. However, while many benefited by becoming homeowners at highly subsidized rates, privatization had a number of negative unintended consequences – both social and spatial. As for its social effects, privatization benefited the better-off, while the high-maintenance costs of newly acquired apartments entrapped a significant group of city-dwellers who lived in tenements with a residential status they could not afford given their social situation. Many of them were forced to leave Budapest or even its agglomeration. The outflow of the relatively better-off from lower status urban areas resulted in enhanced spatial segregation and slum formation in the city’s second belt. Massive suburbanization also involved a gentrification of many townships in Budapest’s metropolitan area, crowding out some of the initial population and overwhelming the local infrastructure. Finally, the fact that the public authorities have lost around 90 percent of their housing stock in Budapest in the first two decades after the regime change, leaving them with the ownership of a mere 5 percent, substantially reduced their strategic ability to provide social infrastructure and control housing renewal programs.

74

Fig. 33. (next page). Timeline of relevant legislative, and urban planning regulations between 1990 and 2010. The chart comprises regulations related to the decentralization of the municipal regime, the alienation of state property, and the slow adaptation of urban planning’s modus operandi to the conditions of the free market.

Chapter 3  The Decentralization Narrative. Retroactive Urban Planning vis-à-vis New Local Governance and Property R ­ egimes

Fig. 32. Deterioration in the city’s second belt enhanced by the outflow of the middle-class. A building awaiting its long due renewal in the 9th district in 2010.

75

General Urban Plans of Bud. Other Regulatory Plans (Bud.) District Regulatory Plans Local Orders of the Districts District Renewal Programs National Laws

1990

Government Decrees

25.03.1990 First Free Parliamentary Elections

30.09.1990 First Free Municipal Elections

LXV/1990 (August 3) Law on Local Municipalities XXIV/1991 (June 12) Law on the Municipality of Budapest and its Districts

mid-1980s Withdrawal of State Subsidies from Prefab Housing

5/1989 (August 31) Decree on the Alienation-Ban of Specific Public Housing

LXXVIII/1993 (July 30) Housing Law

2000

1990-2010 left-liberal mayor in Budapest (Gábor Demszky)

2005

LXIV/2005 (June 28) Agglomeration Development Act L/2006 (February 13) Law on Amendments to the 1997 Building Law

2010

2006-2010 socialistliberal government

76

91/1999 (June 23.) Decree on a Subsidized Home Creation Program

LXXVIII/ 1997 (July 24) Building Law

1995 Governmental decisions in preparation for a regional plan 253/1997 (Dec.20) Decree on the Requirements of Settlement Development and Building (OTÉK)

XXVI/2003 (May 13) Law on the National Settlement Structure Plan

2002-2006 socialistliberal government

25.04.2010 Victory of Fidesz at the parliamentary elections

LXX/1994 (November 8) Law on withdrawal from hosting the 1996 EXPO XXI/1996 (April 5) Settlement Development Act

1994-1998 socialistliberal government

1998-2002 Christiannationalist government

1027/1986 (May 22) Decree on transferring the right of enacting urban plans to the city council

XXXIII/1991 (August 2) Law on Passing Certain State Assets to Local Municipalities

1995

1990-1994 Christiannationalist government

32/1969 (September 30) Decree on the Alienation of State-Owned Tenements

slowly adapting urban planning regime

Relevant City Level Studies

new property regime

Renewal Programs of Bud.

new, decentralized municipal regime

Orders of the City Council

04.10.2010 Fidesz wins in Budapest and gives its new mayor

2010 Budapest Tomorrow and after Tomorrow Concept Program

97/2005 (Dec.25) Decree on the National Spatial Development Concept (OTK)

218/2009 (Oct.6) Decree on Regulations Concerning Urban Planning

1983 Launching a Soft Renewal Program in the 9th district

1989 Detailed Development Plan of the 8th District

1991 Area Development Plan for the 96 EXPO 1:50000

1992 Study of Budapest’s surroundings

(1989-)1997 -ongoing Renewal Programs of the 8th district

1997 Liquidation of the state-run planning bureau BUVÁTI 48/1998 (October 15) Plan for Budapest‘s Settlement Structure and its Zoning

2003 Application for the Cultural Capital of Europe 2010

410/2003 (March 27) Urban Development Concept of Budapest

2004-2006 I love Budapest Initiative Development Concept

1451/2005 (June 29.) Medium-term Urban Development Program of Budapest

June 2007 Spatial Development Concept and Strategic Program of Budapest’s Agglomeration

155/2007 (February 15) Heart of Budapest Program 2007-2013

47/1998 (October 15) Harmony Order on the relationship between different plans and regulations

1997 Settlement Structure Plan (TSZT) 1:50000

1998 Zoning and Framework Plan (FSZKT) 1:50000

1997 Urban Renewal Program of Budapest

46/1997 (Dec.29) Renewal Order on methods and financing of urban rehabilitation

2002 Urban Renewal Program of Budapest

1125/2005 (May 25) Plan for Budapest‘s Settlement Structure 1096/2006 (June 29) Changed mediumterm Urban Development (Podmaniczky) Program of Budapest 2133/2008 (Dec. 18) Budapest‘s Integrated Urban Development Strategy

2005 Settlement Structure Plan (TSZT) 1:50000

2005 Structural Regulatory Plan Agglo 1:50000

1992 Founding of SEM–IX. Corp. and definition of the 9th district‘s renewal program

(1978-)1992 -ongoing Renewal Programs of the 7th and 9th districts

1997 Founding of the RÉV8 Corporation

1998 Urban Renewal Program of the 8th district

1998 Designation of an action zone for renewal in the 7th district

2001 Local Order on the designation of an urban renewal territory 2002 District Development Concept of the 8th district

2002 Regulation of the Inner 9th District‘s Renwal

2005 Local Order on the Frame Contract of the Corvin Quarter

2005-2010 Corvin-Quarter (Phase 1) District Municipality with Futureal Group Integrated into the District‘s Renewal Strategy

2007 Regulation of the Inner 7th District‘s Renewal

Chapter 3  The Decentralization Narrative. Retroactive Urban Planning vis-à-vis New Local Governance and Property R ­ egimes

urban renewal

1989-1991 Planning Concepts for the 95 EXPO

1986 Renewal Concept for Budapest‘s Inner Districts (app. 1000 blocks)

1988 General Urban Plan (ÁRT) 1:50000

77/1989 (June 20) Council Decree on Budapest‘s General Urban Plan

1978 Experimental urban renewal program in the 7th district (first in Budapest)

77

The Persistence of Socialism’s Spatial ­Planning Regime This section discusses the lagging transformation of Budapest’s spatial planning and attempts to explain both its causes and effects within the framework of rapid and excessive post-socialist decentralization of resources and authority. The decentralization of spatial planning had already taken its first steps before the regime change. A 1986 Decree of the Council of Ministers delegated the enacting of General Urban Plans from the central government to the city councils.212 This trend accelerated after 1989–1990, following the decentralization of local governance. As a highly significant part of this process, Budapest’s districts made headway in terms of authority and competence over urban planning. As can be read from the timeline on the previous page (Fig. 33.), the changes in the modes and instruments of spatial planning within the period between 1990 and 2010 can be subdivided into three intervals. In the first seven years following the regime change, laws and regulations inherited from socialism remained in force. These were decisive years, as transformations of the economic and political system took place that had a major impact on the production of space, while the regime for spatial planning and regulation remained unchanged. The momentous changes I am considering consisted in an almost complete privatization of housing, alienation of development land, and the appearance of the first large investor projects in Budapest – as discussed in earlier pages of this book. In this period, the large-scale state projects shaping the growth of the socialist city were replaced by innumerable low-level space appropriations, incremental in their dimensions and difficult to control, particularly in a climate dominated by the social imperative for deregulation and market liberalization. To make things even more difficult, as the planner and theorist Kiril Stanilov points out, the 1990s saw the influx into the arena of urban planning of a number of new players who challenged the prerogatives previously enjoyed by planners in matters related to the distribution of space.213 In other words, while competences concerning the details of spatial planning had been delegated to lower levels in the last years of socialism, strategic planning remained concentrated at the highest echelons of political power, and planners were still called upon to determine how the defined goals would be incorporated in urban space. With the post-socialist delegation of decision-making to local authorities on matters concerning urban development, the old-style symbiosis of political and professional decision-making was discontinued. Local politicians began to see urban planning as a cumbersome process limiting their ability to respond flexibly to the ‘opportunities of the moment’. The second period commenced with the introduction of a new Building Law in 1997 214, and the publication of the first post-socialist General Urban Plan215 for Budapest. The Building Law provided for three settlement planning instruments: The Settlement Structure Plans, the Regulation Plans, and the Local Building Regulations. Whereas the first was supposed to determine the spatial directions of a settlement’s long-term development, the second and the third were meant to jointly regulate the actual building activities within it. Both the Settlement Structure Plans and the Local 78

Building Regulations had been foreseen by the law to be enacted by the local councils in the form of decrees. In Budapest, the city had been given the authority to decide about the Settlement Structure Plan, while the regulative authority has been delegated to the districts. The law ruled, furthermore, that the Settlement Structure Plans as well as the instruments of regulation should conform with the higher-level plans, i.e. the National and Regional Structure Plans. These, in their turn, were expected to determine the main infrastructural developments and the major categories of land use. What is striking, and will be discussed in the following pages, is that the modus ope-

sion to the European Union in 2004. A new National Settlement Structure Plan was issued as a law;216 an Agglomeration Development Act217 was enacted for regulating the relationship between the developments in Budapest and its metropolitan region; and Budapest’s new Settlement Structure Plan,218 the first urban plan in accordance with requirements of the 1997 Building Law, was adopted. Finally, the translation of the SSP into a medium-term Urban Development Program, the so called Podmaniczky Program,219 came into effect. As another important novelty of the 2000s, Integrated Urban Development Strategies (IUDSs) made their appearance as complex long-term strategies, involving all the relevant domains. This was required by the European Union as a precondition for settlements to become eligible for its urban renewal funds. The IUDS’s methodological and substantive requirements were jointly circumscribed by the Ministry of Local Government and Regional Development and the National Development Agency in November, 2007. A year thereafter, the first IUDS of Budapest was formulated and enacted by the City Council.220 Another year later, in an attempt to adjust the Hungarian settlement planning to the European Commission’s directives, a Government Decree was issued on the norms and substantive criteria of settlement development strategies.221 Consequently, one can assert that by 2010, the end of the time period under investigation by this book, the spatial planning regime in Budapest became fully harmonized with EU norms and its current form took shape, putting an end to two long decades of spatial planning being transformed. The First Period (1990–1998): Socialist Regulation and ‘Wild’ Capitalism The last General Urban Plan of Budapest still enacted under the socialist regime was made a mere year before the beginning of the regime change.222 It remained in force between 1989 and 1998. Although it was slightly altered and updated from time to time, its structure and major content remained unchanged. It foresaw a population decrease of 80,000 over the following 15 years, and anticipated – in accordance with the 7th Five Year Plan – the construction of about 10,000 new dwellings by 1995. 6,000 of these were supposed to be built in mass housing neighborhoods, while the building of another 4,000 was foreseen as densification projects within downtown renewal areas. In terms of infrastructure, the expansion of the metro network, as well

Chapter 3  The Decentralization Narrative. Retroactive Urban Planning vis-à-vis New Local Governance and Property R ­ egimes

randi of planning and the hierarchy of its different instruments remained largely unadjusted either to the changed circumstances of the economy and the real estate market, or to the fact that conflicts of interest between different levels of public authority – the national government, Budapest’s agglomeration, the city, and the districts – became more open. It was not until the mid-2000s, a decade and a half into the new political regime, that this adjustment finally took place, mostly catalyzed by Hungary’s acces-

79

as the construction of a highway ring around the city and of two new bridges over the Danube – both in the south – were focal elements of the plan. Furthermore, the GUP foresaw infrastructural improvements in the industrial areas already in existence, rather than providing for a further expansion of the territories in industrial land-use. Its two main promises remained unrealized: neither was the fourth (northeast-southwest) metro line built, nor was the state’s mass housing program continued. The city’s renewal programs were also lagging behind, leaving most of Budapest’s neighborhoods in its second urban ring in a degraded shape. Not only was it the case that the authorities had been prevented by the collapse of the socialist economy from fulfilling the goals set by the last pre-transition GUP, the context of urban development had also been dramatically changed by the transition to democracy and capitalist market economy. Resources and decision-making competences were decentralized, land value and a real estate market were introduced, and an original accumulation of capital in private hands was taking place. As discussed in the previous section, the privatization of housing induced a migration process, leading to enhanced spatial segregation and, most importantly, to massive suburbanization – a process in which Budapest lost around 15 % of its population between 1990 and 2000.223 While preparations for a new General Urban Plan commenced soon after the regime change, urban development outpaced its planning, turning it retroactive, and thus dysfunctional. The replacement of the centrally planned economy by a market-based economic system made it much more difficult to plan where developments within the city were going to take place, as these were mostly driven by market demand rather than state supply. Consequently, developments foreseen by the 1989 GUP failed to come about while non-planned developments took off at an accelerated pace in areas outside of the scope of the plan; for example by former industrial facilities finding new functions in central urban areas. As the districts were financially interested in securing large private developments on their territories, they used their regulatory powers only to the extent of determining whether the new projects fit architecturally to their contexts, but hardly ever questioned their legitimacy or the choice of their location. As a result, planning of land use and structure of centralities on a metropolitan scale was to become a burdensome or plainly unfeasible task. This period is often characterized as an era of ‘wild capitalism’, meaning that the original accumulation of private property and the rise of a market economy were proceeding spontaneously, without proper regulation either as to who could access economic assets under privatization (and how); or whether vulnerable social groups enjoyed sufficient protection against the adverse effects of the economic transformation. The lack of an adequate regulation also left its mark on the built environment.224 Investment by foreign and multinational firms was going on at an increasing pace.225 Some invested directly in real estate, while others got involved via land and real estate owned by the companies they purchased during the first large privatization wave in the production and service sectors. Not only was the regime of urban planning unable to fulfill its duty under these rapidly changing circumstances, but loopholes have characterized the legal regulations in other domains as well. The weaknesses in the regulation had cumulative effects. For example, lack of proper normative regulation on taxation added value in the case of land, and real estate was a notable factor distorting the impact on the city’s deals with private developers 80

Dense urban block structure Loose urban block structure

Single family house neighborhoods Institutional land use Industrial land use Holiday resorts

Agricultural land use

Urban parks Forests 0

5 km

Fig. 34. Land-use and settlement structure plan of Budapest’s 1988 General Urban Plan.

and detrimental to their transparency.226 In many cases, development areas have been sold first and their zoning categorization was changed afterwards. This resulted in added value that the state or the city never benefited from and, in an indirect way, it meant that land in such cases was being sold way under its potential market value. Furthermore, the city’s urban planning department suffered serious cutbacks, due mainly to the insufficiency of financial resources. Prior to the regime change, the Budapest Institute of Urban Planning and Research (abbreviated as BUVÁTI in Hungarian) had been a huge state-held institution with around 600–700 employees, working directly for the state and the local councils. Under market conditions, BUVÁTI became unsustainable and was finally liquidated in 1997. The same year, Budapest’s city municipality founded the Budapest Urban Development Planning Ltd. (BFVT), a firm employing around 40–50 persons.227 The city continues to own BFVT and to commission it 81

with the most important urban planning tasks; for example, the preparation of revisions to the Settlement Structure Plan. However, planning tasks are getting increasingly outsourced to private firms, especially by the districts which, in cases where they want to entrust their planning tasks to BFVT, are required to pay market fees. The replacement of BUVÁTI with a much smaller unit had weakened the city government, leaving it with an unreasonably small planning department. Furthermore, the outsourcing of planning tasks led to conflicts of interest in the case of many projects.228 The Second Period (1998–2005): Retroactive Urban Planning As the General Urban Plan is updated more or less once in a decade, its first post-socialist version was not adopted before seven or eight years into the market economy.229 Furthermore, the publication of the new GUP on January 16, 1997 preceded by a couple of months the enacting of a new Building Law which determined the means of spatial planning and building regulation.230 This sequencing proved to be fatal since the Building Law adjusted the modus operandi of settlement planning, replacing the GUP with the Settlement Structure Plan (SSP) and delegating some of the tasks of the former GUPs to the district-level Structure Plans. More precisely, the new law defined the SSP as ‘a plan ensuring the achievement of the settlement development concept’s objectives, and arranging the settlement’s structure, its dominant land use, and the layout of its technical infrastructure networks.’231 It resolved that District Structure Plans (the equivalent of former Detailed Development Plans) are to be prepared by the districts of the capital. This was a major change with respect to the Building Law dated from 1964 which allocated the task of giving guidance to the planned development of towns and cities to General Urban Plans and resolved that, according to need, Detailed Development Plans may also be prepared.232 As István Schneller recalls, there were vivid disputes in the 1990s about the decentralization of urban planning. He claims that even delegating zoning rights to the districts was considered but ultimately abandoned.233 This competence stayed with the city in the form of the General Regulatory Framework Plan. Districts can define further specifications in their Regulatory Plans, although these were supposed to be in conformity with the city’s Framework Plan. The first Settlement Structure Plan adopted in full accordance with the 1997 Building Law was not enacted before May 2005.234 The change in the legal environment forced the city government to convert the GUP of 1997 into an SSP one year after its preparation.235 The SSP was adopted under bad auspices. Drastic changes introduced in the legal environment by the new Building Law and the accompanying Decree on the Requirements of Settlement Development and Building,236 massive privatization of housing in the mid-1990s, and the first wave of alienation of large development areas to private developers converged in their effects to dramatically reduce the capacity of the plan to properly steer the city’s urban development. Besides being overtaken by the actual development, the plan was not in full compliance with either the Law or with the Decree on Building, notwithstanding of the fact of its adoption following their enactment. It used old terminology and methods in distinguishing between zones where building was permitted from zones where it was not, and it failed to include all the supporting materials mandated by the new regulations.237 Furthermore, its main priorities had already been declared by other programs or plans beforehand, or had by then been realized anyway. Therefore, 82

rather than opening new horizons, the plan was restricted to recognizing and legitimizing changes that had been already in the making. Its preamble disclosed the following goals for Budapest’s urban development: 1) 2) 3) 4) 5) 6) 7)

Extensive growth to be replaced by inner structural development; Developments aiming to preserve the urban structure; Renewal of urban areas; Extending supply to meet private development demand; Preserving land for infrastructure (road, rail, communal, etc.); Upgrading public spaces; Heritage protection.

was adopted. The West End City Center, a shopping mall and office complex adjacent to the Western Railway Station, was under construction in 1998; while the Millennial City Center, a giant mixed-use development on land formerly designated for the 1996 EXPO, was announced, and the development area was tendered.238 Objectives 2 and 7 – preserving the existing urban structure and protecting the built heritage – shed light on the conservative attitude of urban planning at the time. This, in its turn, was responsible for the lack of significant revisions of the city’s structure, whereas drastic changes to the production of space would have demanded such reconsiderations. A hostile attitude towards iconic architecture and high-rise developments in the decades following the regime change are good examples of such conservatism. While Prague built projects by international star architects Frank O. Gehry and Jean Nouvel soon after the regime change,239 and Warsaw erected a new central business district to reduce the dominance of the Stalinist Palace of Culture over the city’s landscape (Fig. 35.), all such attempts failed in Budapest during the 1990s and 2000s. Prominent among these were the unrealized projects of Zaha Hadid (Fig. 36.), Hani Rashid, and Norman Forster (Fig. 37.), invariably criticized for being alien to their local context and for the fact that their height rose above the rooftops of Budapest’s eclectic downtown. Loud opposition played an important role in frustrating these projects, even though the financial and real estate crisis of 2008–2009 seriously contributed to their ultimate failure. The SSP’s third aim, that of fostering urban renewal in central areas, was likewise formulated after most downtown districts had already launched their respective programs – some even before the regime change – and the City Council had enacted Budapest’s Urban Renewal Program.240 In this respect too, the SSP could only retrospectively legitimize what had already been in progress or at least decided upon.

Chapter 3  The Decentralization Narrative. Retroactive Urban Planning vis-à-vis New Local Governance and Property R ­ egimes

As for the first goal, the initial wave of large private developments densifying Budapest’s second urban belt was already well under way at the time when the 1998 SSP

83

Fig. 35. Skyscrapers by architects Helmut Jahn and Daniel Liebeskind adjacent to the Stalinist Palace of Culture and Science in Warsaw.

Fig. 36. Zaha Hadid’s unrealized office building at Szervita square, Budapest. Rendering from 2006.

Fig. 37. Norman Foster’s unrealized project in central ­Budapest. Rendering from 2010.

84

Dense urban centers

Urban block structure Free-standing blocks Housing estates Garden city

Industrial land use Institutional land use

Urban parks Forests 0

5 km

Fig. 38. The 1998 Settlement Structure Plan of Budapest.

Until 1997 Általános Rendezési Terv (ÁRT)

General Urban Plan (GUP)

Részletes Rendezési Terv (RRT)

Detailed Regulatory Plan (DRP)

Introduced in 1997 Településszerkezeti Terv (TSZT)

Settlement Structure Plan (SSP)

Fővárosi Szabályozási Keretterv (FSZKT)

General Regulatory Framework Plan (GRFP)

Budapesti Városrendezési és Építési Keretszabályzat (BVKSZ) Kerületi Szabályozási Terv (KSZT)

Budapest’s Regulatory Framework of Urban Planning and Building (BRFUPB) District Regulatory Plan (DRP)

Introduced in 2007 Integrált Városfejlesztési Stratégia (IVS)

Integrated Urban Development Strategy (IUDS)

Fig. 39. Glossary of Budapest’s Urban Planning between 1990 and 2010, including abbreviations as used in this book.

85

The Third Period (2005–2010): The Era of Harmonization The main task of the new SSP issued in 2005 was that of establishing a plan set that was in full conformity with both the 1997 Building Law and with the Urban Development Conception of Budapest from 2003.241 It summarized the main goals for the city as follows: 1. Benefiting from Budapest’s geopolitical position as a gateway between east and west and as a regional sub-center; 2. Further developing traffic infrastructure, giving priority to public transportation, park-and-ride schemes and the highway ring around Budapest; 3. Fostering qualitative improvements to the built environment, mainly through the extension of the renewal programs; 4. Enhancing green infrastructure; 5. Expanding cultural and recreational supply; and 6. Better integrating the city and its agglomeration into a coherent metropolitan structure. The updated list of priorities included two new elements: those of setting a geopolitical strategy and of defining an aim to resolve the relationship between the city and its agglomeration. To this end, and in order to translate the requirements of the National Settlement Structure Plan for Budapest and its surroundings into specific provisions,242 an Agglomeration Development Act was adopted by Parliament in 2005.243 The new law resolved that the Agglomeration’s Structural Regulations should contain both a structural and a zoning plan, which were included as an appendix to the law. The SSPs of the settlements within the agglomeration were supposed to be harmonized with this higher-level regulation concerning land-use, infrastructure, and the distribution of centers. It was also in 2005 that, in accordance with the requirements of the Building Law, a medium-term Urban Development Program for Budapest was adopted.244 This was altered just a year later and renamed the Podmaniczky Program245, to then become the foundation for Budapest’s Integrated Urban Development Strategy (IUDS) in 2008.246 Such complex and long-term strategies, involving all the relevant domains, were required by the European Union as preconditions for eligibility for its urban renewal funds. The IUDS’s methodological and substantive requirements were jointly outlined by the Ministry of Local Government and Regional Development and the National Development Agency in November 2007. Their adoption left local governments with a very tight schedule as applications for the EU’s renewal funds were due in May of the following year.247 Soon thereafter, disputes erupted between Budapest’s Local Government and the Ministry.248 The City Council argued that their Podmaniczky Program fulfilled the IUDS’s formal requirements, while the Ministry wanted a new program to be developed from scratch. To resolve this controversy, and in order to avoid Budapest’s IUDS becoming a twenty-third strategy besides the districts’ IUDSs, a document called ‘Frame of an Integrated Urban Development Strategy’ was adopted and declared to be superior to the districts’ strategies. Budapest’s first IUDS was based on this resolution. It introduced six main development areas – the inner city, central Buda, northern Budapest, southern Budapest, Budapest’s air gate, and the Danube (Fig. 40.) – and 86

made management and policy proposals for each of these and their synchronization with each other and with the districts’ IUDSs.249 Soon after Hungary’s 2004 accession to the European Union, it came to a beginning of the inflow of funds from the EU’s Cohesion Funds, catalyzing the renewal of public spaces in Budapest. However, the ’Heart of Budapest’ program, launched in 2007 250 and targeting the center’s partial pedestrianization, had been facing criticism251 for channeling most external funds towards the further improvement of some of the wealthiest downtown areas rather than fostering policentricity and targeting structurally weaker city neighborhoods.252

full control. This, in its turn, had given private developers the upper hand and, thus, resulted in a laissez-faire-type urban development, characterized by the lack of a significant top-down strategy for restructuring the city.

3. Northern Budapest

6. The Danube

3. Northern Budapest

2. Central Buda

1. Inner City 6. The Danube

2. Central Buda

1. Inner City

4. Southern Budapest

4. Southern Budapest

5. Budapest‘s Air Gate

5. Budapest‘s Air Gate

Main Development Areas

Main Development The Danube Areas Development

The Danube Development Area 0

0

5 km

Area 5 km

Fig. 40. Budapest’s main development areas, defined by its Integrated Urban Development Strategy in 2008.

Chapter 3  The Decentralization Narrative. Retroactive Urban Planning vis-à-vis New Local Governance and Property R ­ egimes

All in all, one can state that the adjustment of the policies and modus operandi of urban planning to the new circumstances of the market economy and decentralized power geometry took a conspicuously long time, and resulted in the public authorities losing their ability to generate and keep structural changes under its

87

Fig. 41. Károly boulevard, renewed in 2011 as part of the ‘Heart of Budapest’ program.

Dunakeszi

Szada Fót

Budakalász 2 22 22 2

11 11 11 11 11 11

1111 1111 1111 1111 1111 1111

Pilisborosjenő

Gödöllő

M0 M0 M0 M0 M0 M0 10 10 10 10 M2 M2 M2 M2 M2 M2

Mogyoród

Üröm Solymár 2102 2102 2102 2102 2102 2102

1108 1108 1108 1108 1108 1108

M3 M3 M3 M3 M3 M3

1107 1107 1107 1107 1107

Kerepes

11104 11104 11104 11104 11104 11104

Csömör M0 M0 M0 M0 M0 M0

M0 M0 M0 M0 M0 M0 21104 21104 21104 21104 21104 21104

3 33 33 3

Kistarcsa M M M0M M M 00-M 000M M333 M M M 333 ös ös ös össz ös ös sz szek sz sz sz ek eköt ek ek ek öt ötés öt öt öt és és és és és

21103 21103 21103 21103 21103 21103

3102 3102 3102 3102 3102 3102

Nagytarcsa

8102 8102 8102 8102 8102 8102 3101 3101 3101 3101 3101 3101

Budakeszi

3103 3103 3103 3103 3103 3103

Pécel

31 31 31 31 31 31 1 11 11 1

Budaörs M1 M1 M1 M1 M1 M1

Maglód

M7 M7 M7 M7 M7 M7

Ecser

3101 3101 3101 3101 3101 3101

Törökbálint

M4 M4 M4 M4 M4 M4

Vecsés Diósd

Dense urban center with mix-use Dense urban neighborhoods

8102 8102 8102 8102 8102 8102

4 44 44 4

Industrial land use

Medium-density urban blocks Érd

Institutional land use Services

Gyál 5101 5101 5101 5101 5101

51101 51101 51101 M0 M0 M0 M0 M0 M0 M6 M6 M6

777

Garden city

Small-townish urban structure

6 6 66 66

Urban parks

Halásztelek 510 510 510

Forests

Dunaharaszti 4604 4604 4604

51 51 51

Szigetszentmiklós M5 M5 M5 555

Fig. 42. The 2005 Settlement Structure Plan of Budapest.

90

Üllő

Agricultural land use

4601 4601 4601 4601 4601 4601

0

5 km

historical background

systemic transformation

monolithic power geometry

symptom-group

two-tier municipality with autonomous districts

single, unified hierarchy

unclear division of competences

housing privatization

lack of proper vision on the city’s development

conspicuous scarcity of large-scale public projects of cultural and symbolic significance

public hand unable to keep structural changes under control

unusually rapid systemic transformation

absence of significant top-down restructuring of the city (land-use, infrastructure, etc.)

excessive decentralizaiton

unchanged modus operandi of planning retroactive urban planning counterproductive subsidization of urban renewal

1947-1989

1989-1990

moderate renewal, mostly unchanged urban structure, enhanced spatial segregation

urban development mostly characterized by businessdominated development projects not integrated into any grand urban design

1990-2010

Fig. 43. Formal scheme of the Decentralization Narrative. See page 132 for the abstract model’s combined and detailed scheme.

This chapter, dedicated to the decentralization narrative, has shown how the monolithic, centralized power geometry of the socialist party-state system gave way to a decentralization in the domains of local governance, real estate property, and urban planning that proved to be excessive in many ways. Furthermore, I pointed out that the combination of a two-tier municipality in Budapest with a uniquely powerful district level, the lack of clarity in the division of competence between the city and its districts, the ‘overnight’ privatization of apartments to tenants, and the dysfunctionality of the urban planning regime resulted in weak municipal governance and the public authorities’ inability to provide a proper vision on how the city should develop. As a result, in the period under investigation, the city’s political leaders were only partially able to keep structural changes under their control, which contributed to the proliferation of business-dominated development projects not integrated into any grand urban design.

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113  In contrast, many state monopolies (e. g., telecommunication, public transportation, and postal services) took over a decade to be liberalized, while the regime of energy production and dissemination still remains a state monopoly even 25 years after the regime change.  114 Iván Szelényi, ‘Pathways from and Crises after Communism: The Case of Central Eastern Europe’, Belvedere Meridionale, History and Social Sciences 26, no. 4 (2014): 7–23 .  115  Magyarország 1989 –2009 . A változások tükrében [Hungary 1989 –2009. In Spite of the Changes] (Budapest: Központi Statisztikai Hivatal, 2010), 63 .  116 Ibid., 59.  117  In their account on the basic models of capitalist political economy established in Eastern Europe after the regime change, political scientist Dorothee Bohle and historian Béla Greskovits identify a contradiction in the pro-market stance of these countries and their welfare state expenditures; for example in the case of pensions, especially for Poland and Hungary. Yet, goes the authors’ argument, the pursuit of this welfarist model helped them to manage relatively low levels of social inequality during transition and maintain political stability. Dorothee Bohle, Béla Greskovits, Capitalist Diversity on Europe’s Periphery (Ithaca: Cornell University Press, 2012), 152.  118 István Miklós Szegő, ‘Mementó 1990: a taxisblokád története és következményei’, hvg.hu, October  25, 2010, accessed September 30, 2014, http://hvg.hu/tudomany/20101024_memento_1990_taxisblokad  119 László Antal, ‘A Bokros-­ Csomag’, Beszélő 5, no. 5 (1995), accessed April 7, 2017, http://beszelo.c3 .hu/cikkek/a-bokros-csomag  120 The most important elements of the austerity package were the introduction of an 8 % import surcharge, the Hungarian forint’s one-time devaluation by 9 % and its continuous sliding devaluation afterwards, freezing nominal wages in the public sector, and the abolishment of gratuity in higher education and health care.  121  Iván Tosics, ‘A Conceptual Framework of the Post-Socialist Transition of Cities’, in Policy, Planning, and People: Promoting Justice in Urban Development, eds. Naomi Carmon and Susan S. Fainstein (Philadelphia: University of Pennsylvania Press, 2013), 76 –100.  122  Ralf Dahrendorf, ‘Has the East Joined the West?’, New Perspective Quarterly 7, no. 2 (1990): 42.  123  Act XX/1949 (August 18) on The Constitution of the Hungarian People’s Republic, Chapter V. on Local Bodies of State Authority.  124  Act I/1950 (May 18) on Local Councils, Chapter I. on General Provisions.  125  Ibid., Article 10, Section 1.  126 See: Tibor Walter, ‘A fővárosi önkormányzat új szervezetének kialakulása’ [Development of the New Organization of the Capital’s Local Government], Debreceni Jogi Műhely 2 (2007 ), accessed October  1 , 2015 , http://www.debrecenijogimuhely.hu/arc h i v u m / 2 _ 2 0 0 7 /a _ f o v a r o s i _ o n k o r m a n y z a t _ u j _ szervezetenek_kialakulasa/  127  György Gajduschek, ‘Változások az önkormányzati rendszerben: Egy értelmezési kísérlet’ [Changes to the System of Local Governance: An Explanation Attempt], Fundamentum 2 (2012): 61–73 (61).  128  The Act XXVI/1949 (December 20) on the Definition of Budapest’s New Territory attached 7 county towns (Budafok, Csepel, Kispest, Pestszenterzsébet, Pestszentlőrinc, Rákospalota and Újpest) and 16 villages (Albertfalva, Békásmegyer, Budatétény, Cinkota, Mátyásföld, Nagytétény, Pesthidegkút, Pestszentimre, Pestújhely,

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Rákoscsaba, Rákoshegy, Rákoskeresztúr, Rákosliget, Rákosszentmihály, Sashalom and Soroksár) to the capital city’s political territory.  129  Gábor Demszky, Elveszett sza­ badság – Láthatatlan történeteim [Lost Freedom – My Invisible Stories] (Budapest: Noran Libro Kiadó, 2012), 266.  130  Act I/1950, Article  4, Section 1.  131  Act X/1954 (September 25) on Local Councils.  132  Act I/1971 (April  25) on Local Councils.  133  The transformation of the soviet-type councils into independent local governments was declared by the left-liberal opposition in their document entitled ‘Societal Contract’ (Társadalmi Szerződés, published in 1987 by the then underground political review, Beszélő), as well as by the conservative Hungarian Democratic Forum’s program. Even the reformer wing of the socialist state party discussed the possibility of more autonomous local governance in the late 1980 s.  134  Zoltán Ripp, ‘Az önkormányzati rendszer születése és az első választások 1990 -ben’ [Birth of the municipal system and the first elections in 1990] (conference paper presented at Az önkormányzatiság 20 éve [20 Years of Self-Governance], Budapest, September  22, 2010).  135 Ibid. 136  Act XXXIV/1990 (May 24) on the Extension of the Councils’ Mandate.  137  Ilona Pálné Kovács, ‘Közigazgatási racionalitás és a magyar önkormányzati reformok: Tisztelgés Verebélyi Imre évtizedes közigazgatás korszerűsítési tevékenysége előtt’, in Rendszerváltás, demokrácia és államreform az elmúlt 25 évben: Ünnepi kötet Verebélyi Imre 70 . születésnapja tiszteletére. eds. András Patyi, András Lapsánszky (Budapest: Akadémiai Kiadó, 2014), 419. Furthermore, János Kis, first president of the Alliance of Free Democrats, remembered that Gábor Vági, the party’s expert on local governments, introduced him in 1989 to Verebélyi, of whom he had a good impression. In an interview with the author, July 20, 2014 .  138 Imre Verebélyi, ‘A tanácsi önkormányzati rendszer alkotmányos alapjai és fejlesztési irányai’, in A tanácsrendszer önkormányzati típusú reformja, ed. Imre Verebélyi (Budapest: Állam­ igazgatási Szervezési Intézet, 1988), 7–31 (30).  139 Act LXV/ 1990 (September  30) on Local Municipalities.  140  This party (Szabad Demokraták Szövetsége or SZDSZ in Hungarian) came second at the first free parliamentary elections in 1990, and emerged as winners of the municipal elections in the same year. Gábor Demszky, Budapest’s senior mayor between 1990 and 2010 was member and candidate of SZDSZ. 141 Act LXIII/1990 (August  9) on Amendments to the Constitution of the Republic of Hungary. 142 Ibid., Article 43 , Section 2 .  143  The ratio of 3300 inhabitants / municipality was the fourth lowest out of 24 countries compared in 1990. Pa­ wel Swianiewicz, ‘Size of Local Governments’, in Consolidation or Fragmentation? The Size of Local Governments in Central and Eastern Europe, ed. Pawel Swianiewicz (Budapest: OSI-LGI, 2002), 7.  144  Éva Fekete et al., ‘Size of Local Governments, Local Democracy and Local Service Delivery in Hungary’, in Consolidation or Fragmentation? (see note 143 above), 36.  145 Imre Verebélyi, ‘A helyi önkormányzat alapvonalai’, Magyar közigazgatás 9, no  41 ( 1991): 769 – 81 .  146  Gajduschek, ‘Változások az önkormányzati rendszerben’, 63.  147  Verebélyi, ‘A helyi önkormányzat alapvonalai’, 771.  148 Local tax income contributed to 3.4 % of the total municipal budget in 1992.

Chapter 6, 144 –7.  175  See note 75 above.  176 Government Decree 32 /1969 (September 30).  177  19,504 between 1961 and 1965, 22,507 between 1966 and 1970, 28,922 between 1971 and 1976, and 27,654 between 1976 and 1980. Attila Csaba Kondor, Balázs Szabó, ‘A lakáspolitika hatása Budapest városszerkezetére az 1960 -as és az 1970 -es években’, Földrajzi Értesítő 56, no. 3 –4 (2007 ), 237–69 (242).  178 For more on the topic of housing shortages under socialism, see the ’Underurbanization Theory’ in Chapter  2, 20 –2.  179  Zsuzsa Dániel, ‘A bérlakás-privatizáció paradoxona. Nemzeti ajándék vagy ráfizetés?’, 1996), 204 –30 Közgazdasági Szemle 63 . (March  (205).  180 See note 170 above.  181 Hungarian Central Statistical Office, Census of 2011. As a side-effect of apartment privatization, municipalities have been left with severe shortages of affordable social housing. This unintended consequence contributed, then, to the tendency of local governments, as mentioned in the discussion on municipal decentralization, to do what they could to get rid of their poor. János Ladányi, ‘Az üldözésről gondoskodó önkormányzatok’ [Municipalities Caring for Manhunt], in Egyenlőtlenségek, redisztribúció, szociálpolitika. Válogatott tanulmányok (1974 –2010), ed. János Ladányi (Budapest: Új Mandátum Kiadó, 2010), 451 –9.  182 See note 159 above.  183  E. g., the economist Zsuzsa Dániel’s discussion of the tenement privatization’s paradox. Zsuzsa Dániel, ‘A bérlakás-privatizáció paradoxona’, 204.  184  See note  159 above.  185 Municipal Decree 15 /1991 (June  27 ).  186 Council Decree 5 /1989 (August  31).  187 Act XXIV/1991 (June 12).  188  See more on the controversies regarding local governance earlier in this Chapter, 58 –65.  189 Act LXV/1990 (August 3).  190 Act XXXIII/1991 (August 2).  191  Most importantly the Decrees 32 /1969 (September 30) on the privatization of state-owned real estate and 1/1971 (February  8) on the allocation and lease of tenements.  192 See note 159 above.  193 Act LXXVIII/1993 (July 30) on the Rules of the Rental and Alienation of Apartments and other Premises.  194  Ibid., Chapter III., Articles 49 –61.  195  János Zolnay, ‘Huszonhárom kisváros’, Beszélő 10, no. 3 (2005), accessed March 28, 2017, http://beszelo. c3.hu/node/279  196 Order of the Constitutional Court 64 /1993 (December 22).  197  Az önkormányzati lakások privatizációja (Központi Statisztikai Hivatal, 1995), 1064.  198  E. g., the mean market value of apartments alienated by the municipalities in Budapest in 1990 was 1.7 million forints, while their mean selling price a mere 300,000. Dániel, ‘A bérlakás-privatizáció paradoxona’, 209.  199  János Zolnay adds in this respect that municipalities also could not resist the pressure from business groups and real estate investors seeking business premises and large development areas in Budapest. This, according to Zolnay, contributed to the dwindling of the public real estate portfolio. See note  195 above. For backgrounds on the investor compounds’ emergence see Chapter  2 , 36 –48 .  200 Dániel, ‘A bérlakás-privatizáció paradoxona’, 213.  201 Ibid., 215.  202  Gábor Csanádi et al., Város, tervező, társadalom [City, Planner, Society] (Budapest: Sík Kiadó, 2010), 239.  203  See more on socialist and post-socialist spatial segregation, exemplified with Budapest’s 8 th district, in Chapter  6, 137–9, 156 –61.  204  János Ladányi, Iván Szelényi, ‘Szuburbanizáció és gettósodás’ [Suburbanization

Chapter 3  The Decentralization Narrative. Retroactive Urban Planning vis-à-vis New Local Governance and Property R ­ egimes

This expanded to 13.8 % by 2006. Gajduschek, ‘Változások az önkormányzati rendszerben’, 62 .  149 Demszky, Elveszett szabadság – Láthatatlan történeteim, 270.  150  ‘Önkormányzati választások 1998 ’ [Municipal Elections 1998], National Election Office of Hungary, accessed September 3, 2015, http://www.valasztas.hu/hu/ovi/50/50_0. html; Viktória Kozma, Ferenc Kumin, ‘Inkumbensek a magy­ ar polgármesterek választási küzdelmeiben’, in Új képlet. Választások Magyarországon, eds. Zsolt Enyedi et al. (Budapest: Demokrácia Kutatások Magyar Központja Alapítvány, 2011), 132.  151  György Gajduschek, ‘A közigazgatás szervezeti jellemzői – összehasonlító aspektusból’ [Organizational Characteristics of Public Administration – From a Comparative Aspect], in Az Európai Unió tagállamainak közigazgatása [Public Administration of Member States of the European Union], eds. Gajduschek et al. (Budapest: Complex Kiadó, 2011), 37–58 (47–8).  152 Act LXV/1990 (August 3), Chapter VII.  153 Ibid., Article 62, Section 2.  154  Ibid., Article 68, Section 2.  155  Ibid., Article 63, Section 1.  156 János Kis, in an interview with the author, July 22, 2014.  157  Budapest currently has 23 districts. The 23rd, Soroksár, was established in 1994 by the Act on Budapest’s administrative area and its subdivision into districts. Act XLIII/1994 (April  25).  158  Demszky recalls János Schiffer, a socialist Member of Parliament and member of the parliament’s Municipal Committee, claiming in a speech in Budapest’s assembly in 1991 that prime minister József Antall deliberately aimed at the city’s radical fragmentation in order to reduce the city government’s capacity to act as a powerful independent opposition force. Demszky, Elveszett szabadság – Láthatatlan történeteim, 267.  159  János Zolnay, ‘Joghályog’, Beszélő 5, no. 5 (1993), accessed March 27, 2017, http://beszelo.c3.hu/cikkek/joghalyog  160 Ibid. 161  Gábor Demszky, ‘Ezerszínű március’ [Iridescent March], Beszélő 3, no. 12 (1991), accessed March 12, 2016, http://beszelo.c3.hu/cikkek/ezerszinu-marcius  162  Act XXIV/1991 (July  10), Chapter II., Article  8, Section 1.  163  Ibid. Chapter I., Article  1, Section 4.  164 Gábor Locsmándi, ‘Városépítés, településfejlesztés’ [City Building, Settlement Development], in Budapest kézikönyve, Vol. 1., Magyarország megyéi sorozat (Hatvan: CEBA kiadó, 1998), 82–98 .  165 Acts CIV/1990 (January  1, 1991) and ­XXXVIII/1992 (June  18).  166  Gergő Czeglédy, ‘A lokomotív 23+1 masinisztája’ [The Locomotive’s 23+1 Engine-Men], in A közigazgatási reform új perspektívái, eds. Attila Ágh, István Somogyvári (Budapest: Új Mandátum Kiadó, 2006), 213 –34 (217).  167 Regulation 47/2001 (November 22) of the Constitutional Court.  168  Act I/2003 (January 6), Article 2, Section 6.  169  Czeglédy, ‘A lokomotív 23+1 masinisztája’, 219. Czeglédy claims that cooperation is not institutionalized, and thus each involved party sees the maximalization of individual benefit as the sole goal. This substantially diminishes the chance of win-win developments, even though promising opportunities are not absent.  170  Az önkormányzati lakások privatizációja, 1996 (Budapest: Központi Statisztikai Hivatal, 1997), accessed March 27, 2017, www.ksh.hu/statszemle_archive/1997/­ 1997_­12_1062.pdf  171  Act CXXXIII/2003 (December 29).  172 Ibid., Article 13 , Section 2 .  173 Decree 33 /1994 (June 10) of Budapest’s General Assembly.  174  See more on the redistributive renewal regime and its criticism in

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and Ghettoization], in Egyenlőtlenségek, redisztribúció, szociálpolitika. (see note 181 above), 423 –50.  205 The authors draw attention to the fact that the situation of many in this group turned out to be unsustainable as they could neither reintegrate into their old-new contexts, nor did the local job markets provide them with adequate opportunities. See note 202 above.  206  Csanádi et al., Város, tervező, társadalom, 240. Budapest’s population decreased from 2,016,774 in 1990 to 1,775,203 in 2001, while its agglomeration grew from 566,861 to 672,087 inhabitants over the same period. Data source: Hungarian Central Statistical Office (KSH), censuses of 1990 and 2001.  207 Csanádi et al., Város, tervező, társadalom, 242.  208 Ibid., 241. According to Csanádi and his co-authors, accession and migration have a 50 –50 % share among the causes for population decrease in the 1st and 2nd districts; in the 7th, 8 th, 13 th and 14th districts the dominant trend is forced migration; while in the 3rd, 5th, 9 th, 10 th and 12 th districts voluntary migration plays the dominant role. However, in the 4th, 16th, 17th, 22nd and 23rd districts no single factor can be identified as dominant. Here, the balance remained slightly positive due to the compensating effect of migration gains.  209  Kyra Tomay, ‘Migrációs folyamatok Budapesten és környékén a kilenvenes években’ [Processes of Migration in Budapest and its Surroundings in the 1990s] (master thesis, Eötvös Lóránd University Budapest, 2002).  210 ‘A migráció struktúrája Budapesten 1990 és 1997 között’ [Structure of Migration in Budapest Between 1990 and 1997 ] (survey by Szonda Ipsos Kft., Budapest, 1998).  211 Csanádi et al., Város, tervező, társadalom, 243 –4 .  212 Regulation of the Council of Ministers 1027/1986 (May 22).  213 Kiril Stanilov, ‘Urban Planning and the Challenges of Post-Socialist Transformation’, in The Post-Socialist City, Urban Form and Space, Transformations in Central and Eastern Europe after Socialism, ed. Kiril Stanilov (Dordrecht: Springer, 2007 ), 413 –25 (414).  214 Act LXVIII/1997 (July 24).  215 Published on January 16, 1997.  216  Act XXVI/2003 (May 13).  217 Act LXIV/2005 (June  28).  218  Enacted by Decree 1125/2005 (May  25) of Budapest’s City Council.  219 Decree 1096/2006 (June  29) of Budapest’s City Council. The program was named after Frigyes Podmaniczky, vice-president of Budapest’s Communal Work Council between 1873 and 1905, an important protagonist of Budapest’s massive development towards the end of the 19 th century.  220 Decree 2133/2008 (December  18) of Budapest’s City Council.  221  Government Decree 219/2009 (October 5).  222 Enacted with Decree 77/1989 (June 20) of Budapest’s City Council.  223 See note 206 above.  224 The sociologist Iván Tosics calls this period that of unfettered market, as opposed to the regulated market that was to follow. See note 121 above.  225 Western investment already made its appearance in the 1980s, after Hungary joined the International Monetary Fund in 1982. Throughout the 1990s, Hungary was a regional leader in terms of foreign capital investment. In 1996, it received 3,200 billion US Dollars, more than three times as much as in 1987, when 1,000 billion flew in. Szilvia Némedi-Varga, ‘A külföldi tőkeberuházások a világgazdaságban’ [Foreign Capital Investment in the World Economy], Statisztikai Szemle 1998 , 390 –406 (391), accessed April 18, 2017, www.ksh.hu/statszemle_

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archive/­1 998 /­1 998 _­0 4 – 05 /­F 1998 _­0 4 –­0 5 _­3 90 .pdf  226 As István Schneller – chief architect of Budapest at the time – recalls in an interview given to the author on March 29, 2011.  227  BFVT had 44 employees at the end of 2014. See its public interest report from 2014, accessed April 13, 2017, http://www.bfvt.hu/download.php?98bdd­ 9a700­fd3fdaeaead­249­52­f 88dd  228 E. g., see the story of the Allee development, where the same firm was commissioned by the private investor to design their shopping mall and by the district municipality to prepare the Detailed Regulation Plans for that very development. See more in Chapter 2, 45 –8 .  229 Plan for Budapest’s Settlement Structure, enacted with Council Decree 46/1998 (October 15) of Budapest’s City Council. 230 See note 214 above.  231 Ibid., Article 2, Section 29, translated by the author.  232 Act III/1964 (December 2), Article 6, Section 1.  233 In an interview with the author, March 29, 2011.  234 Decree 1125/2005 (May  25) of Budapest’s City Council.  235  Enacted with Council Decree 48/1998 (October 15).  236 Government Decree 253 /1997 (December 20).  237 Article 3 of the 1997 Decree requires a study on telecommunications – this was missing from the 1998 SSP. The plan was also not in conformity with the land-use categories introduced in the Article 6 of the Decree. The new Building Law’s Article  11, Section 4 demands identifying factors affecting or potentially endangering the proposed land-use (such as mining, pollution, floods, etc.). This requirement was not met by the 1998 SSP either.  238 See more on these developments in Chapter  2, 39, 44.  239 The Dancing House (Czech: Tančící dům) is the nickname given to the Nationale-Nederlanden building on the Rašín Embankment in Prague, Czech Republic. It was designed by the Croatian-Czech architect Vlado Milunić in cooperation with Canadian-American architect Frank O. Gehry and built between 1992 and 1996. The Golden Angel (Czech: Zlatý Anděl) is an administrative and shopping complex in Prague, designed by French architect Jean Nouvel. The project commenced in 1994 and was completed in November 2000.  240 The Renewal Order 46/1997 (December 29) regulated the methods and financing of urban renewal and set its program. 241 Enacted with Decree 410/2003 (March  27) of Budapest’s City Council.  242 Act XXVI/2003 (May 13).  243 Act LXIV/2005 (June 28).  244 Enacted by the City Council’s Decree 1451/2005 (June 29).  245 Enacted by the City Council’s Decree 1096 /2006 (June  29).  246 See note 220 above.  247  Sándor Bardóczi, ‘Integrál-e a budapesti IVS?’ [Does Budapest’s IUDS integrate?], Építészfórum, February 2, 2009, accessed April 18, 2017, http://epiteszforum.hu/integral-e-a-budapesti-ivs  248 Ibid. 249 ‘ITS Budapest Stratégia’, accessed April 15, 2017, budapest.hu/Documents/Integralt_Varosfejlesztesi_Strategia/BP_ITS_Strategia_Megalapozo.pdf  250  Enacted with the City Council’s Decree 155/2007 (February  15).  251  E. g., Sándor Bardóczi, ‘Budapest szív(koszorú) műtét előtt’, Építészfórum, March 2, 2007, accessed April 25, 2017, http://epiteszforum.hu/budapest-sziv-koszoru-mutet-elott  252 All elements of the program targeted central areas. For a full list of projects see: accessed April  24, 2017, infoszab.budapest. hu:8080/GetTirFile.aspx?id=48699 

Chapter 4  The Kulturkampf Narrative. From the Hungarian Tulip Dispute to a Post-Socialist Clash of Ideologies

Chapter 4  The Kulturkampf Narrative From the Hungarian Tulip Dispute to a Post-Socialist Clash of Ideologies

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The third building block establishes links between deep cultural and ideological divisions inherited from the pre-war period and repressed rather than openly discussed in socialist Hungary, and also the frustration of large-scale projects of cultural and symbolic significance that materialized decades later, after the regime change. It does so by revisiting a Hungarian architectural debate of the 1970s which led to the polarization of the community of architects, and prepared the outburst of an all-out Kulturkampf in the 1990s, resulting in an ideological division over how the Hungarian nation state should be represented by architecture and how its capital, Budapest, should be developed.253 The resulting lack of a consensual vision and the frustration of large-scale public projects of cultural and symbolic significance, in their turn, upgraded the big investor projects, as local politicians were left with these to demonstrate to their voters the progress of the city and their district. Under the socialist regime, it was by and large impossible to openly discuss any issue with political connotations. The architectural debate of the 1970s on humanizing socialist mass housing was one of the rare exceptions. In the end however, even this debate was silenced; only to erupt again with a vengeance after the regime change when it came to be part of a broader Kulturkampf between the traditionalist, populist faction of the intelligentsia and its cosmopolitan, urbanist wing. This chapter is based on the hypothesis that, while the so-called Tulip Dispute of 1975–1976 is often praised as the decisive moment of a paradigm shift and progress in architecture, it instead ended up contributing to an ideological standoff decades later.

Fig. 44. Budapest’s first precast panel apartment blocks under construction in 1965.

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Prelude: The Socialist Mass Housing Dilemma The first public debate on socialist mass housing and on attempts to humanize it marked, rather symbolically, the last year of the socialist regime’s ambitious fi ­ fteen-year housing program that had targeted the construction of a million dwellings between 1960 and 1975. As part of that engagement, the first housing complex in Budapest using large prefabricated panels had been erected (Fig. 44.).254 The implemented technology, imported from the Soviet Union, was based on a French construction system.255 Architects at the time had mixed feelings concerning prefabricated construction systems and the state’s ambitious housing program. On the one hand, they perceived these as projects leading to the massive homogenization of the built environment

construction of housing were held responsible for frustrating the architects’ creative self-expression.257 On the other hand, most architects acknowledged the potential of prefabricated mass housing in responding to housing shortages. The latter was a central issue in the 1960s and 1970s, as the joining of the urban working class by a formerly agricultural workforce had yet to be followed by a comparably rapid migration of this population from rural areas to urbanized centers, as Szelényi and Konrád pointed out in ‘Social Conflicts of Delayed Urbanization’, their empirical study from 1971.258 Furthermore, architects looked back at their brief 1950s misadventure with socialist realism as a diversion imposed by a totalitarian regime and were keen to embrace the modernist discourse, party rehabilitated in Hungary by the 1960s.259

The Tulip Dispute and the Question of an Antimodernist Turn in Architecture In this social, political and professional context in 1975, a heated architectural debate was provoked by a newly erected mass housing complex in the provincial town of Paks. Young architects of the so-called Pécs Group – a studio within the state planning bureau Pécsiterv – engaged in vernacular traditions and applied ornaments in the form of abstracted tulips in an attempt to humanize the facades of the prefabricated blocks (Fig. 45.). The group had become identifiable in 1973 when they exhibited and published their architectural manifesto, ‘Csak tiszta forrásból’ [Only from Pure Sources], making reference to the architect Károly Kós and the composer Béla Bartók whose Cantata Profana ends up with these words (Fig. 46.).260 The Tulip Dispute had been launched in the periodicals Élet és Irodalom, a literary magazine, and Magyar Építőművészet, an architectural review. It is seen as a decisive moment in Hungary’s postwar architectural discourse, when the relationship between regional and national identity on the one hand and mainstream modernism and European identity on the other became a central theme for the intellectual field in architecture.261 The ‘Tulip houses’ were designed within the framework of the socialist economic system’s formal rationality

Chapter 4  The Kulturkampf Narrative. From the Hungarian Tulip Dispute to a Post-Socialist Clash of Ideologies

and as tools of the party-state to reduce architecture to engineering. On this account, characterless milieus and routinized modernism appeared and came to dominate the profession by the 1970s.256 Excessive centralization of building policies and the mass

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Fig. 45. The tulip-ornamented blocks in Paks after their completion in 1975.

that defined cost effectiveness and industrialized mass production of housing as the central success criteria for socialist architecture. As such, the project was not meant as a fundamental critique of socialist mass housing but rather as an attempt to humanize it. Key representatives of the profession, however, criticized the project for promoting antimodernism. Máté Major, head of the Chair for the History of Architecture at the Technical University of Budapest – himself a communist from the pre-war years and an ardent champion of modernism in architecture at the same time – took the role of leading the attack. While most Western accounts of the debate have had a hard time finding sufficient explanations for why the folk-art-inspired experiment received such a harsh rebuttal,262 the sociologist Virág Molnár offers one in her review of the dispute. She interprets the mainstream architects’ vehement actions against the ‘Tulip houses’ as an expression of their ‘regressive, authoritarian academism’,263and explains it through an identification with modernism as a last link to international trends and European cultural identity.264 Their critique attempted to show that the tulip experiment was motivated by a flawed and reactionary attitude. Making reference to the folk-art-inspired, antimodernist agenda of the semi-fascist interwar regime and to the socialist realism of the postwar Stalinist state, Major concluded that the folk culture-driven architectural movements in 20th-century Hungary had hidden political agendas, embraced authoritarian regimes and rejected progressive worldviews.265 Others called attention to contradictions between the factory-produced buildings and their ornaments invoking handicraft motifs; they claimed that decoration is mere camouflage that masks but does not settle problems of mass housing blocks.266 According to a third line of argument, the young architects answered the wrong question, as the problem that needed to be resolved was not prefabricated construction technology as such but its poor application.267

Fig. 46. ‘Only From Pure Sources’, plates six and nine from the Pécs Group’s exhibit in 1973.

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In response to these objections, defenders of the Paks experiment made reference to Hungarian Secession as an important milestone towards the definition of modern architecture influenced both by international trends and regional heritage. Gábor Preisich pointed out that Secession heralded modernism insofar as it freed architecture from its bondage to classicism and historicism.268 Preisich insisted that certain modernists’ rage against Secession was a mere expression of its aim to be different. He argued – citing for evidence Béla Lajta’s Rózsavölgyi House in Budapest, an early modernist building richly decorated with folk ornaments (Fig. 47.) – that the transition from Secession to modernism was smooth and gradual. Others used the secessionist reference to praise the Tulip Houses as cultural symbols around which a local community could constitute itself.269 One of the most ardent defenders of the Tulip experiment was, however, not an architect but a poet, László Nagy. He was the first to confront Major’s pivotal offensive and defend the ornamented concrete buildings.270 Nagy quoted Marcell Breuer expressing, during his 1967 visit to Hungary, his disappointment with the loss of the revolutionary Bauhaus heritage. He then proclaimed that Hungarian architecture faced an artistic crisis. While the debate provided strong evidence for a wide agreement concerning the need to humanize the production of habitat, competing opinions emerged on how to do this and whether an antimodernist turn could be the solution. The dispute soon shifted from the question of ornaments to broader issues of socialist housing policies, provoking a heavy reaction on the part of the authorities. The Paks experiment was stopped by an administrative intervention, and the Pécs Group was dissolved.271 This couldn’t, however, prevent the strengthening of a populist circle of Hungarian architects who sought references in nature and in native traditions.272 György Csete, the

Chapter 4  The Kulturkampf Narrative. From the Hungarian Tulip Dispute to a Post-Socialist Clash of Ideologies

Fig. 47. Between secession and modernism: the decorated façade of the Leitersdorfer House in Budapest in 1912.

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Fig. 48. Its zooid shape and scaled skin characterize Makovecz’s ski-hut in Dobogókő, built in 1980.

Pécs Group’s former head, and Imre Makovecz, leader of the studio Corvina Műterem, emerged as the group’s leading figures, influential both within and outside the architectural profession.273 The stormy Tulip Dispute pushed them and their intellectual supporters towards a more openly traditionalist and antimodernist position.274 Being pushed to the periphery by no means indicated the group’s irrelevance. On the contrary, their marginalization at home was coupled with increasing publicity abroad: Makovecz came to be the most internationally renowned Hungarian architect of his time. This was most probably not only due to the oddity of his architecture. With the propagation of postmodernism, images have become the primary ways of shaping the structure of the architectural discourse, and the power of images of Makovecz’s organic architecture was incontestable.

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Fig. 49. A metaphor of the political turnover: István Janáky’s 1990 design of the Butterfly House

The Tulip Dispute Against the Backdrop of the Populist-Urbanist Polarization This shift proceeded in parallel to a turn of the wider populist intellectual movement towards traditionalism. Roughly simultaneously with the Tulip Dispute, populist writers initiated a debate on ‘fridge socialism’.275 They argued that the low-level consumerism promoted by the Hungarian socialist regime in the 1960s, in which the ‘Hungarian dream’ was symbolized by a household possessing a fridge, threatened to replace collectivist ideals through philistine individualist lifestyles. Their urbanist opponents argued that the problem, rather than resulting from too much market economy, originated with too little of it.276 These arguments reflect a long-standing intellectual polarization rooted in Hungary’s prewar history between a more cosmopolitan, so-called ‘urbanist’ community of intellectuals and a nationalist leaning, so-called ‘populist’ tendency.277 Whereas the Tulip Dispute might show the populists to be more critical towards the communist regime, in the ‘fridge socialism’ debate, by contrast, the populists appeared as the defenders of communism’s traditional ideals. This fact, together with the omnipresence of the populist-urbanist polarization in both debates, leaves us with two conclusions. First, the main fault line between populists and urbanists was not analogous to the division between supporters and opponents of the single-party state. 103

It is a mistake to think that the populists were more critical towards the regime and urbanists were more leaning towards accepting it (or vice versa). Second, despite the regime’s efforts to monopolize the ideological discourse, the populist-urbanist disputes of the 1970s can be understood as developing along the fault-lines determined independently of the official discourse, and largely inherited from before the Second World War. Although political plurality was suppressed and competing opinions disallowed, the populist-urbanist opposition remained deeply engrained in the collective memory, to then resurge time and again.

The Tulip Dispute and the Post-Socialist ­Kulturkampf This brings us to the hypothesis that the old polarization was to play an important role decades later, after the regime change, and that the Tulip Dispute and its aftermath contributed to the bitter divisions that marked the architectural and wider intellectual communities in Hungary after 1989. In his account of the post-socialist Hungarian republic’s failure, the philosopher János Kis coined the term ‘the hundred years war’ to describe the polarization between the political right and left in twentieth-century Hungary. According to Kis, two anachronisms – a political right yearning for the semi-feudal interwar period and a left unable to distance itself from the socialist Kádár period – contested and denounced one another in the decades following the end of socialism.278 The 1970s architectural debate has proved to be an important milestone to an all-out Kulturkampf that has divided architects into two warring camps in post-socialist Hungary, resulting in an ideological controversy over how the Hungarian nation-state should be represented by architecture. In the ensuing years, this bitter division has had its part in the frustration of many large-scale projects of cultural and symbolic significance. I want to illustrate this via a number of episodes. First, I will discuss the vagaries of the Hungarian pavilion at the Seville EXPO in 1992, a story of overruling a professional jury’s decision on ideological grounds. My second example will be that of a century-old proposal, resuscitated after the regime change, of building a National Pantheon prominently hovering above the city, on top of the Gellért Hill. Thirdly, I will tell the National Theater’s saga. The fourth episode will be related to the controversy about the Castle District’s symbolic role. Finally, I will revisit the story of the never-held 1996 Budapest EXPO. Vagaries of the Hungarian Pavilion at the Seville EXPO in 1992 The first casualty of this post-socialist Kulturkampf was, quite symbolically, István Janáky’s competition-winning design for the Hungarian Pavilion at the 1992 EXPO in Seville. Preparations for the world fair got underway parallel to the political change in Hungary, and the event in Spain presented a great opportunity for the young democracy to present itself to the international community. An open competition for the design of the Hungarian Pavilion was announced in December 1989 with entries due the following March. Janáky, who designed the winning proposal, grounded his 104

concept in the Expo’s meta-theme, ‘Times of Discovery’. The Janáky design, a butterfly aviary exhibiting thousands of species, was meant on the one hand to be a symbol of Eastern European transformation, analogous to the caterpillar’s metamorphosis into a butterfly (Fig. 49.). On the other hand, it was driven by the aim of exhibiting something ‘real’ in the pavilion rather than images or other abstract forms of content. The jury’s enthusiasm about the proposal was not unanimously shared. Hung­ expo, the state-run firm responsible for the country’s participation at fairs, openly attacked Janáky’s project – as did populist intellectuals – for being too conceptual and for not properly representing Hungarian national identity.279 The critics claimed that the pavilion ought to be based on emotional grounds and to represent the history of Hungarians. Spiraling disputes and escalating confrontation resulted in the outgoing communist government withdrawing Janáky’s commission in May 1990, after – and probably influenced by – the election victory of the right. The unfolding story of the pavilion’s commission was not short of twists. The communist EXPO deputy, Tamás Beck, approached the organic architect Imre Makovecz – who had not himself submitted any proposal to the design competition – as early as in June 1990, straight after having withdrawn Janáky’s commission. At first, Makovecz refused the direct commission. In the months to follow, Béla Kádár, minister of the newly formed right-wing government and responsible for the EXPO affairs, resumed talks with Janáky but soon

Fig. 50. Seven towers representing ‘Magyar’ history: the Hungarian pavilion at the Seville world fair in 1992.

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came to the same conclusion as his predecessor. On August 17, 1990, Kádár proposed that Makovecz design the pavilion, who this time accepted the commission. Makovecz, the leader of the traditionalist, populist group of architects, seemed a natural choice for the Christian-nationalist government. This interlude pushed Janáky, otherwise known as himself an advocate of the banality of rural architecture, into a deepening personal conflict with Makovecz. Although he remained faithful to his view of the countryside’s ‘architecture without architects’280 exemplariness, Janáky criticized Makovecz for creating kitsch rather than architecture actually rooted in vernacular traditions,281 and he came to become an emblematic protagonist of the cosmopolitan, urbanist faction of architects. At a roundtable discussion282 in July 1990, he called Makovecz’s circle a ‘peculiar architectural breed’, then claimed in October283 that Makovecz’s decision in August to accept the commission was mere revenge for his critical comments. According to an alternative reading, however, Makovecz simply did not want to do business with the outgoing communists and his refusal in June and positive response in August were a rational consequence of his anti-communism. Janáky continued giving voice to his resentment,284 and his open confrontation with Makovecz only came to an end with their deaths in 2011 and 2012, respectively. The controversies of the Hungarian Pavilion in Seville allow us to record three correlations. First, besides the conspicuous ideological affinities of Makovecz with the Christian-nationalist government and of Janáky with the liberal opposition, there was also continuity between the populist-urbanist debates of the 1970s and the clashes of the 1990s in terms of the protagonists. As we have seen, ­Makovecz played a central role in both periods. Second, Janáky’s case reveals that the populist-­urbanist framework was so prominent that one could easily find oneself pigeonholed into either faction, even in the absence of genuine ideological commitments. Third, the personalization of Janáky’s and Makovecz’s wrangling exhibits the difficulty of rational and productive debate between the warring sides. The Idea of a National Pantheon Hovering Over Budapest Imre Makovecz is closely linked to another project of symbolic significance which so far has not come true but has continued to recur time and again. Building a pantheon on top of the Gellért Hill, along the Danube river, is a century-old dream of the traditionalist right. The top of the Gellért Hill wears two stigmas, as Makovecz claimed in an interview in 2008: one being the Habsburg Citadel built in 1849 to keep any future revolution under gunfire, the other being the statue of liberty, praising the soviet troops that occupied the country in 1945.285 Makovecz suggested to replace the citadel and the statue with a National Pantheon in the memory of giant figures and great moments of Hungarian history. However, Makovecz, known for his overheated patriotism, was by no means the first to come up with such a proposal. In his first call for the project, ­Makovecz himself had referred to István Medgyaszay’s Hungarian Pantheon, designed for a competition in 1903, claiming that that work should be realized to ‘evoke the remembrance of the saintliest and greatest of men who had lived here.’286 The emergence of the political concept of erecting a national ‘hall of fame’ dates even further back to the beginning of the 19th century when, with the rise of nationalism in Hungary, noblemen-turned-intellectuals started a debate on the subject and soon 106

published a book series that, besides introducing the nation’s most important historical heroes, also apotheosized them in a spiritual pantheon.287 Soon thereafter the demand for erecting a memorial park appeared, and 1871 saw the first design competition for a National Pantheon to be built on top of the Gellért Hill. This competition was won by Gyula Berczik’s ‘Budapest Acropolis’, a building inspired by a Greek Orthodox basilica (Fig. 52.). Frigyes Feszl’s design, the first proposal for a millennium memorial intended to praise the soon-1000-year-old Hungarian state, was a runner-up. An interesting proposal was submitted by Ferenc Novák, who suggested a funicular railway to connect a pharos on the peak of the Gellért hill with the bank of the Danube. All these ambitious plans were set aside in 1873, the city government’s Public Works Council (a body responsible for the urban development of the capital) deciding upon planting 300,000 trees on the bald cliffs instead – as part of the country-wide trend of dibbling ‘millennial trees’.288 At 12,000 forints, the expense of this operation was a fraction of what constructing the memorial site would have cost. In 1885, the Kerepesi Cemetery was officially declared to be the nation’s pantheon. Consequently, in 1893, following a submittal by the prime minister, the 21 deputies in the committee closed the case by dropping the idea of a new monument on the Gellért Hill. Nevertheless, the idea of the National Pantheon had its renaissance in the first years of the 20th century, when István Medgyaszay, a student of Otto Wagner, chose it for the topic of his final project in Wagner’s master school.289 He suggested exhibiting the Feszty-cyclorama, a series of paintings showing the settlement of Hungarians in the Carpathian Basin, in the round-shaped main hall of the monument (Fig. 51.). His design quickly became popular amongst the nationalist intelligentsia. It even received the main prize of the Academy of Arts in 1906, but got swept aside by the First World War and was only to be revisited after the regime change of 1989.

Chapter 4  The Kulturkampf Narrative. From the Hungarian Tulip Dispute to a Post-Socialist Clash of Ideologies

Fig. 51. István Medgyaszay, designs of a National Pantheon, 1906.

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Figs. 52. and 53. Gyula Berczik’s winning proposal at the 1871 competition for the National Pantheon (left) and Imre Makovecz’s design from 2008 (right).

Makovecz then modestly designed a memorial (Fig. 53.) smaller than Medgyaszay’s Pantheon and wrapped up the proposal with his own spiritual rhetoric. He claimed his designs aimed to keep God in play.290 His National Pantheon, besides establishing links to the roots, was meant to become a symbol of national pride. His proposal was soon taken up by the newly formed Christian-nationalist government of Viktor Orbán but, due to insufficient funding and the death of Makovecz in 2011, it remained unrealized. It is hard to tell whether strong opposition to the progressive faction of architects and left-liberal intelligentsia had any serious role in stopping the project.291 Makovecz was not the first in the 2000s to revive the idea of the National Pantheon. It was already revisited in 2005, when architects Pál Farkas and Tamás Rüll submitted a proposal for a memorial complemented by a Via Crucis on top of the Gellért Hill at the ideas competition ‘Signs for Budapest’.292 The fact that the idea of a pantheon and the ideology behind it was still hot was proved by the entry winning an honorable mention despite the more progressive climate governing both the country and its capital under the socialist-liberal coalition. Most recently, in the fall of 2016, the theme was picked up once more by another ideas competition, announced for the reprogramming and ‘incorporeal revival’ of the citadel at the top of the Gellért Hill.293 Alongside various different landscape design ideas, one of the rewarded proposals yet again suggested a large pantheon and was titled ‘historical sarcophagus with a sun-moon tower and a rondelle of Hungarian kings’.294 The case of the National Pantheon is a good example of a project that, while managing to thematize the discourse on urban architecture over long periods of time, nevertheless failed due in part to ideological conflicts over its symbolism and in part to budget shortages. It was never built, but neither was it ever left behind for good. As a contrasting case to this one, the following is that of a project which has, after long decades of procrastination, ultimately been built; albeit after a political decision eliminating an already ongoing project initiated by the rival political side.

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government decided that the building was not safe and should be demolished. The company remained homeless for decades to come, ultimately becoming subtenants at the Madách, later known as the Hungarian Theater, until 2,000. The act of demolition of the Volkstheater building was seen by many as part of a general campaign aiming to destroy the relics of the national cultural tradition. The perception of the demolition as an attack on national culture gave the issue of the national theater a new impetus; it was transformed into an anti-communist, and more broadly anti-totalitarian, cause.296 In 1965, the second National Theatre competition of the 20th century was announced. It was an international contest, albeit with entries from the Eastern block only.297 A contract landed on architect Miklós Hofer’s table (Fig. 58.),298 launching his 23-year saga that included several new designs to various sites.299 These unfruitful decades concluded in a third competition, held in 1989 and won by Béla Ligeti’s proposal of an octagonally shaped building. Although a contract was concluded with Ligeti for a schematic design shortly before the regime change, the project was forgotten under the first freely elected government. The following years witnessed ongoing debates on whether Budapest needed a National Theater at all. Liberal intellectuals argued that the idea of a National Theater is an outdated remnant from the 19th century, the century of nationalism.300 Furthermore, they made the point that the city’s then-flourishing theater culture was based on small studio theatres that would be put at risk by being exposed to competition with a state-funded giant. Nevertheless, in 1995 the socialist-liberal government of Gyula Horn decided to take on the idea of the National Theater and to announce yet another design competition; already the century’s fourth. For a site, Erzsébet Square in the heart of the city was selected. István Fiala was appointed as a commissioner in 1996 and an open – though only national – competition was announced later that year, attracting 71 teams that submitted their proposals in 1997.301

Chapter 4  The Kulturkampf Narrative. From the Hungarian Tulip Dispute to a Post-Socialist Clash of Ideologies

‘Just not the Communists’: The Saga of the National Theater This narrative, too, originates way back in the 19th century when, in 1837, the Hungarian Theater of Pest, built according to the plans of Mátyás Zitterbach, opened its gates to the public (Fig. 55.). Buda and Pest were in those times multilingual cities, and they had first a German-language theater, hence the name Hungarian Theater. In 1840, the Hungarian Theater was re-labelled the National Theater, a sign of the fact that a rising tide of nationalism has reached Hungary. The building was judged fire-hazardous and abandoned in 1908, when the National Theater’s company moved to the former Volkstheater, a building located along the city’s second ring road and built in 1875 by the Viennese architects Fellner and Helmer.295 Zitterbach’s theater was demolished in 1913, and the same year saw the announcement of the first design competition for a new ‘Grand Theatre’ in a series of five. Two winners were announced; István Medgyasszay in the first round and Móric Pogány and Emil Tőry (these two architects submitted a common design) in the second (Fig. 56.). In the following year, World War I broke out, the project was dropped, and the construction never started. In 1937, however, the proposal was revisited, only to be then swept aside by the next war, World War II. The National Theater functioned in the meantime within the former Volkstheater building on the Blaha Lujza square (Fig. 57.). In 1965, using the subway construction as a pretext (the subway was going to have a stop below the theater), the communist

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Fig. 54. Demolition of the National Theater in 1965.

Fig. 55. Hungarian Theater of Pest, later National Theater, built in 1837 by architect Mátyás Zitterbach and demolished in 1913.

Fig. 56. Emil Tőry’s and Móric Pogány’s designs for the ­ ational Theater, competition entry from 1913. N

Fig. 57. Hungarian Theater of Pest, later National Theater, along the Rákóczi street in 1893.

Fig. 58. Miklós Hofer’s competition entry for the new ­National Theater from 1965.

As Roderick Ham – a member of the jury – later remembered, the proposal of Ferenc Bán was beyond any doubts the most powerful (Fig. 59.), leaving the jury with a trivial decision to make.302 Bán’s vision, incontestably postmodern both in its architectural articulation and graphical representation, incorporated a studio stage for 200 guests and a large hall with an audience capacity of 750. Construction began with the footstone ceremony on March 27, 1998 and was supposed to cost 14 billion forints. The international design competition was held under a socialist-liberal coalition at both government and city level, and the realization of the winning proposal commenced soon after. However, the change of government in 1998 brought about the state’s withdrawal from the theater project already under construction. Instead, the new Christian-nationalist government commissioned a different, historicizing design, reflecting their traditionalist worldview.303 In September the construction was brought to a halt, and on October 29 the government officially announced that the project was going to be stopped. The decision was justified by the allegedly high construction costs, and by – as it was claimed – a wrongly selected site.304 Instead, it was suggested, a less costly design should be commissioned and a site adjacent to Budapest’s second largest park, Városliget, should be selected as a location for the theater.305 Two days later, the government appointed a new commissioner in the person of theater director György Schwajda. The already constructed underground levels on Erzsébet square were later converted into a parking lot and a club, and were covered over by a public park. 112

Fig. 59. Ferenc Bán’s winning design from 1997.

could not but feel that the real reasons had nothing to do with issues of urban planning or budgetary problems: they were rather of a political and ideological nature. First of all, Orbán rhetorically associated the preceding socialist-liberal government with the communists who had robbed the nation of its theater in 1965, and attributed high symbolic importance to preventing the same communists from being the ones ‘giving it back’ some thirty years later. Secondly, Orbán and his coterie were hostile to the idea that the home of the nation’s theater would be a modern, contemporary building; instead, they wanted a historicizing one.306 Half a year later, in the Spring of 1999, Schwajda commissioned architect Mária Siklós to deliver the plans for the new theater – bypassing the need for another competition – which led to the resignation of Ferenc Callmeyer, then president of the Chamber of Architects and proponent of a new design competition. In August of the same year, Schwajda announced that a new site was selected at the former EXPO-area, and in December Siklós’s designs were published. The building looked identical to the one designed by her for the previous site. Interestingly enough, Siklós did not have a single project of this scale as a reference and was better known for reconstructing the theater’s interior in Szolnok at the time when Schwajda was the director there, and for designing Schwajda’s own single-family house a couple of years earlier.307 As a result of ongoing protests by the Chamber of Architects, Schwajda organized an invited competition with seven teams. As the program and layout of Siklós’s proposal were given, and Schwajda was under time pressure since the building was expected to be erected prior to the parliamentary elections in 2002, the task was practically limited to facade design. All invited architects accepted the invitation, and on May 26, 2000 György Vadász’s proposal was declared the winner (Fig. 62.). Notwithstanding the announcement, the contract remained unsigned as Schwajda wanted Vadász to assume the role of a mere design consultant and to work in tight collaboration with Mária Siklós as project leader. Only a month and a half later, in early July, Schwajda submitted Siklós’s designs requesting building permission. This fact was widely perceived as evidence that Siklós’ office was continuously developing the designs and working on the authorization documents, while the pseudo-competition was organized.308 The Chamber later dismissed her for moral fault and suspended her membership, but not until the plans were authorized and construction started in September,

Chapter 4  The Kulturkampf Narrative. From the Hungarian Tulip Dispute to a Post-Socialist Clash of Ideologies

Given the fate of the project and the final budget that, together with the refurbishment of the Erzsébet square, topped the 15 billion barrier by an additional billion, one

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Fig. 60. The abandoned construction site in 1998.

Fig. 61. The ‘Gödör’ [Pothole] club and park on the Erzsébet square opened its gates in 2002.

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Fig. 62. György Vadász’ proposal for altering Mária Siklós’ designs for the National Theater. Winning project at the competition held in 2000.

2000. The National Theater (Fig. 63.) was erected as planned by the spring of 2002, in the final spurt of the election campaign. It opened its gates to the public with a show of József Katona’s Governor Bánk, a traditional Hungarian drama, on March 15, the national holiday in remembrance of the 1848 revolution. The building received very poor reception within the architectural community. Harsh criticism targeted both its anachronistic image and its allegedly weak architectural qualities.309 After his ill-fated National Theater project, Ferenc Bán has chosen an internal exile by working for his home region in northeastern Hungary. A community center in Nyírbátor and his own house in Tokaj (Fig. 64.) both wear his fresh and progressive architectural style. He also carried on with experimental projects for his own satisfaction, without clients, as he had already done back in the 1980s when he experimented with the possible radical reuse of materials such as straw bales and used tractor tires.

Chapter 4  The Kulturkampf Narrative. From the Hungarian Tulip Dispute to a Post-Socialist Clash of Ideologies

Fig. 63. The National Theater in Budapest, opened in 2002.

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Fig. 64. Ferenc Bán’s own house in Tokaj, built in 2000.

The decades of procrastination in the socialist period are consequences of both the regime’s ambiguous attitude towards the National Theater and of the lack of sufficient budgetary resources in the stumbling party state economy for such cultural projects. A few years after the regime change a project for the National Theater came very close to realization, but the broad professional agreement behind it was not matched by political consensus. This resulted in the project being brought to a halt by a political decision for which the long-lasting standoff between the warring political sides was primarily accountable. Not only was the process of eliminating a project formerly selected via open competition and replacing it by means of direct commission highly questionable, but the choice of the new theater’s architecture, reflecting the world-view of the then ruling Christian-nationalist government, was also greatly controversial.

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Competing Visions for the Royal Castle: C ­ ultural and Touristic Center or Home to the ­E xecutive Power? Another case in which the ideological division spilled over into a political stalemate, with unilateral decisions eliminating projects initiated by the other side, is demonstrated by the frustration of a project targeting the reconstruction of the former headquarters of the military high command in the castle area, ruined during the Second World War, with the aim of converting it into a cultural and touristic center. The context of this story was the procrastination of the castle area’s planned renewal, as the competing visions concerning its possible role (as center for culture and tourism or for the government) could not be reconciled. The political right had long promoted

republic and that its democratic spirit doesn’t sit well symbolically with the remnants of the medieval kingdom.311 As a first measure, between 2000 and 2002 the Sándor Palace – a classicist building erected in 1806 and more or less continuously home to prime ministers between 1867 and 1945 – was refurbished, with the aim of locating Orbán’s office there. In 2002 however, the right lost the election to a socialist-liberal coalition, and the incoming prime minister refused to move his office to the Sándor palace. Since 2003, the palace has been home to the office of the president – a position with mostly ceremonial functions. It was in this setting that in 2003 ‘Budavár Kht’, a public utility company founded by the then socialist-led Ministry of Cultural Heritage for managing development projects in the castle area, announced an open ideas competition. The target was the refurbishment, extension and programming of the former command of national defense, ruined during the Second World War. The ruins were listed under strict heritage protection, albeit bearing neither particularly high architectural nor historic value, as architecture theorist Andor Wesselényi-Garay claimed in his blog.312 The winning proposal by the firm Építész Stúdió313 aimed at restoring the verticality of the castle in the collective memory by means of building seven towers above the ruins (Fig. 65.). Only a year later, in 2004, another open competition was organized; this time for comprehensive design proposals for a cultural and touristic facility and with the offer of a contract to be signed with the winning competitor. The winning concept (Fig. 66.) was authored by Péter Kis, an architect who had already won an ideas competition for the very same site in 1994, as part of preparations for the later-cancelled EXPO. More recently, a winery project from his office was awarded the International Building of the Year in 2010 by ArchDaily in the category for industrial buildings.314 The contract was signed, but celebrations and design work didn’t last long. In 2005, following ongoing attacks by the Fidesz-led district municipality, the Ministry of Education and Culture put the project on hold. The decision was justified by the claim that the hardline modernist project was very poorly received by local residents.315 In 2007, under the pretext that with the stalled project the government risked losing

Chapter 4  The Kulturkampf Narrative. From the Hungarian Tulip Dispute to a Post-Socialist Clash of Ideologies

the idea of moving the offices of the president and the prime minister, ministries, and other governmental institutions to the Buda castle, restoring the pre-war Government district. Leftist parties and intellectuals with a more progressive worldview proposed to give the castle cultural and touristic roles. Viktor Orbán’s first government, in office between 1998 and 2002, had already examined the possibility of moving their offices to – as they put it – where the leadership of the 1000-year old-state belongs; namely to the Royal Palace in the Buda castle.310 Opponents claimed that Hungary was now a

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Fig. 65. Ferenc Cságoly’s winning competition entry from 2003.

Fig. 66. Péter Kis’ first placed scheme from 2004.

EU funds dedicated for the castle area’s rejuvenation, they started a parallel process, commissioning Tamás Mezős, then head of the Bureau of Heritage Protection (KÖH), and architect István Mányi, known for multiple refurbishment projects of historic buildings, to deliver a proposal for the former command base of national defense.316 Since the existence of a design that was selected via open competition and the commission of its authors had not been withdrawn to that date, this move was highly controversial and triggered strong opposition on the part of the architectural community. On November 13, 2007, a petition of 25 professionals was published on the internet, and it was signed by another 100 in the days after. The petition claimed that the process violated legal regulations and moral norms. It demanded that Kis’ design be realized or, if the changed circumstances did not allow this, that a new open competition be held.317 The hostile attitude of the local Fidesz faction and the collapse of the authority of the socialist-liberal government318 must have played a crucial role in the decision to abandon Kis’ competition winning project. Furthermore, even state bureaucrats disliked the project, which contributed to the Ministry deciding upon alternative proposals.319 However, open criticism and dispute made the situation unsustainable for Mezős and Mányi, who first denied their involvement and then resigned from their roles. The Budapest Chamber of Architects discussed the matter in their meeting on November 14, 2007, and ruled that Péter Kis’ office should continue with designing the project. The Ministry requested the architect revise his designs. Only a couple of months later, on February 28, 2008, Kis presented a radically altered concept at a jury meeting of the City Council’s Architecture Division (Fig. 67.).320 The airy scheme with a row of slender columns standing on top of the refurbished old walls earned the jury’s liking. Although Péter Aczél, the Fidesz-led district’s chief architect was less enthusiastic than some other colleagues,321 he also concluded that the designs could be submitted for building permission. The same year brought another twist to the story. In November, the district municipality announced that an alteration ban was in effect for the building, which would not be waived until they saw a project suitable for the castle district.322 By this time a fifth, yet again brand new version was presented by Kis with Gábor Zoboki, architect of the Palace of Arts and known for his close friendship with Viktor Orbán, as co-designer (Fig. 68.). The fact that time was passing by did not help the project. First, by the end of 2008 the government ran out of all EU-deadlines and had to reallocate the European 118

Fig. 67. Péter Kis’ revised design from 2008.

Fig. 68. Kis’ and Gábor Zoboki’s joint concept from 2008.

funding previously dedicated to the project to other accounts. This was followed by the recession starting in 2009, and by a landslide victory at the 2010 parliamentary

From Wasteland to Waste Bin: A Short-Lived Idea of a New Government District as Brownfield Development While Orbán was constantly dreaming of moving his office into the castle, Ferenc Gyurcsány’s socialist-liberal government was toying with another vision in 2007. They decided to sell the historic building stock where the Ministries were housed, mostly in the vicinity of the parliament building, and move all the facilities into a centralized modern compound, hoping to finance the project from the estimated 110-billion-forint income from the selling of the old buildings.323 After rapid feasibility studies, the western railway station’s former railyard was named as the site for the ambitious project. Preparations continued in forced march: a design competition was published and as soon as August 2, 2007 the winners were officially announced at a ceremony held in the railway station’s spacious waiting hall, designed by the office of Gustave Eiffel between 1874–1877. Prime Minister Gyurcsány, Cultural Minister István Hiller and Budapest’s mayor Gábor Demszky all attended the event. The winning proposal (Fig. 69.) was submitted by Péter Janesch and his young team, with Japanese star architect Kengo Kuma listed as design consultant. Their scheme suggested placing the government facilities in a 400-meter-long compound, outfitted with cutting edge technologies for sustainable maintenance – and with a green façade. They proposed covering the train tracks with a public green open space. The proposal included a neighborhood-scale rehabilitation of adjacent Erzsébetváros, a typical eclectic 19th century urban block quarter. The project was estimated to cost the state 150 billion forints, slightly exceeding the initially planned budget. Janesch’s design was widely applauded, and Budapest found itself at the dawn of a promising and smooth project – or so one would have guessed given the governing Socialist Party’s much-publicized intention to enter the election campaign of 2010 by officially opening the new Government Center. To meet expectations, the young design team quickly formed a company, Team0708 Ltd., rented a downtown office and started elaborating the project. Clouds began to appear over the development as in December 2007 the daily newspaper Népszabadság

Chapter 4  The Kulturkampf Narrative. From the Hungarian Tulip Dispute to a Post-Socialist Clash of Ideologies

elections of Fidesz. Orbán’s return to power also brought along the renaissance of the idea that the government should move to the castle district, which also meant a definite end for the refurbishment project, previously hallmarked by the Péter Kis saga.

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Fig. 69. Kengo Kuma and Péter Janesch’s winning project for the new government center from 2007.

leaked news that the proposed complex could not be built as planned, as not all involved plots were in the state’s ownership.324 The process of acquiring the missing parts of the puzzle was reckoned to cause a delay of more than a year – something the government was not ready to risk; or so the article reported. On January 8, 2008 the government’s spokeswoman announced the freezing of the project.325 According to the communiqué, the expected budget and the planned schedule were put in danger by unforeseen urban planning requirements326 and by the fact that only one single contractor was willing to bid for the giant development, although seven showed interest a few months earlier. Some of the big players, such as Pólus Holding – a real estate development company owned by Sándor Demján who had built the West End shopping mall and had developed the Millennial City Center327 years earlier – stayed away from the tender, claiming it was impossible to place a serious bid for a project without confirmed plans and permits.328 To make things even more complicated, the Board of Treasury Assets, the governmental body responsible for the development, refused to accept the design team’s submission of the concept plans, shifting the responsibility for the project’s failure onto the design firm created for this venture. This official refusal provoked a wave of indignation within the architecture profession, resulting in an open letter signed by 135 architects. The letter gave voice to skepticism about the government’s refusal and called the Chamber of Architects to make a public statement on the issue.329 At the beginning of 2009, about two years after the idea had been announced, and after 9.5 billion forints have been spent on rehabilitation of the site, the project’s preparations as well as the entire idea for the new Government District were officially abandoned.330 The government then decided to sell the site for development, a notion they had to give up once the real estate crisis erupted and the area’s market value dropped below the sum the state had previously paid to the Hungarian State Railways (MÁV) for acquiring it. As an ironic conclusion to the short-lived venture, the project won the Holcim Award for Sustainable Architecture 6 months after it has been called off.331 120

All the projects discussed above were cancelled by way of political decisions, albeit for reasons that were not uniform. On some occasions, the decision to drop a project was a direct response to heated ideological debates, while on other occasions it was taken as a response to budget shortages. A third group of cases comprises adventurous projects that targeted the hosting of large international events, such as world fairs and Olympic Games or other grand sports championships. These proposals were often initiated by real estate developers, construction giants, lobbyists, and investment bankers who were hoping for commissions related to the projects’ preparations and execution. Most prominent among these was Hungary’s candidacy for hosting the 1995 EXPO.

was then executive vice president – later CEO – of Hungexpo, the state-run firm responsible for organizing fairs and conferences and, simultaneously, member of the governing board of the Global Association of the Exhibition Industry (UFI). His dual affiliation confronted him with the yawning gap between the standards of international fairs and the realities of Budapest’s fairground in the district of Kőbánya.334 Körösvölgyi’s idea was to use the opportunity of a world fair to upgrade the Hungexpo fairground so that it could meet the highest international standards, including the erection of a conference center with a capacity for hosting 3,000 people.335 Unlike in the case of most world fairs that tend to run a deficit over the few months they’re open, this proposal targeted the establishment of a permanent high-end complex with the prospect of a long-term lucrative operation. The idea was that a sequence of various exhibits would serve as a continuous propaganda for the country; that is, as a display of Hungary’s national values as well as the different branches of its economy. At the end of 1981, Körösvölgyi presented a detailed feasibility study proposing a site in Óbuda, on the grounds of a former brick factory.336 The plans provoked major debate within the communist leadership. Its critics warned that the project would burden the already heavily indebted state budget with unbearable costs. Ultimately, organizing a world fair was postponed to 1995, by which time Austria, too, announced its interest in hosting an EXPO, to be integrated into Vienna’s long-term urban development strategies. In 1988, a year before the beginning of the regime change process, Károly Grósz, leader of the ruling party, stated in a radio interview upon visiting Disneyland in the United States: ‘First of all, I would not like to organize a Las Vegas in Hungary, but a Disneyland I would!’337 He went on to argue that if Hungary and Austria were to jointly hold the world fair in 1995, the pavilions in Budapest could be built in such a way that a local Disneyland could already launch its operations before the EXPO and continue to expand afterwards. Both the idea of developing the first European Disneyland and co-organizing the world fair were seen as an opportunity to create an image, for the western world, of a progressive regime. In November of the same year, premier Miklós Németh and Austrian chancellor Franz Vranitzky announced that Vienna

Chapter 4  The Kulturkampf Narrative. From the Hungarian Tulip Dispute to a Post-Socialist Clash of Ideologies

Bridges to Nowhere: The Never Held ­Budapest World Fair After having organized a millennial fair in 1896 celebrating the 1000-year anniversary of the Carpathian Basin’s conquest by the Hungarians, the idea of holding world expositions in Budapest recurred time and again throughout the 20th century. In 1981, the communist government started seriously considering the option of organizing a ‘category-B’332 world fair for agriculture, food industry, and forestry.333 László Körösvölgyi

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and Budapest would jointly apply to host the 1995 world exposition, titled ‘Bridges to the Future’. In the spring of 1988 Bechtel, an American company commissioned with making feasibility studies, announced that its conclusions were positive and Buváti, a state-run planning agency, published a list of possible sites for the event. The government’s EXPO committee ended up selecting a suburban location near the mass housing satellite neighborhood of Gazdagrét and close to where the Vienna-bound highway exits Budapest. Soon after the free elections, a political conflict broke out around the issue of the EXPO between the two strongest political forces; the Hungarian Democratic Forum – the leading force of the governing coalition – and the liberal Alliance of Free Democrats, the largest opposition party338. While the Forum, with the backing of the former state party now in opposition, stuck to the idea of hosting the fair, the Free Democrats, supported by Fidesz, then a liberal-leaning youth party, opposed the project, appealing to the fragility of the budget and the stalling national economy – the first inherited from the communist government, the second a result of the economic transformation shock. The situation was further complicated by the fact that the Free Democrats and Fidesz won a majority in Budapest at the first free municipal elections, held in October of 1990339, and Gábor Demszky, elected as mayor of Budapest, was rather skeptical about the venture.340 In 1991, the development of the story took a dramatic twist as Austria announced its withdrawal from the 1995 world fair. This decision was made unavoidable by a referendum held in Vienna where a strong majority rejected organizing the EXPO.341 Somewhat surprisingly, neither the decision nor the Austrians’ arguments of a foreseeable financial deficit deterred the economically much weaker Hungarian partner from sticking to the project, now as an only host. The only modification made affected the target date, as additional time was needed for adapting to the changed circumstances. An unbending will to host the EXPO and a 1996 date were fixed by the 1991 Law on hosting the 1996 world fair.342 A competition was organized the same year where, among others, the urban planner Károly Polónyi presented his scheme of orienting the EXPO to the Danube.343 Back in 1959, soon before joining Team 10, Polónyi published – together with Pál Granasztói – a study entitled ‘Budapest Tomorrow’.344 The study was decidedly critical of the official conception of city development, and the authors only managed to evade the wrath of the authorities by getting a sympathetic journalist to write a positive review article in a party newspaper. Already by then, Polónyi was advocating that the city should be organized around the river and identified southern Buda areas, sites later proposed for the 1996 EXPO, as a possible exhibition ground (Fig. 70.). Internationally, Polónyi was better known for his projects from the 1970s in Africa, such as the Revolution Square in Addis-Ababa. From 1969 onwards, he was in charge of a large Hungarian-Nigerian team commissioned with planning Calabar, the new capital of Nigeria’s South-Eastern state. From 1980 onwards Polónyi was organizing international courses at the Technical University Budapest, with lectures and studios held in English. His friends from Team X gave guest lectures and taught design courses. He also started an international summer school in a baroque castle at the town of Ráckeve near Budapest. In 1983, the topic of the summer school was the role of the architect in the development of Ráckeve and the Hungarian Model of Agriculture; in 1985 Polónyi chose the theme ‘Acupuncture instead of chirurgy in urbanism: the strategy of minimal intervention’. In 1987 122

Fig. 70. Polónyi’s Proposal for Budapest’s urban structure from 1959. Note the label ‘kiállítás’ (fair) in the city’s south.

Fig. 71. The city organized around the Danube: Polónyi’s visualization of the riverbank from 1959.

the area near the tomb of a Turkish warring dervish Gül Baba; still a pilgrimage site for Muslims. Strengthening the ties of the Hungarian capital to the Danube, raising the importance of local boat traffic, and developing the riverbanks constituted a leitmotif of Polónyi’s work from the beginning on. Polónyi reached back to this idea in his competition entry for the 1996 EXPO and proposed a scheme that would have involved barges and activated the riverbanks of southern Budapest. Interestingly, while being a protagonist of the EXPO preparations, Polónyi also belonged to the professional burr of the Alliance of Free Democrats, the liberal party opposing the EXPO adventure. In 1992, the government’s high commissioner mandated the planning bureau VÁTI with delivering the master plans for the southern Budapest site, which they submitted the following year (Fig. 74.). The plans included sketchy proposals for possible re-utilization as office and residential, mixed-use buildings on the Pest side and as education campus on the Buda side. Gábor Turányi’s design was selected for the Hungarian pavilion, and preparations continued at full pace. However, the project’s history continued to be nothing short of dramatic junctures. The Christian-nationalist coalition lost the 1994 parliamentary elections, and in November of the same year the new socialist-liberal government withdrew the Hungarian bid for hosting the world fair in 1996 as part of an austerity package, made unavoidable by spiraling budgetary deficits.345 The EXPO was gone but debates remained intense and flare up every now and then, most recently in the last few years, as Budapest officially announced its candidacy for hosting the Olympic Games in 2024.346 Imre ­Makovecz, who also designed pavilions and a boat-theatre for the EXPO in 1993, claimed that he had not heard serious financial arguments against the EXPO project – all the objections were merely political slogans. He attributed the critical voices to global capitalist tycoons and suggested that organizing the fair would have been an important

Chapter 4  The Kulturkampf Narrative. From the Hungarian Tulip Dispute to a Post-Socialist Clash of Ideologies

the school – which included the English architects Alison and Peter Smithson – chartered a boat, which was anchored near St. Margaret Island in Budapest, to develop proposals for

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stepping stone for the indebted country in introducing what he called an ‘alternative market economy’.347 In contrast, the EXPO’s critics claimed that had the event been held, it would have disproportionately burdened the public finances at a time of serious economic difficulties.348 The decontamination and utilization of the designated EXPO-sites in southern Budapest started according to the original plans. In 1996, the government founded ‘IT Innovation Park’ Inc., a company fully owned by the state and having as its mission the development of a campus for computer sciences on the Buda side, housing university facilities and knowledge-intensive IT businesses. The areas on the Pest side were sold to a private investor who later developed mixed-use projects with office and housing functions as well as key cultural facilities, namely the National Theater349 and the Palace of Arts, 350 the latter two built in a private-public-partnership. As the frustrated public projects described above illustrate, the ideological clash between the political right and left, and between the populist and urbanist factions of the intelli-

Fig. 72. Concept for the EXPO area by Károly Polónyi and his team, submitted at the 1991 design competition.

Fig. 73. Polónyi’s ‘EXPO on barges’ design from 1991.

Fig. 74. Master plan of the proposed EXPO area in southern Pest (VÁTI, 1993).

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gentsia, continued to mark Hungary’s post-socialist development. Back in the 1970s, the Tulip Dispute’s logic had also derived from this broader ideological controversy and it contributed to perpetuating the standoff. In that debate, mainstream architects had accused the Pécs Group of antimodernism, while its supporters had stigmatized their critics as promoters of socialist nihilism. This did not allow for a rational debate on the production of habitat – which being a politically sensitive topic would not have been in the powerholders’ interest either. Deep cultural and ideological rifts, mostly left over from the prewar period, were not allowed to be openly discussed in socialist Hungary. Ironically, the outbreak of a stormy Kulturkampf after the regime change didn’t leave room for confronting past conflicts in a pragmatic discourse either.

historical background

systemic transformation

symptom-group

lack of consensus on symbolic projects and urban visions

suppressed ideological cleavages

conspicuous scarcity of large-scale public projects of cultural and symbolic significance

pre-socialist cleavages emergence of a populist fraction of architects, pushed towards the periphery absence of significant top-down restructuring of the city (land-use, infrastructure, etc.)

outburst of a kulturkampf polarizing the intelligentsia

urban development mostly characterized by businessdominated development projects not integrated into any grand urban design

1947-1989

1989-1990

1990-2010

Fig. 75. The formal scheme of the Kulturkampf Narrative. See page 132 for the abstract model’s combined and ­detailed scheme.

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253 The nexus between the Tulip Dispute and the post-socialist Kulturkampf appeared in 2016 in: Daniel Kiss, ‘From the Hungarian Tulip Dispute to a Post-Socialist Kulturkampf’, in Re-Framing Identities, Architecture’s Turn to History, 1970 –1990. Eds. Ákos Moravánszky, Torsten Lange. Basel: Birkhäuser, 2016, 105 –18 .  254 The housing complex at Etele út 15 –25 was constructed between 1965 and 1966.  255 In 1946, the French company “Camus” developed a panel-based construction system for postwar reconstruction, utilized widely in France from the 1950 s and later exported to the Soviet Union. The Hungarian leadership acquired the Soviet adaptation in 1963 and commissioned a team of engineers lead by Jenő Gilyén to further develop it. Almost eight hundred thousand apartments were then built with prefabricated panel systems, including the Danish Larsen-Nielsen technology from the 1970 s on. On mass housing in Budapest see Gábor Preisich, Budapest városépítésének története 1945 –1990 (Budapest: Műszaki Könyvkiadó, 1998); on the typologies of Hungarian mass housing see György Fátrai, ‘Funkcionalista és konstruktivista építészet’, in György Fátrai, Épített örökségünk (Budapest: Digitális Tankönyvtár, 2011).  256  Mariann Simon, ‘Minták és módszerek. A hetvenes évek hazai építészete és a karakter’ [Samples and Methods. The Architecture of the 70 s and Character], Építés – Építészettudomány 29, no. 3 –4 (2001): 347–60.  257 István Janáky, ‘Magyarország két építészete’, in A hely: Janáky István épületei, rajzai és írásai, ed. Judit Lévai-Kanyó (Budapest: Műszaki Könyvkiadó, 1999), 79 –85 (81).  258 See note 32 above. Also see György Berkovits, Világváros határában (Budapest: Szépirodalmi Könyvkiadó, 1976).  259 Molnár, Building the State, 115.  260  György Csete, Tibor Jankovics, Péter Oltai, ‘Csak tiszta forrásból’ [Only From Pure Sources] (The Pécs Group’s Exhibition and Lectures, Fészek Galéria, Budapest, February  27–March  8 , 1973); György Csete, ‘Anyanyelvünkön beszélünk-e építészetünkben?’ [Are We Talking in our Mother Tongue in our Architecture?], Művészet 14 , no. 9 (1973): 12–3. (‘Only from pure sources’ is a citation from Bartók’s Cantata Profana.) 261 Molnár, Building the State, 23.  262  E. g., Jeffrey Cook, Seeking Structure from Nature: The Organic Architecture of Hungary (Basel: Birkhäuser, 1995).  263  Ákos Moravánszky, ‘Piercing the Wall: East-West Encounters in Architecture, 1970 –1990 ’, in Re-Framing Identities: Architecture’s Turn to History, 1970 –1990, eds. Ákos Moravánszky, Torsten Lange (Basel: Birkhäuser, 2016), 27–44 (36). The term was used by Moravánszky to describe Máté Major’s character.  264 Molnár, Building the State, 120.  265  Máté Major, ‘Itt a tulipán!’, Élet és Irodalom, October 11, 1975.  266  E. g., Ká­ roly Weichinger, ‘A paksi lakóházakról’, Magyar Építőművészet 2 (1976), 60.  267 Dezső Cserba, ‘Más nagypanelt – más tulipánt!’, Magyar Építőművészet 2 (1976): 61–2 .  268  Gábor Preisich, ‘Modernség’, Élet és Irodalom, November  8 , 1975.  269  Katalin Berey, ‘Nemzeti ihletésű építészetet!’, Élet és Irodalom, October 25 , 1975.  270  László Nagy, ‘Hol a tulipán?’, Élet és Irodalom, October  4 , 1975 .  271 Katalin Simon, ‘A tulipán-vita. Lakótelep – humánum – organikus építészet’ [The Tulip-Dispute. Mass Housing – Humanity – Organic Architecture], Iskolakultúra 6 (2006): 13 –27 (25).  272 Ibid.,

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25 –6; see also András Ferkai, ‘Építészet a második világháború után’ [Architecture after World War II], in Magyarország építészetének története, eds. József Sisa and Dora Wiebenson (Budapest: Vince Kiadó, 1998), 275 –304 .  273  Krisztina Fehérváry, Politics in Color and Concrete: Socialist Materialities and the Middle Class in Hungary (Bloomington: Indiana University Press, 2013), 147; see also Jonathan Glancey, ‘Imre Makovecz and Corvina Muterem’, Architectural Review 3 (1981): 152–6 .  274  Imre Makovecz, ‘In the Search of a Hungarian Architectural Identity’, The New Hungarian Quarterly 4 (1985): 225; see also Imre Makovecz, ‘Kérdések a szerves építészetről’ [Questions Concerning Organic Architecture], Országépítő 4 (1993): 10.  275  Tamás Turai, ‘Az Új Írás’, Beszélő 2, no. 3 (1997 ), accessed May 28 , 2017, http:// beszelo.c3 .hu/cikkek/az-uj-iras  276 The debate commenced with the poet Mihály Váci reflecting on the relationship between the boring Hungarian consumer society and the socialist movement’s original goals in the periodical Új Írás in 1961, followed by nearly one hundred and thirty different contributions.  277  This polarization was most visible in the 1930 s literary scene after the so-called second generation of the journal Nyugat split into two ideological camps. Progressive, cosmopolitan writers and poets such as Tibor Déry, Ferenc Fejtő, and Attila József, centered around the cultural review Szép Szó, confronted by a group of populists led by Gyula Illyés and László Németh, who published their own periodical, Válasz.  278 Kis, Az összetorlódott idő, 124 .  279  Mihály Vargha, ‘Das Jahr der Schmetterlinge. Ungarische Architekturträume’ [The Year of the Butterflies. Hungarian Architectural Dreams], Daidalos Architektur Kunst Kultur 39 (1991): 42–9 (43).  280 István Janáky, Az építészeti szépség rejtekei Magyarországon (Budapest: TERC Szakkönyvkiadó, 2004).  281 Janáky wrote on July 6 , 2011 that ‘(m)aterial records of ancient historical times are rare and therefore enable the wizard drawers to utilize their fantasy in their illustrations to their […] financial advantage. Well, this is what Arcadia’s decorators fib about as being the pure source!’ (translated by the author). István Janáky, ‘Levelek Arkádiából’, Építészfórum, November  16, 2011.  282  Introduction of the new architecture magazine A/3 at Tölgyfa Galéria, July 8 , 1990. The host was Dezső Ekler, a leading figure in Makovecz’s group, while the magazine was recommended by architect Gábor Turányi and architecture historian András Ferkai.  283  István Janáky, ’Prelúdium és fúga’, Élet és Irodalom, October 5 , 1990.  284 It was probably his 2011 talk ‘Levelek Arkádiából’ that had the biggest resonance as it was given soon after Makovecz’s death – though written earlier – and declared the recently deceased architect to be responsible for Hungary’s visual pollution and called him and his followers as decoration designers. See note 281 above.  285  ‘Makovecz a Jóisten szórakoztatására tervez új Gellért-hegyet’, accessed December 18 , 2016, http:// index.hu/kultur/klassz/mako0407  286 ‘Az országépítő Makovecz Imre’ (Imre Makovecz interviewed by Pál Molnár at a book-launch in Éghajlat Könyves Kávézó, Budapest, November 23, 2005), accessed January 18 , 2017, http:// www.ma.hu/tart/rcikk/a/0/134633 /1  287 Vince Károly Kölesy, Jakab Melczer, Nemzeti Plutarkus vagy a Magyar­

Chapter 4  The Kulturkampf Narrative. From the Hungarian Tulip Dispute to a Post-Socialist Clash of Ideologies

ország s vele egyesült tartományok nevezetes férfiainak party which, at the time, held the Ministry of Culture reéletleírásaik (Pest: Trattner János Tamás Nyomdája, 1814).  sponsible for coaching the National Theater project. In an 288  Miklós Markó, ‘Közhasznú építkezések’ [Constructions interview with the author, October 22 , 2016.  301  As a of Public Utility], Budapesti Negyed 10. (4 /1995), ac- comparison, 33 entries were registered in 1913, 92 in 1965 19 , 2016 , http://epa.oszk.hu/­and just 32 in 1989.  302  Mihály Vargha, Bán Ferenc színcessed December  00000/­0 0003 /00009/kozhasz.htm  289 In the years háza – Egy terv felidézése [Bán Ferenc’s Theater – The 1900 – 1906 .  290  See note 285 above.  291  After Evocation of a Design], (Budapest: Arturia Bt., 1999).  ­Makovecz’s death, the Orbán-government also contem- 303 On the National Theater saga see Mihály Vargha, plated building one of his unrealized churches in Buda- ‘Kudarc-sztori’, Építészfórum, July 13 , 2000, accessed pest; decided upon looking after his oeuvre and gave an September 9, 2015, http://epiteszforum.hu/kudarc-sztori.  official state title and a generous budget to his Hungarian 304  Minister of Culture József Hámori declared that the Academy of Arts. Accessed December  18 , 2016 , government will announce a new competition. Accessed http:// 444 .hu/­2 013 /­1 0 / 20 /el-nem-keszult-makovecz-­ January  09, 2017, http://beszelo.c3 .hu/cikkek/kronoloepuleteket-­epitene-a-kormany/  292 ‘Ötletpályázat Bu- gia---1998  305 Translates as ‘City Grove’. 306 See dapest új építészeti jeleire’, accessed December  19, 2016, note 303 above.  307 Ibid. 308 Ibid. 309 Ibid. 310 ‘The http://epiteszforum.hu/otletpalyazat-budapest-uj-­ palace will again be the most important symbol of thouepiteszeti-­jeleire; ‘Fantáziaképek egy fantáziátlan város- sand-year-old Hungary both in a public-law and sacred ban – Budapesti szimbólumpályázat’ accessed Decem- sense’ (translated by the author), Zsuzsa Hernádi, András ber 19, 2016, http://szeretembudapestet.hu/kategoriak/ Bencsik, ‘Budavár feltámad halottaiból’, Demokrata, hirek/­s zeresd-budapestet-palyazat  293  ‘Gellérthegy April 3, 2015, accessed September  15, 2015, http://www. Pályázat’, accessed December 19, 2016, http://gellerth- d e m o k r a t a . h u /c i k k / b u d a va r- fe l t a m a d - h a l o t t a i egypalyazat.hu  294  Entry number 48 , accessed Decem- bol  311  E. g., Imre Pákozdi, ‘A Városliget kulcsa a Várban ber  19 , 2016 , http://gellerthegypalyazat.hu/ered- van. A Budai Vár és a Városliget összefüggéseiről’ (paper menyek/48  295  Atelier Fellner & Helmer was founded in presented at the forum ‘Városliget-Város-Vár’, organized 1873 by the architects Ferdinand Fellner d. J. (1847–1916) by the Hungarian Society for Urban Planning, Budapest, and Hermann Helmer (1849 –1919). Capitalizing from the June  3 , 2014).  312 Andor Wesselényi-Garay, ‘Amikor boom around the turn of the centuries, they specialized megdöglik a sárkány’, accessed October 9, 2011, http:// in building theaters in the Austro-Hungarian Monarchy wergida.blogspot.com/ 2007/11/amikor-megdglik-srkny-i. and elsewhere in Europe. They were involved in the con- html  313  Their proposal, together with those by Török és struction of 48 theater buidings, opera houses and con- Balázs Építészeti Kft. and TAAT Kft., received joint first cert halls. They are also the architects of the opera (1891) prize. Accessed January 10, 2017, http://epiteszforum. and the Tonhalle (1895) in Zurich.  296  There is, however, hu/a-volt-honvedelmi-miniszterium-tombjenek-felujievidence that the reasons were mainly of an economic tasara-atepitesere-meghirdetett-epiteszeti-otletpalnature. The old theater building was both delapidated and yazat-eredmenye  314 ‘Laposa Winery / Peter Kis’, acoutmoded. Instead of funding a renovation, the Commu- cessed November  8 , 2011 , http://www.archdaily. nist Party’s Politbureau decided upon building a new the- com/ 76960 /laposa-winery-atelier-peter-kis  315 Nóra ater between 1965 and 1970 as a replacement. See Orso- Somlyódi, ‘Ötmilliárd uniós forint pályázat nélkül – Romellya Ring, ’50 éve határoztak a Nemzeti Színház takarítás’, Magyar Narancs 19, no. 44 , accessed April 13, lebontásáról’ [The Decision of Demolishing the National 2017, http://magyarnarancs.hu/belpol/otmilliard_unios_ Theater is 50 Years Old], Magyar Nemzeti Levéltár Archívu- forint_palyazat_ nelkul_-_romeltakaritas-67863   316 ‘A ma (2014), accessed May 8 , 2017, http://mnl.gov.hu/a_ Szent György tér rendezése a Várban’, accessed Januhet_dokumentuma/a_blaha_lujza_teri_nemzeti_szinhaz_ ary 16, 2017, http://fovarosi.blog.hu/2008 /01/02 /szent_ lebontasa.html?page=1#kapcs_anyagok  297 A total of gyorgy_ter  317 ‘Nyílt levél a “Budavár – Dísz tér 17.” 92 entries were handed in, comprising 36 Hungarian, 11 építészeti tervpályázat “utóélete” kapcsán’, accessed OcPolish, 11 East German, 10 Czechoslovak, 6 Yugoslav, and tober 9, 2011, http://epiteszforum.hu/nyilt-level-a-buda1 Bulgarian project, as well as 17 designs from the Soviet var-disz-ter-17-epiteszeti-tervpalyazat-utoelete-kapcsan  Union. Accessed January 13 , 2017, http://fovarosi.blog. 318  The government lost its popularity due to the fact hu/2016 /01/21/otven_eve_irtak_1966_januar  298 Ibid. that immediately after it won the elections in the spring While Hofer and his collegaues from the bureau KÖZTI of 2006 on the grounds of campaign promises of an exwon joint-second prize, shared with the Polish team of pansion of welfare spending, it announced an austerity Jan Boguslawski and Bogdan Gniewiewski. KÖZTI ended package, and three months later the recordings of a seup receiving the commission as no first prize was award- cret speech held by prime minister Gyurcsány to the Soed. As the daily newspaper Népszabadság reported on cialist parliamentary group, in which he bluntly declared January 22, 1966, the jury found the new theater’s ap- that they had lied to the public, were leaked.  319 Andor pearance to be a ‘typically Hungarian theater building’ Wesselényi-Garay, ‘Amikor mindenki lefalcol - Megdöglik and stressed the importance of its townscape im- a sárkány’, accessed October  5, 2011, http://wergida.blogpact.  299 Miklós Hofer, Ferenc Kerényi, Bálint Magyar, spot.com/ 2007/ 11 /amikor-mindenki-lefalcol-megdgEdit Mályuszné Császár, György Székely, László Vámos, A lik-srkny.html  320  ‘Csont nélkül – a Szent György téri terv nemzeti színház 150 éve [150 Years of National Theater] újabb verziója’, accessed September 10, 2011, http://epi(Budapest: Gondolat Kiadó, 1987 ).  300 János Kis re- teszforum.hu/nyomtatas/csont-nelkul-a-szent-gyorgymembered the internal disagreements within the liberal teri-terv-ujabb-verzioja  321 Jenő Kapy, for example,

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praised the project as the most successful version ever prepared for the site. See note 320 above.  322 ‘Kútba eshet a Budavári Palota rehabilitációja’, accessed January 17, 2017, http://index.hu/belfold/budapest/war1113 /  323 ‘Lefújták a kormányzati negyedet’, accessed March  10, 2017, http://index.hu/belfold/knegyed1170/  324 Anna Szalai, ‘Satuban a kormánynegyed terve’, Népszabadság, December  5, 2007. As Népszabadság was shut down following its acquisition by a holding supposedly close to the ruling Fidesz party, the article is only available as quoted by the portal Építészfórum, accessed March  10, 2017, http://epiteszforum.hu/nem-epulhetmeg-a-gyoztes-epiteszeti-tervek-alapjan-az-uj-kormanynegyed-irja-a-nepszabadsag  325 See note 323 above.  326  The project had been criticized for its initial plans reducing the task of creating the government district to the erection of a series of office buildings, whereas the whole neighborhood and its infrastructure, already overloaded by traffic, had to be redeveloped until the project deadline of June 2009. Neither the state nor the city government was willing to bear the costs of this operation. See for example: Nóra Somlyódi, ‘A kormányzati negyed bukása. Dobják a zöldet’, Magyar Narancs 1 (2008), accessed March 10, 2017, http://magyarnarancs. hu/belpol/a_kormanyzati_negyed_bukasa_-_dobjak_a_ zoldet-68117  327 See more on Budapest’s major post-socialist investor projects in Chapter 2 , 36 –48 .  328  Ibid. The fact that Demján stayed away is interesting given that one of his companies, TriGránit, held a right of pre-emption for some of the sites concerned, in connection to their development of the West End City Center along the rail tracks.  329 ‘Nyílt levél – a Kormányzati Negyed (KN) építészeti tervezésének szakmafelügyeleti anomáliái kapcsán’, Építészfórum, February 5, 2008 , accessed March 13 , 2017, http://epiteszforum.hu/nyilt-leve l - a - ko r m a n y z a t i - n e g y e d - k n - e p i t e s ze t i - t e r v e zesenek-szakmafelugyeleti-anomaliai-kapcsan  330 See for example: ‘Befulladt budapesti nagyberuházások’, accessed March 13 , 2017, http://www.team0910.hu/sajto/15 /190 #1280  331 The award-giving ceremony took place in Madrid on September 25, 2008 . ‘A Kormányzati negyed terve a Holcim Awards nyertese’, Építészfórum, September 26, 2008, accessed March  10, 2017, http://epiteszforum.hu/a-kormanyzati-negyed-terve-a-holcimawards-nyertese  332  The ‘Bureau International des Expositions’, which has been organizing world fairs since 1928 , introduced the term ‘category A’ for universal expositions lasting six months and ‘category B’ for themed expositions lasting three months.  333  The fair was suggested with the title Agrofoodfor ’90 and was to be held in 1990.  334  The Hungexpo fairground moved from the urban park ‘Városliget’ to its current location in 1971 on the occasion of a hunting exposition that year.  335 Mihály Vargha, ‘Elcsábítva és elhagyatva (Az EXPO építészei)’ [Seduced and Abandoned (The EXPO’s Architects)], Budapesti Negyed 5, (1997/4), accessed December 12, 2016, http://old.bparchiv.hu/id-263 -vargha_mihaly_elcsabitva_ es_ elhagyatva.html  336  György Halmos, ‘Egy elmaradt

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világkiállítás előzményei avagy a lényeg eltűnése’ [Antecedents of a Cancelled World Fair or the Disappearance of the Essence], Építés, Felújítás, special issue for the construction fair ‘Construma’ (1995), 8 .  337 András Mink, ‘Grósznoszty’, Beszélő 4 , No. 9 (1999). Accessed May 27, 2017, http://beszelo.c3 .hu/cikkek/grosznoszty  338 The first free parliamentary elections, held on March 25 and April  4 , 1990, were won by the Christian-conservative Hungarian Democratic Forum (MDF), who formed a government with the Smallholders’ Party (FKGP) and the Christian Democrats (KDNP). The opposition’s biggest force, and runner up at the elections, was the left-liberal Alliance of Free Democrats (SZDSZ). The socialist regime’s successor party (MSZP) saw the EXPO project as their own and hoped to carry it on, while the governing parties treated the initiative as a potential manifestation of national pride.  339  ‘Önkormányzati választás – Választási térképek’, accessed December 07, 2016, http://www.vis i o n p o l i t i c s . h u / i n d e x . p h p ? p a g e = o l d a l & c i k k = 4 9  340  János Eörsi, ‘Képtelen magyar expótörténet’, Beszélő 5, no. 5 (1995), accessed May 8 , 2017, http://beszelo.c3. hu/cikkek/keptelen-magyar-expotortenet  341  The referendum was held between 14 and 16 May  1991 and resulted in 65 % rejecting a world fair to be organized in Vienna in 1995 . ‘Beispiele direkter Demokratie: Wiener Volksbefragungen’, accessed December 7, 2016, http:// w w w. d e m o k r a t i e ze n t r u m . o rg / t h e m e n /d i re kte-demokratie/direkte-demokratie-in-wien/wiener-volksbefragungen.html  342 Act LXXV/1991 (December 18).  343  International competition for the EXPO’s master plan (Budapest: Világkiállítási Programiroda, 1991).  344 Pál Granasztói, Károly Polónyi, Budapest Holnap [Budapest Tomorrow] (Budapest: Gondolat Kiadó, 1959).  345 Act LXX/1994 (November 8).  346  This candidacy, too, was withdrawn, after the state having spent some 37 billion forints (approximately 120 million Euros) on the preparations. In February  2017, a new political formation, Momentum Mozgalom, collected 260,000 signatures from residents of Budapest, asking for a referendum on the candidacy. In order to avoid a clear political defeat, prime minister Viktor Orbán decided to withdraw his pet project. János Botond Csepregi, ‘Már 37 milliárdnál járnak az olimpiai pályázat költségei’, Magyar Narancs, February  1, 2017, accessed March  9, 2017, http://magyarnarancs.hu/belpol/ m a r- 3 7 - m i l l i a rd n a l - j a r n a k- a z- o l i m p i a i - p a l ya za tkoltsegei-102406; Dániel Bita, Márta Kovács, ‘Visszalép Magyarország a budapesti olimpiai pályázattól’, accessed March 9, 2017, http://24 .hu/belfold/2017/ 02 /22 /visszalep-magyarorszag-a-budapesti-olimpiai-palyazattol  347  István Bakos, ‘Álmok és remények’, magyarhirlap.hu, April 22, 2015, accessed December  14, 2016, http://magy­ arhirlap.hu/cikk/22988 /Almok_es_remenyek  348  As also stated in the intorductory paragraph of the law on Hungary’s withdrawal from hosting the 1996 world fair. Act LXX/1994 (November 8).  349  See more on the National Theater’s development earlier in this Chapter, 109 –16.  350  See more on the Millenial City Center’s development in Chapter 2, 44 . 

Chapter 5  The Abstract Model and its Formal Scheme. A Systemic Explanation

Chapter 5  The Abstract Model and its Formal Scheme A Systemic Explanation

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This book started out from the observation that the phenomena characterizing Budapest’s recent urbanization and provided by everyday experience, converge towards forming a pattern. We assumed that the syndrome in question is not a random collection of mutually independent facts but has to do with systematic background factors capable of describing both the interrelations between the different phenomena and the nexus between historical legacies, characteristics of the systemic change in 1989–1990, and the production of space following it. Thus, the story of Budapest’s post-socialist urban transformation is not a mere sequence of contingent events, but finds its place in and is explained with the help of general structures. This hypothesis has led to the construction of three explanatory building blocks, each establishing links between particular historical background conditions and the syndrome of Budapest’s recent urbanization. These factors and their explanatory relationships are presented as verbal narratives. Rather conspicuously, in spite of having three distinct starting points, all narratives pointed towards the same syndrome. No matter whether one begins with socialism’s monolithic power geometry, the internal tensions of socialist urbanization or the ideological divisions suppressed by the regime, the narrative leads to the very same combination of effects in the post-socialist production of space. Rather than extinguishing each other’s effects, the three narratives describe mutually supportive stories and constitute a systemic interpretation of the changes characteristic of the relevant period under investigation. Their interrelations also become visible in the univocal cross-relations between some of their elements. For example: socialist urbanization’s irrational land-use was not only accountable for deterioration in the second urban belt. Fragmentation of ownership and spatial segregation, both triggered by the massive post-socialist alienation of housing, as well as a counterproductive redistribution of privatization income, benefiting wealthier districts, have also long hampered these neighborhoods’ valorization. Thus, the Socialist Urban Legacy and Decentralization Narratives overlap here and point towards convergent outcomes that can be described as urban development generated by market forces and private demand, and lacking coherent visions on how the city should evolve. As another example, we can cite the dysfunctionality of urban planning in the years following the regime change. This can be explained by the combination of cutback of municipal planning departments – a belt-tightening in response to the transformation crisis and the following budget deficits – and political decentralization, resulting in lack of clarity in the division of competence. Again, the Socialist Urban Legacy and Decentralization Narratives mingle and jointly point towards the syndrome of Budapest’s post-socialist urbanization. This brief synthesis will provide a formal scheme of the way the different building blocks and their implications interact as a whole. The scheme is meant to serve as a visual aid to facilitate the grasping of the model, which is informal and therefore less easily manageable. Before doing that, let me anticipate and dissolve a possible misunderstanding concerning the aims and ambitions of the visual scheme I am about to outline. Graphic figures might, misleadingly, suggest that the model they visualize claims to be closed and complete, and claims to provide a holistic interpretation of the 130

Fig. 76. (next page). The abstract model's formal scheme.

Chapter 5  The Abstract Model and its Formal Scheme. A Systemic Explanation

era under investigation. Such assertions are, however, alien to the model developed in this book. What it aims to accomplish is to provide a wide interpretative framework that can then be filled in with specific explanatory factors or micro-narratives. In no case should the scheme below be understood as an exhaustive account of the model built in the previous chapters. It is not meant to replace the account of the historic unfolding of our story in its particulars (see, for example, the long history of the populist-urbanist Kulturkampf described in some detail in Chapter 4) or the many microcases of which this book will be able to reconstruct in full only one; the case of the Corvin-Quarter development to be discussed in Chapter 6.

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historical background

systemic transformation

monolithic power geometry all collective decisions in a single, unified hierarchy

suppressed ideological cleavages pre-socialist cleavages emergence of a populist fraction of architects, pushed towards the periphery unusually rapid systemic transformation tensions of socialist urbanization

excessive decentralizaiton

underurbanization

transformation crisis, collapse of the industry, severe budget shortages

premature welfare system of the paternalistic state

outburst of a kulturkampf polarizing the intelligentsia

administrative allocation of housing generating housing inequalities irrational land use despite centralized spatial planning constant expansion drive resulting in shortages of space

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1947-1989

1989-1990

symptom-group

new, decentralized municipal regime

weak municipal governments

two-tier municipality with autonomous districts

resource shortages

unclear division of competences

lack of consensus on symbolic projects and urban visions

new property regime

public hand unable to keep structural changes under control

‘overnight’ privatization of housing to tenants introduction of land values

slowly adapting urban planning regime

conspicuous scarcity of large-scale public projects of cultural and symbolic significance

municipalities engaging in cooperation with private investors

structural transformation trends

absence of significant top-down restructuring of the city (land-use, infrastructure, etc.)

cutback of planning departments, outsourcing of planning tasks unchanged modus operandi of planning

massive suburbanization

retroactive urban planning

investor urbanism: spreading of introverted cluster developments

counterproductive subsidization of urban renewal

district renewal without bursting the limits of inherited urban structures

1990-2010

urban development mostly characterized by business-dominated development projects not integrated into any grand urban design

Chapter 6  The Corvin-Quarter. Emergence of an ‘Absolutely Best Plan’ in the Backdrop of Post-Socialist T ­ ransformation

Chapter 6  The Corvin-Quarter Emergence of an ‘Absolutely Best Plan’ in the Backdrop of Post-Socialist ­Transformation

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The general model discussed in the previous chapters provides a picture of macro-­ level interaction among the factors responsible for the features of post-socialist urban architecture in Budapest. This chapter will be dedicated to a micro-level case study aiming to test this model. I used the following criteria for selecting the case under investigation. Firstly, it seemed reasonable to select a case that falls into the category of ‘investor compound’, an urban development type characterizing the post-socialist transformation in Budapest’s second belt. These are single projects, planned and built by one investor, or alternatively by an investment group founded specifically for a particular development. They are always mixeduse, mostly with retail – though sometimes cultural – units as their core element, complemented by housing and offices. Their financial model is either fully based on private investment or they are realized in public private partnerships. The emerging urban structures are introverted types, usually organized around a central, and controlled, semi-public space. These projects are to be found exclusively in the vicinity of Budapest’s second ring, an area still central yet including relatively large spaces for new development in the 1990s and 2000s in the form of post-industrial brown fields and structurally weak, deteriorated neighborhoods. Secondly, the case in question is the youngest in a line of similar developments. Accordingly, one can assume that experience and know-how from previous projects was accumulated both by private developers and the authorities. Thus, the selected project can also be evaluated for its innovative capacities and performances. Thirdly, it is the only case so far where the local municipality integrated a private developer grand project into its district renewal program.351 In sum, the particular development I am going to describe and analyze unites the two most important post-socialist inner-city urban transformation types; the investor compound and blockscale neighborhood renewal. Furthermore, it is also unique for the independent body, founded jointly by the district and city municipalities, being in charge of the district’s renewal and, consequently, being responsible for carrying out the development project under investigation. Although some of Budapest’s other districts have also had subsidiaries that managed their real estate portfolios and – to some extent – their renewal programs, the one in the 8th district was the only company not only involved in planning but also in the execution of the neighborhoods’ renewal.352 There are three well-known ways in which the participation of public authorities in the workings of the market may distort the processes. In the first version, public interference disrupts the market mechanisms. In the second, the authorities engage in cooperative relationships with private companies in ways that give rise to corruption. The third comes about when the public hand takes a laissez-faire attitude towards private projects. The case under investigation reveals the possibility of a fourth way. Even if the public agencies engage in active cooperation with the private developers and their interaction is free of corruption, the authorities may lack sufficient resources and/or the division of responsibilities and competences between them; their partner may be vaguely defined and/or it may come to a political standoff on the public side: such factors may result in the private actor gaining the upper hand, leading to unintended and undesirable consequences or to the failure of the public authorities to reach their goals. 136

The aim of this chapter is to show how the macro-level narratives materialized in a particular project and how they determined its outcome. It will also further specify the model and organize, with the model’s help, the empirical data from the practice of local politics, administration, and planning into a meaningful story.

Budapest’s 8th district comprises some of the city’s poorest and structurally weakest neighborhoods. The district’s areas between the first and second rings, known as Inner-Józsefváros, are in better shape, have a longer history of urbanization and were the first to be refurbished after the regime change. In contrast, if we were to take a short tour of Central Józseváros, the area beyond the second ring in the city’s second urban belt, we would be confronted with conspicuous signs of decay. One striking exception would be the new-but-mediocre facades of a recent high-density tabula rasa development, the Corvin-Quarter, hovering over remFig. 77. Budapest’s 8th district (red) and within it, the nants of the old urban tissue and serving ­Corvin-Quarter (white). as the subject for the case study described in this chapter of my book. It was towards the end of the 18th century that the fields and gardens in the second belt surrounding the walled city of Pest were starting to be turned into a residential area. Construction first started in the southern part (between what are known today as Üllői street and Baross street), whereas the northern areas (north of Baross street) remained in use as a market area until the urbanization boom of the second half of the 19th century. This gap of almost 100 years resulted in fairly different urban structures in these two areas.353 The 1838 flood literally washed the young settlement away. It destroyed all the cob-work houses and left only the few stone buildings behind. Reconstruction followed according to the original street pattern, with mostly single- or two-story buildings, albeit this time using stone as a construction material. During this period the neighborhood took a tradesman-conveyor character, crowding out the agrarian strain. Stalls and sheds were replaced by workshops and unpretentious flats. Low-density court-house types, mixed with small manufacturing units, emerged in what was to become the capital’s 8th district after the unification of Pest, Buda and Óbuda in 1873.354 The building stock of Middle-Józsefváros remained almost completely neglected in the post-war socialist period, resulting in the highest density of old buildings in poor condition and of unused parcels in Budapest around the time

Chapter 6  The Corvin-Quarter. Emergence of an ‘Absolutely Best Plan’ in the Backdrop of Post-Socialist T ­ ransformation

‘Little Chicago’: The Short Story of Józsefváros, Budapest’s 8th District

137

Fig. 78. Streetscapes in Budapest’s 8th district around 1989: Nagytemplom street.

of the regime change.355 As a result, middle-class residents moved out en masse in the decades following WWII. Whoever could afford it left the district as practically no new housing was built there and the old, deteriorated building stock was left untouched. The most privileged moved to villas and large apartments on the Buda hillsides, nationalized after the war and allocated to them by the socialist regime. Those less privileged by the bureaucratic allocation regime received apartments in new mass housing neighborhoods, while those without any privileges but possessing the means and skills to build a small house engaged in private construction on Budapest’s outskirts. From the mid-1970s on, the bulk of the intelligentsia also left the district’s poorish tenement buildings and moved into mostly newly built condominiums in Buda.356 This tendency was accompanied by the influx of poor, mostly Roma families from the 1970s on, decreasing the heterogeneity of the social composition of the district even further. Ladányi points out that the crowding in of the Roma was triggered by the elimination of their former slum-settlements via tabula rasa mass housing.357 By the 1980s, the 8th district was renowned for its high proportions of Roma population. Nevertheless, in 1990 the ratio of Roma inhabitants officially counted a mere 1 %,358 whereas in 2001 around 3.4 % of the local population identified themselves as Roma.359 While this was 138

by far the highest proportion of Roma in any district of Budapest,360 the actual figures were estimated to be higher by an order of magnitude. As it is common knowledge, official data does not properly reflect the population’s composition because it is up to the census subjects in Hungary whether they declare their ethnic affiliation or refuse to speak about it. Due to the low status of the Roma, only a fraction of them actually declare themselves as such.361 In order to better trace the spatial arrangement of the Roma population, Ladányi and his team conducted an alternative survey based on data concerning Roma kids in Budapest’s elementary schools. Their study from

while less than a quarter of Budapest’s poor were Roma at the time, in the 8th district the same ratio was over 50 %.364 Besides describing Middle-Józsefváros as Budapest’s first ethnic ghetto, Ladányi also calls attention to small-scale internal differences of social status, for example between the street front and courtyard apartments of apartment blocks, or between different building types originating from different periods. He goes on to advise urban planners not to think in terms of homogenizing, large-scale renewal. The scale of reference, he argues, should rather be that of individual buildings, street segments, or blocks.365

From Modernist Tabula Rasa to Soft Rehabilitation: The District’s Procrastinated Renewal While in practice the building stock remained neglected in the post-war era, plans had been repeatedly developed for the 8th district’s renewal. These plans testify to a significant paradigm change between the first wave starting in the 1960s and the second one in the 1980s. By the mid-1960s, the building stock in Middle-Józsefváros has deteriorated to such an extent that the city council was moved to consider a tabula rasa redevelopment, based on a prefabricated mass housing scheme. Budapest Urban Design and Development Firm (Budapesti Városépítési Tervező Vállalat – BVTV), a design firm institutionally subordinated to the city council, suggested a complete renewal of the area surrounded by the

Fig. 79. Streetscapes in Budapest’s 8th district around 1989: Leonardo da Vinci street.

József Ring, Baross, Illés and Üllői streets. However, this would have required the massive and simultaneous deconstruction of apartments, which was not feasible under the conditions of extreme housing shortages at the time. Therefore, instead of a total replacement of the existing stock, a partial and phased reconstruction was planned. In the first phase in

Chapter 6  The Corvin-Quarter. Emergence of an ‘Absolutely Best Plan’ in the Backdrop of Post-Socialist T ­ ransformation

1991–1992 reveals that the ratio of Roma kids in the 8th district (24.3 %) is quintuple the respective figure for Budapest (4.9 %). In Middle-Józsefváros, where the Corvin-Quarter is also located, every third schoolchild was Roma (31.3 %) at the time.362 The same ratio peaked at 40.7 % in the school year 1986–1987.363 Ladányi also points out that

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1963, 4,174 apartments were supposed to be taken down and replaced by 5,881, exclusively in ten-story or higher prefabricated blocks.366 This development was planned to become the pilot model for the socialist renewal of deteriorated downtown areas.367 Even the partial deconstruction and erection of prefabricated blocks on cramped parcels involved, however, serious technological and financial difficulties, causing the program to fall behind schedule with a mere 192 apartments delivered by late 1970 in a single 16-story block.368 Although renewal picked up again following a new plan in 1971,369 only a few apartment blocks were built and the project continued to miss the original target numbers by a wide margin.370 Due to the apparent failure of downtown renewal by means of mass housing projects, and as a result of an international paradigm shift towards soft rehabilitation that aimed at keeping former inhabitants, the 1980s witnessed the evolution of an alternative strategy for Middle-Józsefváros. The protection of the district’s social and economic networks, as well as the built types that housed these, was the focus of the rehabilitation strategy for the Corvin-Szigony area, first published in 1989 and made into a local decree in 1994.371 This was the first official document to claim that, in the absence of sufficient renewal measures, the district was facing the formation of a metropolitan ghetto rather than mere housing tensions.372 The plan’s main protagonists were Anna Perczel, urban planner at the Urban Research and Planning Institute (VÁTI), the stateheld bureau commissioned with the renewal plans, and sociologist János Ladányi, who was in charge of a detailed study of societal circumstances and foreseen impacts. The authors identified a variety of building types and praised their mix as a reminiscence of the former social life in Józsefváros, with cafés, cinemas, workers’ clubs and so forth. Thus, maintaining as much as possible of the old milieu has become a central aim of the project. The plan and the soft rehabilitation proposal incorporated into it were based on a detailed value assessment and suggested a renewal type that keeps and refurbishes most of the building stock. The idea was to replace the most dilapidated units, to loosen up the structure and to implement a network of meandering green open spaces throughout the area. The proposal of a block-scale rehabilitation echoed a venture in the neighboring 9th district, based on the French model Société d’Économie Mixte – a scheme of public-private partnership for delivering services of public interest.373 But in the 8th district it has never come to the deploying of such a project, mainly due to a lack of financial resources and investor interest. In an interview with this author, Perczel explained that no economic feasibility study was carried out for their proposal in the 1980s. This was not unusual at the time. The work of urban planners was limited to proposing plans and projects, whereas the task of assigning budgets to their proposals was reserved for the political authorities. This often resulted in huge gaps between plans and financial realities, and thus development projects regularly getting frustrated – as was also seen in the case of the 1963 renewal proposal. When, after the regime change, Perczel refined her renewal proposal it was still not complemented by a feasibility study, and thus could not serve as the basis of an economic decision. This fact is evidence of the paradoxical situation of the professional intelligentsia in the emerging market economy. Although highly influential in establishing the new order under Budapest’s liberal leadership in the 1990s, left-liberal social scientists (quite often former dissidents) were not equipped to stand a chance against those economic experts and businesspeople who already operated 140

in a capitalist modus. This pushed them into a defensive corner, ultimately getting stigmatized as unprofessional romantics. As a result, many of them found themselves crowded out from the frontline of politics. This phenomenon is closely linked to the unequal tempos of the transformation in different domains. While the political system practically changed overnight – followed by the rapid transformation of the economic and legal regimes – other structures, amongst them the modus operandi of urban planning and development, remained almost intact well into the new era. One outcome of the unevenness of change was the clashes in the political leadership’s professional hinterland. Another one, to which I will turn shortly, consisted in private investors gaining the upper hand both during the privatization of public utilities and formerly stateowned companies, and in the early post-socialist development of the city.

Chapter 6  The Corvin-Quarter. Emergence of an ‘Absolutely Best Plan’ in the Backdrop of Post-Socialist T ­ ransformation

Given these facts, in the first decade into the market economy and liberal democracy, the district remained the least desired amongst central urbanized areas of the city, according to comparative real estate value studies.374 Studies commissioned by the local government reveal that municipal tenements in the Corvin-Szigony area in particular were not up to standard, with an average size of 36 square meters and approximately half of the units having no comfort whatsoever.375 Nevertheless, the abandoned renewal plan had one consequence that was not to be underrated. In 1988, modifying a 1969 Government Decree regulating the alienation of state-owned dwellings,376 a Regulation of the Council of Ministers377 stated that ‘no residential real estates in the management of the councils’ housing management bodies are allowed to be alienated in case any Council Decree bans their alienation.’378 Vested with this competence, the Metropolitan Council enacted a decree in 1989, in which it ordered that buildings in territories where state or local renewal plans were in force are put under an alienation ban.379 This left the local government as owner of over 70 % of the Corvin-Szigony area’s building stock, a uniquely high figure for the Budapest of the mid-1990s.380 In 1997, based on the guidelines of the 1996 Budapest Urban Rehabilitation Order – albeit still based on Middle-Józsefváros’ 1994 complex renewal strategy – the local- and city-level municipalities signed a syndicate contract for the district’s overall rehabilitation and co-founded Rév8, a planning and consultancy firm conducting public tasks on behalf of the 8th district’s local government.381 This meant the establishment of a firm, professionally independent of the municipality yet fully owned by it. Such a solution promised to keep planning at a distance from everyday political clashes on the one hand and guarantee, through the ownership structure, the predominance of public interests on the other.382 It also meant that in case private investors were going to be involved in the district’s renewal, most of the negotiations would be conducted by Rév8 rather than the municipality itself. This makes Middle Józsefváros’s renewal even more interesting as a case to study.

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Fig. 80. Condition of buildings in Budapest’s ‘Urban Renewal Area’ in 1994. Note the conspicuous density of dilapidated buildings in Middle-Józsefváros. Source: Elisabeth Lichtenberger et al., Stadtverfall und Stadterneuerung in Budapest (Vienna: Verlag der Österreichischen Akademie der Wissenschaften, 1994), map appendix in sleeve.

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In the year 2000, the 8th district officially abandoned its former rehabilitation plan and announced the Corvin Project, the biggest tabula rasa urban development in post-­socialist Budapest’s history.383 The municipality and Rév8 argued that instead of investing hope in fragmented smaller investments it would be preferable to engage in a gradual, block-scale rehabilitation, which the Corvin Project promised by outlining the vision of a ‘new urban product’ to be promoted for the 22 hectares of deteriorated area. György Alföldi, chairman of Rév8, refers in an interview given to the author to the proposed development as ‘the big push’ the district would need to transform its image and, simultaneously, visualize this change.384 This was a project big enough to attract private investors and to catalyze additional development in the surrounding areas – so the argument goes. To enable the development of a new urban centrality, the municipality was to rezone the area into a mixed-use center. Changes to the relevant local regulations, however, had to be presented to a design jury of the city-level administration. The city’s planning department was opposed to the idea of rezoning, claiming that it would not comply with the city-scale strategies and would overwhelm the area’s public infrastructure due to the density of its volumes, inhabitants, and uses.385 According to the memories of István Schneller, then chief architect of Budapest, following the break of consultations between his department and Rév8, the issue of rezoning was taken care of directly on a political level.386 The relevant regulation only granted consulting rights to the city administration’s juries anyway; their opinions lacked binding force. György Molnár, member of the district council at the time, interprets the process somewhat differently. He claims that planners and architects functioned rather as autonomous agents under socialism; their ideas and decisions were rarely questioned by politicians – as long as they acted in accordance to the regime’s general policies. ­Professionals, Molnár argues, have a hard time accepting that in a representative democracy the last word is with the elected bodies as a matter of principle.387 In contrast, he would rather stand for a mistaken democratic decision than for a correct technocratic one – Molnár concludes, claiming at the same time that without the ‘big push’ the district would have been left in the soup. Given the circumstances, goes his argument, it was essential to involve private capital in financing the solution of the district’s dwelling crisis and, in order to do so, one needed an economically attractive proposal. The following section will walk the reader through the Corvin-Quarter development’s process with the aim of pointing out the links between the political, administrative and planning affairs (power patterns) and the actual production of space (spatial patterns) of Budapest’s post-socialist urban development. I will argue that the nature of the decision-making processes, the background conditions of the post-socialist transformation and the changing structures and mechanisms of self-governance, urban planning and resource management necessarily resulted in specific patterns of urban development, and that these patterns are as characteristic of the city’s recent history as are Budapest’s boulevards of the Austro-Hungarian Monarchy.

Chapter 6  The Corvin-Quarter. Emergence of an ‘Absolutely Best Plan’ in the Backdrop of Post-Socialist T ­ ransformation

‘The Big Push’

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Józsefváros in the Slow Lane: Setback via Budapest’s Distorted Redistributive Renewal Policies With around 78 % of housing in public ownership, the 8th district had the highest ratio of state-owned residential buildings amongst Budapest’s districts in 1993388, when the Housing Law389 was adopted. This law, besides transferring most state-owned real estate to local municipalities – more specifically to the districts in the case of apartments in Budapest – and regulating the conditions under which they were allowed to be privatized, resolved that the districts had to deposit 50 % of their net revenues from the privatization of apartments into a central cap, called the Budapest Urban Rehabilitation Fund. This was to become the basis of a redistributive regime aimed at spreading a substantial portion of privatization income amongst districts. In 1994 the city government of Budapest regulated in a decree390 the conditions under which districts could apply for partial funding of their renewal programs from this cap. Until 1997 this opportunity was not made available to district municipalities other than those having contributed to the Rehabilitation Fund. Furthermore, only apartment blocks in full municipal ownership were eligible for financial support, leaving municipal apartments within blocks of mixed ownership by the wayside. The Renewal Order of 1997391 renamed the Urban Rehabilitation Fund into Urban Rehabilitation Resources and, more importantly, extended the eligibility of application to privately owned condominiums. Furthermore, the city government committed itself to complementing the districts’ deposits by almost doubling the Urban Rehabilitation Resources’ assets from other sources.392 The third important amendment consisted in an introduction of interest-free credits complementary to the non-refundable subsidies. For the aim of differentiating financial support, the Renewal Order borrowed the effective Urban Renewal Program’s territorial categories and gave priority to the so called ‘focal areas’ and ‘action areas’ (see Fig. 83.). By ‘focal areas’, the Renewal Order roughly meant areas in the urban core and the second belt with urban blocks from the period of promoterism (marked in bright yellow on the map); whereas by ‘action areas’ it referred to smaller hubs designated by the city government within the focal areas for fast development (marked in darker yellow). Programs within these action areas were prioritized and no privately-owned blocks exterior to the focal areas were eligible for financial support. A study from 2001, commissioned by the city government with the aim of evaluating the practice of renewal subsidies, sums up two common criticisms of this regime.393 It insists first that no distinction was made among buildings on the basis of their owners’ neediness – be they municipalities or private individuals. This resulted in the distortion of renewal subsidies, as these ended up being concentrated into better-off areas of the city. This distortion was further amplified by the fact that wealthier district municipalities were in a much better position to financially support housing renewal within their territories. Secondly, the city level subsidies were provided with no regard to other, already ongoing support programs. This resulted, for example, in the supporting of block renewals that the respective districts refused to subsidize. 144

Fig. 82. Block-scale renewal in the 9th district, ­ xecuted in 1994. e

Thus, the order was inconsistent with the Renewal Program which saw the role of citylevel government mostly as strengthening and consolidating the district-level programs rather than introducing a new, independent layer of subsidies. One could add that the whole redistributive system of renewal funds was lacking any general strategy concerning the timing of supported rehabilitation projects. Consequently, districts with already established renewal strategies, or even ongoing programs, became the real beneficiaries of redistribution. By the time others awakened, a substantial portion of available funds had already been utilized. The biggest beneficiary was the 9th district, which had had a block-scale rehabilitation program in effect since the mid-1980s. SEM IX. Co, an actor based on the French model Société d’Économie Mixte and independent of the local government, managed the privatization of real estate and the district’s inner areas’ renewal. Until 2001, approximately 50 % of all funds was awarded to the 9th district alone.394 Even more strikingly, between 1997 and 2001 the 9th district collected 672 million Forints for its complex renewal programs, which amounted to 71 % of all available funds for the dedicated action areas of Budapest in this time period.395 All in all, this district received a sum four times as large as what it had deposited into Budapest’s Urban Rehabilitation Fund after successful privatization of its building stock. In the 1990s, the neighboring 8th district was neither comparably successful in applying to rehabilitation funds of the city level administration, nor could it attract private investors for the renewal of its housing stock. The reputation of the neighborhoods in this district was so bad that developers were afraid that their potential investment would soon be devalued. György Alföldi claims that the 8th district’s lack of success was not an unforeseen outcome of impersonal processes and cannot be solely attributed to the controversies over the urban renewal regime. According to him, Budapest’s political leadership wanted to cement the role of Józsefváros as the city’s poor district and, consequently, was not willing to support their efforts with sufficient funds. In support of this claim, Alföldi argues that far less financial means were offered to Józsefváros from Budapest’s central budget than what the wealthier 9th district had received in previous years – whereas, according to him, larger subvention would have been the reasonable strategy.396 By contrast, Gábor Demszky, then mayor of Budapest, argues that the districts’ overwhelming autonomy in the dual-tier

Chapter 6  The Corvin-Quarter. Emergence of an ‘Absolutely Best Plan’ in the Backdrop of Post-Socialist T ­ ransformation

Fig. 81. Protest demanding new social housing in Budapest's 8th district in 1989.

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system made the aspiration to have a coherent metropolitan-level strategy and planning utopistic.397 With similar reasoning, István Schneller – then chief architect of Budapest – even explicitly named the Corvin-Quarter development as evidence of the inconsistency of the competing districts’ plans with the city’s meta-strategies.398 All in all, the frustration caused by the lack of development, actors of the 8th district’s local municipality came to the conclusion by the mid-1990s that the block and building-scale renewal scheme of the 1980s, focused on refurbishing and conserving the existing stock, needed to be abandoned and radically different concepts developed instead.

Apartment Blocks with Renewal Subsidies The 1997 Renewal Order‘s Focal Areas

The 1997 Renewal Order‘s Action Areas 0

Fig. 83. Renewal subsidies of apartment blocks obtained between 1997 and 2004, superimposed on the focal and action areas of the 1997 Renewal Order. Note the discrepancy between the subsidies’ density and the arrangement of the neediest action areas.

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5 km

There was, thus, a close interaction between the post-socialist reforms meant to restore local self-governance, the character of Budapest’s redistributive renewal policies, and the difficult position in which the 8th district found itself by the mid1990s. Conflicts of interest between the city and its districts became everyday

Patterns of Innovation in Urban Renewal: Integrating a ‘Grand Project’ into the District Rehabilitation Strategy It was under these conditions that two deputies and the urban development rapporteur of the 8th district prepared a concept paper on a possible district development strategy.399 They started out from a premise similar to that of Perczel’s renewal conception of the 1980s: according to them, the district found itself in a cumulatively disadvantageous situation. More specifically, they insisted on the visible ghettoization of Middle-Józsefváros and on the necessity for the district government to come out with a complex rehabilitation strategy. They argued that the district’s socio-economic degradation must be stopped before the process reached a critical state and became irreversible for long decades. Two priorities were suggested by their document: urban development and education reforms.400 Concerning urban development, they came to the following conclusions: First, urban renewal should be launched in two areas; on the territory of what was to become the Corvin-Quarter development and in the Magdolna Quarter (see Fig. 86.). Second, similarly to what happened in the neighboring 9th district, a development company should be founded for the marketing of plots assigned for utilization by the municipality. The paper suggested that the building stock’s actual renewal should also be managed by this entity (this was not the case in the 9th district). Third, fostering private development was not sufficient; municipal funds were to be made accessible for urban renewal. Fourth, privatization of real estate should be abandoned in areas dedicated for renewal programs. Given that preparations for the 1997 Urban Renewal Order meant that identifying the renewal action areas was well under way, and given that due to the area’s bad reputation hardly any private investor could be expected to take an interest in developing in Middle-Józsefváros whether on a single parcel or even on the scale of entire blocks, the paper contained nothing strikingly new. The fact that it was conceived and submitted to the district council nevertheless heralded a new era when the district’s development trajectory was being laid down. One of the authors, György Molnár, recollects that in this concept paper the idea of the Corvin-Quarter as a marketable project had

Chapter 6  The Corvin-Quarter. Emergence of an ‘Absolutely Best Plan’ in the Backdrop of Post-Socialist T ­ ransformation

phenomena of the two-tier municipality, the complexity of the internal relations distorting and frustrating the municipal policies – see the case of the redistribution of privatization income for renewal purposes. The disproportional allocation of financial means in favor of wealthier and more advanced districts, as well as the incompatibility of the 8th district’s renewal strategy with the city administration’s aims, left Józsefváros in a state of stagnation which in turn motivated the district council to seek radically different renewal concepts and policies.

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Fig. 84. Detailed Development Plan of Middle-Józsefváros (VÁTI, 1987).

Fig. 85. Anna Perczel, Revised development proposal of the green promenade (VÁTI, 1992).

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lization of external means from the market. The Corvin-Quarter, due to its central location and good accessibility, seemed a natural choice for a market-based renewal on a neighborhood-scale, Molnár told the author. The concept paper was revised and

Kerepesi negyed

Népszínház negyed

Palota negyed

Csarnok negyed

Százados úti negyed

MagdolnaQuarter Ganz negyed

Corvin-Quarter

Orczy negyed Tisztviselő telep

Fig. 86. The Quarters of Budapest’s 8th district.

published in 1996, followed by an alienation ban on all apartments and business-premises in the designated renewal areas of Middle-Józsefváros. At this time, the municipality was still the owner of around 50 % of the building stock in these neighborhoods. As for the entirety of the district: 8,000 out of 40,000 apartments were municipally owned and the aim then was not to sell any further apartments in a bad condition to the poor, as this would have perpetuated the deplorable conditions. The following year saw the foundation of Rév8 Plc.402, a company owned by the city government of Budapest (39.1 %), the 8th district’s municipality (50.9 %), and OTP Bank (10 %), and commissioned to establish and carry out the district’s urban renewal program.403 Also in 1997, a syndicate contract was signed by the city government and the 8th district’s local municipality on the district’s rehabilitation and development. In August 1999 the urban designer György Alföldi was appointed as deputy director of Rév8, and by December of the same year the agency developed the first masterplan for what they called the Corvin-Szigony Promenade. This was to become a linear pedestrian walkway connecting the Corvin cinema to the west of Szigony street and the public garden called Füvészkert to the east of it (Fig. 90.). It is interesting to take a look at the evolution of the neighborhood’s green space concept. In the 1980s, Anna Perczel started from the assumption that the green islands of the blocks’ courtyards – the neighborhood’s hidden treasures, as she called them – should be opened up, connected, and complemented by additional green spaces so that they all constituted a fragmented, small-grained tissue that interlaces the whole quarter. This idea took final shape in the 1987 Detailed Development Plan (Fig. 84.). This regulation gave primacy to the green network by introducing a major, albeit meandering, east-west connection through the quarter. Perczel went on to refine her plan after the regime change and published, in 1992, a revised plan (Fig. 85.), in which the major connection was labeled ‘green promenade’ and had been consolidated by a dominant tree-alley. Once Rév8 took on the task of planning and coordinating the district’s renewal, it made three core statements concerning the possible development of the Corvin-Quarter. It stated first that this area was the district’s most marketable part and, as such, should be announced as a single entity for private development. Second, the renewal should have a tabula rasa character; that is, most of the neighborhood’s

Chapter 6  The Corvin-Quarter. Emergence of an ‘Absolutely Best Plan’ in the Backdrop of Post-Socialist T ­ ransformation

already been formulated in combination with the social rehabilitation of another area (the Magdolna-Quarter).401 According to Molnár, the two projects were tightly linked to one another. Once housing deterioration and slum formation has reached a relatively high level, social rehabilitation was not feasible without a mobi-

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old buildings should be demolished and replaced by denser blocks – albeit following the original street grid and urban block pattern. Third, as an exception to

Fig. 87. Anna Perczel’s detailed condition assessment of ­Middle-Józsefváros (VÁTI, 1992).

Fig. 88. One of György Alföldi's early sketches of a possible green promenade (Rév8 Plc., 1999, upper right). Fig. 89. Alföldi's sketch of tabula rasa around the central promenade (Rév8 Plc., 2001, lower right).

Fig. 90. District Regulatory Plan for the Corvin-Szigony Area (Rév8 Plc., 2002).

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lose its green character throughout the process and an urban square proper was not established either. The result is some sort of a hybrid with a high level of spatial fragmentation and an overdesigned configuration of its surface, making appropriation by its users difficult. This section pointed out that, in the 8th district, it was by and large impossible to find market funding for the block-scale rehabilitation planned in the 1980s and 1990s; the building stock found itself in devastating condition; at the same time, a substantial part of the real estate was still in municipal ownership. As a joint effect of these circumstances, the district authority adopted a strategy of giving the Corvin-Quarter over for a private grand project development, while pursuing social rehabilitation in some of the district’s other neighborhoods. The earlier plan’s failure can be directly linked to two characteristics of the post-socialist transformation. First, the old regime’s economic crisis, followed by the transformation shock, left the district without sufficient means for carrying out a self-financed housing renewal project. Second, the rapid privatization of real estate consigned long-overdue refurbishment tasks to the new owners – mostly to former tenants lacking the economic means for such refurbishment – and resulted in excessively fragmented ownership conditions. This turned coordinated renewal into an extremely difficult task, while the dilapidated neighborhood was made highly unattractive to private investors due to its fragmented ownership structure. Furthermore, until 1997 the mix of publicly- and privately-owned apartments within one building made the municipal real estate ineligible for renewal subsidies from Budapest’s central funds.

Chapter 6  The Corvin-Quarter. Emergence of an ‘Absolutely Best Plan’ in the Backdrop of Post-Socialist T ­ ransformation

this rule, a central pedestrian promenade should be built, cutting through the neighborhood in an east-west direction. Already in this early conceptual phase, the promenade appeared as an engineered central open space, as opposed to Perczel’s ‘hidden treasures’ proposal. A clear-cut distinction between public and private spaces was provided by the suggestion that the interiors of the blocks were not going to be incorporated into the public space network. As this grand promenade was difficult to integrate into the surrounding tissue with the Corvin cinema (and later the newly built shopping mall) blocking its only possible connection to the primary public space, the ring road, it was to get the character of an enclave. As a further consequence, the proposed quarter was to become somewhat introverted, focusing on its central open space. What is more, the promenade seemed to

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The Corvin-Quarter as the ‘Absolutely Best Plan’ In 2000, after having made a sketch of the promenade the previous year (Fig. 88.), and before providing a drawing the following year that superimposed the new blocks on the existing neighborhood grid (Fig. 89.), György Alföldi was appointed director of Rév8. His nomination was based on a consensus between the socialist and right-wing factions of the municipal council.404 At this time, the real estate market was caught by an investment fever triggered by the expectation of the country’s EU-accession. Bank assets were pumped into the real estate sector, and investor interest in downtown locations was on an exponential rise. Notwithstanding of this trend, the district was still in a tight corner, and therefore it continued to vest its hopes in Rév8 as a way out of stagnation and decay. Alföldi argued in a public interview in 2005 that the urban renewal should proceed without ‘dropping intellectual tears for old buildings’.405 In the same interview he claimed that the ‘city should support those willing to invest’, and that it would be counter-­productive to spend financial means willy nilly to assist those in need. Although this market libertarian discourse was in clear opposition to that of Anna Perczel and János Ladányi, authors of the earlier renewal conception, Alföldi and Rév8 seem to have been seriously committed to securing upgraded housing for those whom the planned development was to displace. First of all, according to Alföldi, around 670 apartments with all modern conveniences entered the municipality’s portfolio in the development’s first phase, with the average size going from 37 to 40 square meters. He pointed out on many forums that every tenant and owner was to be taken care of and that their living conditions were going to improve. A study from 2000, commissioned by Rév8, revealed the inhabitants’ relatively strong attachment to the Corvin-Quarter’s area.406 Their adherence index scored highest (85 points) when asked how much they liked living in Budapest; it decreased when the question was about their relationship to the 8th district (56 points), but rose again when the inquiry focused on their ties to the Corvin-Quarter (67 points) (Fig. 91.). The neighborhood was especially attractive to the elderly and to those with a low level of education. At the same time, 65 % answered that

Figs. 91. and 92. Distribution of answers to the question: ‘How much do you like living here?’ (left) and ‘Would you reconsider moving if…?’ (right), both from a survey conducted on behalf of Rév8 Plc. in 2000.

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Figs. 93. and 94. The Corvin Promenade in 2010 (left), surveilled by security staff (right).

Figs. 95. and 96. Screenshots from ‘Corvin Variációk’ (00:12:32) and (00:19:34), see note 407 below.

they didn’t intend to change home in the next couple of years. Since untenable housing standards were amongst the primary reasons for planned moving, and 62 % of those who initially refused to leave said they would reconsider the issue in case a better apartment was offered to them (Fig. 92.), Rév8 came to the conclusion that the relocation of the project area’s inhabitants would not face major resistance, and so it would be manageable. In a vivid contrast to this conclusion, a documentary from 2011 entitled Corvin Variations407 and presenting stories of former inhabitants of the quarter – demolished by that time – suggests that what was lost was not just the neighborhood’s unique architectural characteristics, wearing the imprint of an extinct era: meaningful social networks found themselves disrupted and significant qualities suppressed. This view is shared by Anna Perczel and János Ladányi, who judged the proposed tabula rasa development ‘inhuman’.408 At a public discussion organized by the Contemporary Architecture Center in 2010, the urban planner Lajos Koszorú, member of the Budapest plan-jury and, in this capacity, a major opponent of the project’s District Regulatory Plan (KSZT) in 2002, criticized the clean slate development from an architectural perspective. He claimed that the proposed development ignored its neighborhood; it was too dense, its connections to the surrounding urban fabric were left unresolved, and its central promenade had no connections to the metropolitan network.409 153

Proponents of the project such as Alföldi and Molnár referred to economic facts in response to the critics. The quarter was in a state of decay, a significant proportion of the blocks not lending themselves to any refurbishment, and the experiences from the previous decade had shown that private investors remained completely uninterested in developments on a small territorial scale and of low economic volume there. ‘Perczel and Ladányi are dreamers and their project was modernism’s last word’ – claimed Alföldi at some point.410 The background study, however, leads one to interesting observations. The official renewal plans made under the socialist regime in 1965 were also based on the assumption that the building stock’s decay has reached a critical level, and that the only economically viable solution would be the neighborhood’s full demolition – the idea was, then, to replace the old buildings with prefabricated mass housing blocks (Fig. 97.). All apartments were in state ownership at the time and the council had total control of the development. What was lacking were the financial means. The plans were abandoned by the early 1980s, to be replaced by Perczel’s gradualist proposal. Interestingly, the line of argument made in 1984 had a striking similarity to that on which the paradigm shift of 1999 was based, namely that the preceding scheme was economically not viable. Ironically, the socialist state was as unwilling or unable to invest in the quarter’s renewal in the 1980s as the private investors of the emerging capitalist market in the 1990s. While the total approach of the socialist state (1960s) as well as the careful, gradualist approaches both under the late party-state era (1980s) and during the unfolding of the free market economy (1990s) have failed, a total plan under market conditions, the Corvin-Quarter project, managed its way to actual construction in the 2000s. This phenomenon can be linked to the general trend of local governments unable to generate and keep structural changes under control in the 1990s, to then engage in cooperation with private developers for what have become some of Budapest’s symbolic developments in later years. Investor urbanism became the ‘absolutely best plan’ for Budapest’s local politicians of the 1990s and 2000.

Fig. 97. Urban Renewal Plan of Józsefváros (BUVÁTI, 1965).

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Fig. 99. The Corvin-Quarter’s first built phase – in contrast with one of the old neighborhood’s remnants.

Chapter 6  The Corvin-Quarter. Emergence of an ‘Absolutely Best Plan’ in the Backdrop of Post-Socialist T ­ ransformation

Fig. 98. The clean-slate renewal commenced in 2004.

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Inescapable Trajectories: Vagaries of the ‘Absolutely Best Plan’ The emergence of the Corvin-Quarter development, until its construction finally started in 2006, was nothing short of eventful: plenty of twists and turns marked its evolution. Budapest’s first post-socialist Urban Redevelopment Program, adopted in 1997, was already mentioned earlier. In this document, the city government declared that the inner districts’ renewal was amongst its priorities and that

Empty plots Dilapidated buildings Buildings in need of refurbishment Refurbished buildings New buildings

the financial means would be constantly provided to support locally initiated programs. Based on this program and the local renewal/ Fig. 100. Condition of buildings in redevelopment concept paper, the 8th dis- ­Middle-Józsefváros in 2005. trict’s municipality signed a syndicate contract with the city government. The contract defined some of the major public tasks and goals, and ruled over the allotment of financial resources. The city government committed itself to supporting the renewal program in Józsefváros, but it made the subsidies conditional on the district’s application to the Renewal Fund for each of its projects separately and on case-by-case decisions by the city council. Rév8, the firm in charge of the district’s renewal, started preparing the new social program as well as planning the spatial form it should materialize in. By the late 1990s it was common sense that the district should abandon its 1994 Detailed Regulation Plan and a new, hybrid concept should be developed combining investor projects and social rehabilitation steered by the municipality. The district council deputies also realized that the practice they had been following until then – namely the concentration of renewal funds into the better-off central areas of the district – meant that nothing

Fig. 101. Standards of apartments in the Corvin-Quarter area in 2000.

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Fig. 102. Average apartment prices in Budapest’s ­central districts (1000 HUF/sq.m) in 2007.

Figs. 103. and 104. Nagytemplom street, house 17 (left) and Szigony street, house 29 (right) in 2004.

trict was seen as an important reference, albeit with mixed feelings. In 1996 a study co-­authored by SEM IX, the managers of the rehabilitation there, was still based on Perczel’s green corridor idea and block-scale renewal scheme, and proposed public investment of 12 billion forints over the course of 15–20 years.411 Anticipated revenues from privatization would have only covered a mere sixth of these expenses. A year earlier the 8th district’s mayor, Béla Csécsei, even proposed commissioning the French partner in SEM IX with the renewal tasks. This was, according to the deputy György Molnár, axed by Budapest’s mayor, Gábor Demszky, who has made the city government’s support conditional on dumping the French actor.412 György Alföldi points out that the social map of the 8th district was much worse than that of Ferencváros, with larger disparities between its neighborhoods. As the following comparison indicates, the building stock was also in much worse condition there around the turn of the millennium. Approximately one third of the district’s apartments were still in municipal ownership, 20 % of which had no bathroom. The situation of municipally owned tenement buildings within the Corvin-Quarter was even worse. As a study from 2000 points out, 61 % of these were without private bathroom and toilet.413 The average apartment size in the municipality’s portfolio was a mere 37 square meters, with every second property being smaller than 30 square meters. 65 % of all tenements were single-room studios (Fig. 101.).414 Approximately a third of the building plots were empty and another substantial amount of buildings had deteriorated to such an extent that their refurbishment was not seen as feasible (Fig. 100.). The situation was especially critical in the side streets, where a vast majority of buildings had obsolete structures and often had to be underpinned. Many buildings were in life-threatening condition. Due to their miserable state and low density, the 8th district’s real estate stock also had the lowest potential market value within the central urban areas of Budapest (Fig. 102.). An inventory of all buildings effected by the new development was prepared by Rév8 in 2004. The buildings were documented through photographs and an Excel sheet summarizing their condition. Most images show deteriorated façades, some with boarded-up windows and crumbling firewalls (Figs. 103. and 104.). The buildings seem to have been left without refurbishment for long decades.

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was left for the neighborhoods in biggest need. The renewal in the neighboring 9th dis-

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Fig. 105. Futó street 33, around 2000, neo-baroque interior in a classicist building, recommended for listing.

Fig. 106. Leonardo da Vinci street 33, around 2000, recommended for listing.

Fig. 107. Leonardo da Vinci street 32, around 2000, recommended for listing.

Anna Perczel’s take of the same building stock, summarized in a presentation of some of the area’s hidden treasures, is significantly different. Her images register green classicist courtyards, intact neo-baroque interiors, richly ornamented façades, and decorated staircases - some recently renovated (Figs. 105–107). According to her, these structures constituted an important part of the city’s built heritage, and bulldozing would be an inhuman act.415 Sándor Pálfy, former Head of the Urban Design Institute at the Budapest University of Technology, argued similarly when claiming at a public round table discussion that the new project ignores the neighborhood’s architectural and urban design values and proposes structures alien to the site.416 Most recently, the publicist Imre Pákozdi criticized the new buildings’ aesthetic qualities and their gratuitously high density.417 As these examples show, opposition to the Corvin-Quarter project was not only based on fears regarding its possible social impact – it was also motivated by concerns that it would do irreparable damage to a valuable architectural heritage. For the sake of comparison, consider the neighboring 9th district’s renewal project. By the 2000s, critical voices had arisen concerning the gentrification process triggered by the block-scale renewal of Ferencváros, resulting in massive population change there.418 Instead, Józsefváros hoped to keep most of its inhabitants within the district, 158

albeit not necessarily at their current addresses. The commitment of the municipality to relocate the inhabitants of the Corvin-Quarter within the district opened the way towards the marketization of the Corvin-Quarter’s development. However, as studies made at the time419 revealed, two thirds of the area’s inhabitants either had no intention to move or, even if they were prepared to do so, they could not afford it (Fig. 108.). Furthermore, most had much stronger ties to their immediate neighborhoods than to the district at large.420 The preferences of homeowners were very different from those of tenants. While the vast majority of owners named the single-family house as their first choice were they to move, most tenants preferred municipal tenement blocks (Fig. 109.). Around 1,100 apartments were to be taken down, 30 % of which were privately owned while 70 % remained in municipal ownership. Budapest’s public administra-

tenants on a one-by-one basis. Owners and tenants of bigger apartments tended to opt for cash compensation, while those of smaller units rather expressed a preference for new apartments. Alföldi explained that Rév8’s aim was to offer exchange apartments for most inhabitants, and to provide cash compensation only to residents who were able to buy new homes.421 In this way, they hoped to avoid low-income residents depleting the resources received from compensation without resolving their housing problem. Statistics of Rév8 show, however, that around one half of the residents were ultimately given cash, even where the negotiated amount was hardly enough to buy property within the boundaries of Budapest.422 As relevant studies do not exist, one can only speculate whether some of these people ended up in poorish homes in the distant countryside, as many from the neighboring 9th district did.423 Ladányi argues that downtown gentrification resulted in the further intensification of urban marginality elsewhere in Budapest’s deteriorated second belt and on its fringes, as well as in the countryside.424 To decide whether this applied in the case of the Corvin-Quarter

Fig. 108. Likelihood of the Corvin-­ Quarter’s former residents to move.

Fig. 109. Their preferences if they were to move.

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tion did not accept Rév8’s claim that the project as a whole was of public interest, and concluded that the district municipality had no legal claim for expropriating the owners and discontinuing tenement contracts, and so it had to negotiate with owners and

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renewal as well, one would need to investigate both the impact its former inhabitants had on their new, mostly disadvantaged neighborhoods and how their life circumstances have changed since their relocation. As a group of young researchers argue, one precondition for massive gentrification to happen was the situation where local municipalities were forced to compete for meagre state funding as well as for the relatively scarce private capital by making investment opportunities more favorable and, if need be, occasionally even adopting pro-investment measures to the detriment of their current population.425 However, proponents of the district’s renewal argue on all fronts that one should not discuss the Corvin-Quarter, a market-oriented development, separately from the social rehabilitation schemes such as the Magdolna-Quarter project, planned for other neighborhoods of the district. According to them, poverty had to be reduced in some of the most ghettoized areas, for which they proposed two different strategies based on the different neighborhoods’ specific states; they assumed that the social rehabilitation program would allow a large part of the population uprooted by investor-driven redevelopment to be accommodated. To this end, the district municipality, via Rév8, built nine new social housing blocks426 and offered 200 new homes in these blocks to former residents of the Corvin-­Quarter. The most well-renowned amongst them is the building under Práter street 30–32, designed by Plant Atelier and honored by multiple architectural awards (Fig. 110.). 47 families from the Corvin-Quarter were relocated here. Rév8 has purchased another 110 apartments from private owners and used 170 from the municipality’s own portfolio to provide further exchange apartments. A map juxtaposing resident displacement with changing social status in Józsefváros (Fig. 112.) reveals a correlation between the rate of relocated inhabitants and the emergence of socially weak areas in the district’s more remote territories. This, complemented by the fact that the rest of the former inhabitants mostly left the city, raises the question of whether the development, however generous its compensation policies, did not contribute to cementing spatial segregation. A document by Rév8 argues that the municipality’s real estate portfolio has significantly improved (as evidence citing mainly the fact that the average apartment size grew from 31 to 40 square meters),427 but a follow-up study on the aftermath of the residents’ displacement is unfortunately yet to be conducted. In the absence of such a study, it is hard to assess how their moving to less frequented neighborhoods of the district, farther away from metro lines and the main ring, affected their daily lives. What is known, however, is that the clean slate development with its complete resident exchange and the introduction of much larger architectural grain sizes and higher densities created tension between the Corvin-Quarter development and the adjacent neighborhoods. One of the main initial aims of Rév8 was to create a socially and architecturally harmonious relationship between the new development and its surroundings and avoiding the emergence of an ‘urban island’. Whether they succeeded in this is open to debate.

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Outer-Józsefváros

Inner-Józsefváros

Type of municipal exchange apartment Acquired from private on the market From the municipality’s real estate portfolio Newly built public housing Status change Demolished buildings with their residents displaced Blocks with substantial negative status change (over 100 new inhabitants between 2005-2011, majority with elementary education only) 0

Corvin-Quarter

Middle-Józsefváros

500m

Fig. 112. Resident displacement from the Corvin-Quarter and changing social status in Józsefváros (2003–2011).

Chapter 6  The Corvin-Quarter. Emergence of an ‘Absolutely Best Plan’ in the Backdrop of Post-Socialist T ­ ransformation

Figs. 110. and 111. New social housing blocks built in 2008. Práter street 30–32, designed by Plant Atelier (left) and Futó street 20, by Rév8 Plc. (right).

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Power Defines Reality: The Public Hand ­Losing Elbow-Room In his interview with the author, Alföldi recalls that Budapest’s city government first offered the 8th district funds comparable to what the 9th district has previously received; that offer came to nothing. Furthermore, refurbishment and new construction in the 9th district were triggered by state subsidies of 1 billion Forints in the 1990s,428 no comparable funding having been made available to Józsefváros. These facts meant, so Alföldi’s argument goes, that the district disposed of a far lower amount of resources than what it needed for conducting a proper renewal project. What it actually had was sufficient only for the conservation of the building stock’s devastated condition. Under these circumstances, the feasibility study of the Corvin-­ Quarter development presented by Rév8,429 suggesting to draw on private investors, banks, and target groups with considerable spending power – such as young individuals who would otherwise be attracted by suburbia – for financial support, proved to be highly attractive.430 Rév8 saw its main task as consisting in achieving a new self-­ image for the district that visualized the changes in its social status. This aim required substantially improved living conditions within territories large enough to have catalyzing effects on their surroundings. In 2000, the district municipality announced the Corvin-Quarter development’s target qualities;431 a year later it ranked its territories as a local renewal area with a complex renewal program.432 This was in accordance with Budapest’s Urban Renewal Order of 1997, as that also defined these territories as ‘renewal action areas’. The strategy was vaguely defined but it aimed at improving the quality of life in Józsefváros and at reinstating the inhabitants’ faith in the future of their neighborhoods. The 22 hectares-large project area was defined as being bounded by Práter, Szigony, Tömő, Balassa, Apáthy, Üllői, and József streets (Fig. 113.). As a start, a private investment partner was to be found to make the project financially viable. The area seemed to be suitable for this aim, and for a number of reasons: its dilapidated housing stock, the fact that it included a large proportion of empty land, the substantial municipal ownership of real estate within it, and good urban structural relations made it an ideal location for an all-round project of a sufficiently large scale to be attractive to private investors.433 This was the first time in Budapest’s post-socialist history that a district municipality involved a large private investor development in its renewal project. The first investor tender was announced fairly quickly,434 and the firm ENIX-PRO was declared the winner. Minutes from a meeting of the municipality’s Economic Committee,435 chaired by György Molnár at the time, reveal some controversy around the decision. While representatives of Rév8,436 based on the selection criteria, singled out ENIX-PRO during their negotiations with bidders, Molnár and other Committee members argued that all applicants should have been kept in the process, leaving the ultimate say with the district council. Molnár believed that ENIX-PRO was associated to Fidesz, the then governing party, and suggested that the party’s local deputies, Róbert Juharos and József Lőrinczi-Reich manipulated the choice of Rév8 behind the scenes. In spite of such tensions, a frame contract was signed by Rév8 and 162

Institutional Program

Private Developer Program

Individual Private Building Projects Public Space Program

Municipal and Private Refurbishment Program 0

250 m

Fig. 114. Public and private programs of the Corvin-Quarter development, announced in 2002.

the district’s municipality with ENIX-PRO to cooperate on a real estate development project located in the Corvin-Quarter.437 The developer committed itself to investing 9.6 billion forints in the project, in six instalments.438 Since the first instalment was not transferred in due time, the municipality and Rév8 annulled the contract.439 Shortly thereafter, on October 10, 2002, a new tender was announced, still aiming to find a single investor to develop the full Corvin-Quarter. Both György Molnár and György Alföldi told the author that after the fiasco of the ENIX-PRO agreement, the question of whether a single-investor model should be given priority over one involving multiple actors was discussed.440 Proponents of the single-investor option, including Alföldi himself, claimed that public-private coordination is easier to carry out in this way; furthermore, the project is more attractive for private investors if they expect themselves to be the only partner of the public hand, and thus it is more marketable. In contrast, critics warned that if there is just one private investor, its failure to deliver

Chapter 6  The Corvin-Quarter. Emergence of an ‘Absolutely Best Plan’ in the Backdrop of Post-Socialist T ­ ransformation

Fig. 113. The 22-hectare project perimeter of the Corvin-Quarter in 2004.

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may frustrate the entire project – as the experience with ENIX-PRO suggested. The critics argued, furthermore, that the municipality’s position is weakened if it has a single powerful investor to negotiate with. From an urban design perspective, we could add that a development with a single investor is likely to become uniform in its architecture, to take shape as an isolated island, and to adopt an introverted urban structure (which is what actually happened). Parallel to the tender’s publication, a local order was issued on the proposed cost-­ sharing of the development’s public program.441 Total public costs had been estimated to amount to approximately 15 billion forints: 5 billion of which was planned to be covered through privatizing development land to the future private developers, 5 billion was to be charged on the district’s budget over the course of 10 years (from 2003 to 2013), 3.2 billion was expected to originate with subsidies from Budapest’s Renewal Funds, and 1.8 billion was coming from government sources. György Alföldi mentions that, despite the frame contract with the city and promises from the government, by 2013 only 1.8 billion was received from Budapest’s Renewal Funds and 0.2 billion from the state.442 On July 3, 2003 the district municipality’s council announced Corvin Befektetési Rt., a consortium founded by four construction companies – Középületépítő Rt., Baucont Rt., Hérosz Rt., and Kipszer Rt. – as winners of the investor tender initiated a year earlier. Shortly thereafter, in August of the same year, a frame contract was signed between the district municipality and Rév8 on the one hand, and the consortium on the other.443 This contract determined the purposes of the cooperative venture, defined the modus of transferring land ownership to the developers and the square meter prices in each phase, defined the duties of the parties involved concerning the project’s realization, and provided for procedures in case of contract violation or failure to accomplish tasks. Important to mention is the fact that an option contract from 2001 gave Rév8 pre-emptive right over the municipal real estate drawn into the

Building Blocks Shopping Mall

Modified Street Lines Building Lines

Underground Building Contours Metro Line Protection Zone 0

250 m

Fig. 115. Amended Regulation Plan of the Corvin-Quarter from 2005. Note the new shopping mall’s location (left side) compared to the promenade layout in the 2002 plan, as well as the enlargement and unification of further blocks at the cost of public space.

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Fig. 117. Vajdahunyad street, blocked by the new shopping mall.

Corvin-Quarter renewal program.444 This put Rév8 in an extremely strong position both in its negotiations with the tenants that needed to be relocated and compensated, and in its bargaining with the private developers. Remarkably, Rév8 emerged as an agent acting in possession of ownership rights rather than as a trustee of the true owner, the local government. The transfer of ownership did not come, however, with the liberty to dispose of the real estate being vested in Rév8, as the frame contract of 2003 resolved that Rév8 use its rights to pass ownership to the developers.445 In 2004 Futureal Group, a Hungarian investment firm that was an active and big player in urban development at the time but did not participate at the tender in 2002, purchased the development company founded by the winning consortium for the ­Corvin-­Quarter’s development.446 Apparently, disagreements amongst the consortium’s member firms paved the way for this transfer as three of the four companies involved wanted to back out of the project. Kipszer Rt. first held on to its shares, leaving Futureal with a 75 % ownership in the development company, but later they were also bought out by Futureal which has become, in this way, the single owner and investor involved in the monster renewal project comprising 22 hectares of development land. In the meantime, the district government and Rév8 had a hard time fulfilling their financial obligations. According to both Alföldi and Molnár, they ran into financial difficulties, mainly due to the metropolitan government providing only 1.8 billion forints instead of the 3.2 billion promised in 2002. It was in the highest interest of all parties involved, public and private, to find a quick solution so that a premature abortion of the project could be avoided. Following rounds of negotiations, the district government decided to sell further rights to the private investor who, in return, promised to inject more money into the project. Three major amendments were agreed upon. First, five additional parcels were incorporated into the development area.447 Second, local regulations were changed in order to accommodate a new shopping mall, notwithstanding of the fact that it was to block both the promenade and the perpendicular side-streets (Fig. 115.). Third, the definition of built density was changed and the maximum figures raised – in favor of the developer. Furthermore, the district municipality had to complement its contribution to the project’s public budget by taking bank credits, which raised the public program’s estimated costs to 18–20 billion forints from the 15 billion predicted two years earlier.

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Fig. 116. Heightened chimneys in blocks adjacent to the new development.

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These measures solved the immediate budget shortage but they came with a couple of important price tags. Most important to mention is the fact that time pressure left the district government and Rév8 with no room for making proper feasibility studies concerning the proposed amendments. This turned out to be most critical in the case of the raised density and the introduction of the new shopping mall. Lajos Koszorú, member of the plan-jury to which the proposed amendment to the District Regulation Plan was referred, and who was opposed to the amendment,448 gave voice to his fears that the new density figures would allow for the construction of 4,000 studio apartments instead of the initially projected 2,500–2,800 somewhat larger units.449 This, according to him, would not simply result in a dramatic contrast between the new quarter and its surroundings, it would not only overwhelm the local infrastructure, it would also bust the social perspective of Józsefváros with its high density of people in small and low quality apartments. We can add that by adopting these two changes, Rév8 was going to go against one of its most important initial goals concerning the program’s environmental values. After all, its 2002 description of the development insisted that the new buildings were going to promote local identity and to adapt to the existing environment via the conservation of important architectural and urban elements.450 Wounding the redundant street grid and introducing a density alien to the neighborhood certainly do not match this target. Furthermore, the amendments strengthened the positions of the private investor, who gradually took the upper hand in the project. Even more interestingly, Rév8 itself seems to have drifted from the municipality’s to the private developer’s side. This development is psychologically quite understandable. It has to do with the fact that the local government was seen more and more as an obstacle in the way of the development, with Rév8 beginning to realize that it shared with Futureal the aim of a swift realization of the project. After all, the developer depended financially on the speed at which the renewal was going to be carried out, while Rév8 was founded with the main goal of successfully managing the project. Lack of sufficient financial resources and conflicts of interest between the city and district level governments left the district municipality losing ground against the private investor. Under these circumstances, the three-party model, with an independent professional body (Rév8) in charge of the renewal and representing public interests while being a step away from everyday political clashes, was also limited in its ability to secure the project’s initial goals.

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Decisions First, Rationalization Later: The Role of Architecture Competitions Following a 2002 ideas competition which had marginal impact on the promenade’s future landscaping,451 an invited architectural competition was announced in 2005 with the aim of defining the architectural image of the first few blocks and the central public spaces; the Corvin Promenade’s designs.452 Eleven offices were invited, amongst

and radical building schemes.454 Their contribution was complemented by an ideas competition for ‘the gate of the Corvin Promenade’, held among students in the Budapest University of Technology’s advanced master program in architecture. These competitions were extensively publicized, both Rév8 and the Futureal Group referring to them as guarantees for the renewal project’s high architectural and urban design standards. Glossy books and brochures were published and public events organized for the dissemination of the results. Interestingly, projects by the invited architectural firms didn’t really bring progressive, exceptional, or surprising schemes to the development. They instead seemed to be mere instances of ordinary investor projects. In contrast, the student projects were so radical that, while raising interesting questions (for example by tackling the sensitive and hot topic of building high-rises within central Budapest), they were of little help for the renewal’s actual realization by being too distant from the project’s realities. Furthermore, by 2005 when these competitions commenced, the fundamental decisions concerning the project’s urban design had already been met. The central promenade and its geometry were fixed, the building blocks had been allocated, floor-area-ratios and building heights were defined by regulations, and recent amendments provided for a big shopping mall that blocked both the promenade and its perpendicular side-streets. What was left was the surface designs of façades and public spaces that didn’t seriously influence the project’s outcome and its urban impact. The architectural competition’s timing, the range of questions still open to discussion at the time, and the fact that for reasons of opportunism the participating architects were aiming for projects conforming with what they anticipated were the private developer’s expectations, turned the competitions into marketing tools in the developer’s hands that were used to ensure the acceptance and the marketability of the project rather than to actually influence it. From the perspective of Rév8, the competitions helped to justify decisions that had already been taken beforehand.

Chapter 6  The Corvin-Quarter. Emergence of an ‘Absolutely Best Plan’ in the Backdrop of Post-Socialist T ­ ransformation

them the renowned Dutch architect Erick van Egeraat and some of the Hungarian bigshots (Figs. 118. and 119.).453 Rather than commissioning winners, the developer and Rév8 decided to establish architectural guidelines in the form of a handout that synthesized proposals from the competition. While the invited participants had their hands tied by the regulations in force, in spring 2005 students from Harvard Graduate School of Design prepared visionary concepts for the new quarter, focusing on high-rise blocks

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Figs. 118. and 119. Visualizations of the imagined promenade by Erick van Egeraat Associated Architects (left) and M-Teampannon Kft. (right), both competition entries from 2005.

The dynamic relationship between the rationality of decisions and power is a phenomenon theorized by the Danish economist Bent Flyvbjerg in his account on modern democracy in practice, a single case study of a new bus station’s development in Aalborg in the 1970s.455 One of the work’s major conclusions is that reasoning quickly turns into rationalization, and dialogue becomes persuasive rhetoric under the pressures of reality. While in the Enlightenment tradition rationality is considered well-defined and independent of context, Flyvbjerg shows that it is actually context-dependent and that the relevant context is determined by the decision-makers’ power. He claims that power blurs the dividing line between rationality and rationalization, and exemplifies the way rationality is manipulated to gain power through a metaphor uísed by Aalborg’s chief city planner: the story of the ‘bell ringer in Little Town’. In order to set the church clock, ‘he calls the telephone exchange and asks what time it is, and the telephone operator looks out the window towards the church clock and says, ‘It’s five o’clock.’ ‘Good’ says the bell ringer, ‘then my clock is correct.’456 The parties directly involved in the Corvin-Quarter project were, understandably, as eager to accomplish the planned development as were the protagonists responsible for building the bus station in Flyvbjerg’s narrative. And so the role the design competitions and their communication played in the Corvin-Quarter’s case is analogical to the bell ringer’s successful attempt to rationalize his time in ‘Little Town’.

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The Corvin-Quarter in the Public ­Discourse The project has had mixed public reception so far. It has received various diverse criticisms. We have already discussed those reactions that criticized it on the basis of its social impact and of its eliminating an important part of the city’s architectural heritage. As for the first consideration: the project’s social impact was found to be problematic on two accounts: first, because it came with an eviction of the quarter’s former inhabitants, and second, because the new inhabitants – due mainly to the social character of the targeted market demand – formed a highly homogenous social group. According to some of the project’s opponents, the newcomers are alien to the neighborhood and do not have any local binding. They do not use ­ iddle-­Józsefváros’ public spaces, and do not participate in the local social life; they M instead keep their distance from the adjacent neighborhoods. The typical answer on the part of the project’s defenders appealed to the disastrous condition of the neighborhood’s former building stock and to the fact of its ghettoization that had reached critical levels. As a consequence, so the argument went, there was no market interest whatsoever in the area and so the refurbishment was not an economically viable idea; it would have resulted in untenable compromises. Finally, the ghettoization of the neighborhood made it im possible to keep its social structure intact. Lifting ­M iddle-­Józsefváros’ status would have been impossible without reversing the trend of immigration by the poor.

Fig. 120. Tension between old and new: construction of the Corvin Quarter’s second phase.

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Fig. 121. Corporate architecture along the Corvin Promenade.

As to the critique of the project from an architectural point of view: the opponents didn’t blame the project exclusively for the elimination of small-townish blocks. They also questioned the architectural quality of the newly established quarter. For example, the critic and urbanist Samu Szemerey expressed serious doubts about whether the architecture of the Corvin-Quarter was apt to maintain a representative role in the future, despite its construction that is everything but low-cost.457 Imre Pákozdi and Lajos Koszorú also criticized the new development’s architectural aesthetics and built density.458 Pákozdi recently claimed that the project had promised more than what its realization provided. To which György Alföldi, the director of Rév8, responded that the explanation for the lowered architectural standards was the fact that the city government’s financial support lagged behind their initial commitments by 2.7 billion forints, forcing the developer to choose less expensive solutions.459 With due recognition for the fact that the reduction of public investment had a serious impact on the project’s quality, one may note that, beyond the obvious direct effects, this also affected the outcome indirectly. As the private investors gained the upper hand, their tastes started to dominate the architecture of the Quarter as it unfolded. After all, the buildings alongside the promenade did not seem to be cheaply constructed. Their façades were cladded and ornamented by limestone, with glass and stainless steel decorative elements. The construction costs soared; also reflected in the apartment’s high retail prices.460 At the same time, the buildings could not escape falling into the category of corporate investor architecture being built by the score. Furthermore, the project was criticized for a lack of clear urban design goals. Szemerey argues that after the first phase was already completed, it still remained unclear what the local government expected from the development – other than the successful upgrading of its real estate portfolio and the project’s payback.461 He bashes the development for its incompatibility with its built context. According to Szemerey, each and every element of the Corvin-Quarter, from its buildings, public spaces, through public lighting, distances the new from the old, rather than accomplishing a synthesis of the two. Szemerey notes, for example, that the building heights are out of proportion with their environment, caricaturing the neighborhood; he also notes the poor positioning of the shopping mall that blocks the way to the Corvin cinema and bisects two side-streets. His comments cast doubt on whether the project achieved one of its central goals as of 2001, namely that of avoiding the creation of an island-like community. At the already mentioned recent talk in the Budapest Center for Architecture462 György Molnár explained that, while first he was unhappy with the idea of the shopping mall which he saw as a contingency solution for maximizing profit, he now finds it to be the only public space of the Corvin-Quarter where the district’s Roma and poor ‘native inhabitants’ mingle with the posh newcomers and other users from the city. On the other hand, the Corvin-Quarter development has also received plenty of positive responses. First of all, the project is very successful on the market. There is a high demand for its apartments and office spaces, and the shopping mall operates profitably. As an empirical study from 2012 points out, the mall is very popular amongst local residents463 and, as György Molnár argues, is one of the few places in the district where citizens with varied social backgrounds interact.464 The Corvin-Quarter’s achievements and catalyzing effects are also reflected in the fact that it has become an important reference for real estate advertisements promoting apartments 172

and new developments in its adjacency, many of which have been triggered by the ­Corvin-Quarter in the first place.465 It counts in the project’s favor that the general public seems to be satisfied with the development and, furthermore, that in 2010 the project received Bloomberg’s European Commercial Property Award466 in the category ‘Best mixed-use development in Europe’, and in 2014 the Urban Land Institute’s ‘Global Award for Excellence’.467 Conspicuously, most if not all critical voices are raised from an abstract norma-

summarized under the headings of a two-tier municipal regime with a uniquely powerful and autonomous district level, conflicts of interest between the city and its districts, topped by the lack of clarity in the division of authority and competence, the public hand suffering from shortages of financial, human and administrative resources, and the modus operandi of urban planning remaining mostly unchanged, not adapted to conflicts of interest becoming more open. The development was also contested legally, albeit seemingly in a politically motivated manner. The involved protagonists were also local politicians rather than architecture and urban design professionals. Their accusations of fraudulence shifted the public discourse around the project away from rational debate on urban renewal to charges of a criminal nature. According to these accusations, the project’s structure was unfavorable to the public hand, and provided the private investor with development land way under its actual market value.468 While the district’s renewal, including the Corvin-Quarter development, was laid out amid mutual agreement between all political sides, cracks soon appeared in the initial consensus. These conflicts were catalyzed by two events in particular. One occasion for a dispute was provided by the district council’s response, in 2005, to the collapse of the project’s initial financing scheme. According to György Molnár, the main factor behind the grossly insufficient delivery of the metropolitan government’s financial contribution was the fact that the Renewal Fund’s application and evaluation procedures were unfavorable for projects that were not aiming to refurbish the existing building stock but to demolish it and construct new structures.469 Since such projects failed to fulfill the program’s declared criteria, they had practically no chance of getting funding. Despite the promise of the city level administration, the 8th district was thus not able to realize the offered financial support – goes Molnár’s argument. In contrast, the city administration argued that the 8th district owed the city as a result of missed downpayments to the Renewal Fund that were due after the alienation of apartments.470 In the years 2007 and 2008 this debt reached 350 million forints, which automatically rendered the district ineligible for the find’s resources. In 2008 the district council decided to form a negotiating delegation in order to settle the disputes with the city administration.471 In spring 2009, the delegation brokered a deal with Budapest’s local government. This stated that should the district settle its debts, the city level administration will allocate 500 million forints within the Renewal Fund that they can apply for as partial funding of the Corvin-Quarter development’s public

Chapter 6  The Corvin-Quarter. Emergence of an ‘Absolutely Best Plan’ in the Backdrop of Post-Socialist T ­ ransformation

tive point of view lacking any reference to the post-socialist transformation in which the project was embedded. They see the development’s deficits as results of bad decisions and poor professionalism, and do not consider the specific circumstances under which its preparations and execution took shape. These could be

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program.472 Józsefváros was hoping to acquire 2.2 billion forints in the following years through this means, but only a fraction of this sum has been received so far.473 A second occasion for conflicts around the project originated with an emerging gap between the land prices fixed in the initial contract between the municipality and the private developer, and the actual land values by the time the project was to enter its second development phase. In an interview with the author, György Alföldi argues that the renewal’s financial model was based on the idea that the project was to be sold as a whole rather than each plot changing hands in a separate transaction. Such a solution, according to him, was adopted with the aim of securing the project’s marketability, and it resulted in the developer buying land for more than double its market value in the beginning and, later on, paying somewhat under the estimated market rates, as their very investment was responsible for the added value. It would have been unfair to charge them for something they had already paid for by investing, argued Alföldi,474 adding that the public hand was in any case a beneficiary due to the catalyzing effects of the development. However, the project’s political opponents, fueled first by in-fighting within the socialist faction in the district assembly, and later by fights between factions of the political left and right, claimed that this was a fraudulent practice. According to them, the local government should have renegotiated the selling price once land values rose exponentially during the progression of the neighborhood’s renewal. The political disputes initially emerged amongst particular political figures who all belonged to the same party; the socialists. A key spokesperson for the claim that the project’s matters were disorderly was Gábor Hárs, a former district president of the socialists, later their chief whip in the district council. The opinion leader of the other side was György Molnár, who succeeded Hárs as the socialists’ first man in the district. As Molnár remembers in an interview with the author, Hárs and Zoltán Szilágyi, then president of the supervisory board of Rév8 upon recommendation by Hárs, had continuously asked for a thorough review and suggested as auditor Mikroorg, a firm unknown in the real estate business.475 After two smaller reviews in 2005 that both found Rév8’s operations mostly all right, Mikroorg was finally commissioned with a full audit in 2006, initiated by the district municipality’s economic committee and, more specifically, by the very same Zoltán Szilágyi who earlier accused Rév8 of fraudulent conduct. Mikroorg published their report in 2009, accusing Rév8 of causing the municipality a loss of 3 billion forints through their method of selling the full development land a priori,476 and a further 645 million related to apartment transactions.477 Molnár and Alföldi claimed, independently from each other, in interviews to the author that the auditing was conducted in an unprofessional manner. They both pointed out that the report misinterpreted the core logic of the contract. According to them, it made no sense to compare selling prices with actual market values in 2005 as the prices were fixed beforehand based on a progressive calculation, giving no room for interim reappraisals and price adjustments. It would have been unfair to charge the developer for an added value that is only realizable due to Futureal’s own investment. As for Rév8’s apartment purchases, Molnár pointed out that the investigation compared the amounts Rév8 had paid for apartments of an average size of 41 square meters with a selection where the average size was 65 square meters.478 It is known that the nominal value of larger apartments is smaller, and thus the comparison and the conclusion that Rév8 overpaid for the apartments is not pertinent. He also adds 174

that while the investigation was monitoring the administration of Rév8, and accused them of fraudulent conduct, it actually ended up making judgments on the contracts of the Corvin-Quarter development that were all signed by the municipality and had been ratified by both the district’s council and its notary. Gábor Futó, owner and CEO of the development company Futureal, claims that they paid for all the plots in an orderly manner and that the fees were the highest prices configured via open tender.479 Based on Mikroorg’s conclusions, the public prosecutor’s office started a criminal investigation in 2009. The same year saw a new district mayor, Máté Kocsis of Fidesz, taking office following the resignation of Béla Csécsei of SZDSZ amid corruption charges. And yet, in 2013, the new mayor sent a document to the authorities defending the project, criticizing Mikroorg’s investigation and suggesting the assignment of a new auditing firm for the clarification of the situation.480 This move signaled a

its development stalled that time due to the financial and real estate crisis. The local Fidesz faction first backed the campaign, accusing the Corvin development of fraudulence, but by 2013 the construction had picked up again and Kocsis came to see the project as a token of the district’s success – or so Molnár argues.481 Finally, on July 24, 2015, the Prosecutor’s office announced that the investigation was cancelled and the Corvin-case had been dropped.482 The prosecution’s storyline clearly portrays the Corvin-Quarter development’s controversial reception. The renewal project began in an era in which bad experiences made any project of this size and involving collaboration and negotiations between the public and private hands seem suspicious. The accusations of fraudulence, and some of the personal motivations behind them, shifted the public discourse around the project away from rational debate on urban renewal – which had anyways seemed difficult – to charges of a criminal nature. The new mayor’s volte-face illustrates another issue typical to post-socialist Budapest. Resource shortages of the public hand have made local politicians see largescale private projects, such as the Corvin-Quarter, as providing them with a rare opportunity to carry out much-needed developments in the district. This fact contributed to the rise in prestige of private developers and contributed to their taking the upper hand in their collaborations with local governments. The case under investigation, the Corvin-Quarter development, demonstrated how the causal relations introduced in this thesis’s abstract model determined the actual outcome of a specific urban renewal project. It revealed a distinctly post-socialist way in which the participation of public authorities in the workings of the market may distort the processes. Even if the public agencies engage in active cooperation with the private developers and their interactions are free of corruption, the authorities may lack sufficient resources, the division of responsibilities and competences between them and their partners may be indistinct, and political stand-offs may ensue on the public side: all this may result in the private actor’s dominance, leading to unintended and undesirable consequences or to the failure of the public authorities to reach their goals.

Chapter 6  The Corvin-Quarter. Emergence of an ‘Absolutely Best Plan’ in the Backdrop of Post-Socialist T ­ ransformation

paradigm change as Kocsis was a loud opponent of his predecessor, Béla Csécsei, and entered office in 2009 with the pledge of revising the Corvin-Quarter’s contracts as

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351  ‘Urban Renewal Program of Józsefváros’ (Municipality of Budapest’s 8 th District, 1998).  352 Rév8 (Hungarian abbreviation for Rehabilitation and Urban Development Company of the 8 th District) was founded in 1997, based on experience from the neighboring 9 th district’s SEM IX. company, which was, however, only involved in planning the block-scale rehabilitation and in managing the privatization of real estate there.  353 Furthermore, there are visible differences between different neighborhoods within the southern area. These originated in the distinct proceedings at the start of these neighborhoods’ respective urbanization processes. For example, Pest’s first suburb, around what is today Horváth Mihály square, was developed with spontaneous parcelling and land-actions. Despite attempts at regulation, parcel boundaries were ultimately defined by contingent shaping of the carttracks, canals and field-edges, and these developments resulted in irregularities in the urban grid.  354  The Act XXXVI/1872 declared the unification, which took effect on January 1, 1873, while the new city council took over administrative affairs on November  17 of the same year.  355  See note  84 above.  356  János Ladányi, ‘Gondolatok a Középső-Józsefváros rehabilitációjának társadalmi összefüggéseiről’ [Thoughts on the Societal Context of Middle-Józsefváros’ Renewal], in Egyenlőtlenségek, redisztribúció, szociálpolitika, ed. Ladányi, 334 -48 (338 -9).  357 Ibid., 339.  358  In the census of 1990, 997 of the 8 th district’s total population of 92,386 declared Roma ethnicity. 1990 évi Népszámlálás; anyanyelv, nemzetiség településenként [Census of 1990; Population According to Mother Tounge and Ethnicity in Territorial Splitting] (Budapest: Központi Statisztikai Hivatal, 1993), accessed November 7, 2016, https://library.hungaricana. hu/hu/view/NEDA_1990_anyanyelv_ telep/?pg=161&layout=s  359  Data concerning ethnicity is declared voluntarily during the census in Hungary. Due to a low appreciation of the Roma, this results in only a fraction of them actually declaring themselves as Roma. The actual figure is estimated to be around double.  360  The absolute figure, 2771, is more than twice as high as that in the second-ranked 7 th district where 1157 Roma reside. ‘A népesség nemzetiségi hovatartozás szerint’ [Population According to Ethnicity], in Census of 2001 (Budapest: Központi Statisztikai Hivatal, 2001), accessed July 13, 2016, http://www.nepszamlalas2001.hu/hun/kotetek/06 /01 / data/tabhun/4 /load01_11_0.html  361  In the 1990 Census, 9303 respondents identified themselves as Roma, while estimates based on the ratio of Roma kids in elementary schools were at 32 ,186. Gábor Kertesi, Gábor Kézdi, Cigány etnikai gettók (Budapest: Magyar Tudomá­ nyos Akadémia Közgazdaságtudományi Kutatóközpont, 1997 ).  362  Ladányi, ‘Gondolatok a Középső-Józsefváros rehabilitációjának társadalmi összefüggéseiről’, 340.  363 Ibid., 343.  364 Ibid., 341.  365 Ibid., 344 .  366 Target numbers of the City Council’s Executive Committee (Fővárosi Tanács Végrehajtó Bizottsága) until the end of the third Five-Year Plan, 1963 .  367 János Brenner, ‘A Józsefváros egy részének szanálási terve’, Városépítés 2, no.  2 (1965), 22–7.  368 Tömő street 48 .  369 Árpád Mester, Józsefváros Részletes Rendezési Terve [Detailed Development Plan of Józsefváros] (Budapest: BVTV,

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1971).  370  In the 8 th district 665 apartments were newly built instead of the planned 18 ,000 between 1960 and 1970. Attila Csaba Kondor, Balázs Szabó, ‘A lakáspolitika hatása Budapest városszerkezetére az 1960 -as és az 1970 -es években’, Földrajzi Értesítő 56, no. 3 –4 (2007 ), 237–69 (253).  371 Decree 32 /1994 (July  5) of the Municipality of the 8 th District on the Detailed Development Plan for Central Józsefváros’ Northern Quarter.  372 Anna Perczel et al., Közép-Józsefváros, Északi Városnegyed, Részletes Rendezési Terv [Middle-Józsefváros, Northern Quarter, Detailed Regulatory Plan] (Budapest: VÁTI, 1994), 21. Anna Perczel et al., Zöld sétány a Józsefvárosban [Green Promenade in Józsefváros] (Budapest: VÁTI, 1992).  373  In France, a mixed company (Société d’Économie Mixte, abbreviated as SEM) is a public limited liability company the majority of whose capital is owned by one or more public entities (e. g., the state, local governments or other public institutions). Its public ownership must range between 51 % and 85 % and the public hand has to have at least one representative and half the votes in their boards. SEMs can perform management operations, construction, can take over public services, industrial, commercial or other activities of public interest. They can also perform design tasks, implementation, service, and maintenance on behalf of the public hand. They are often involved in managing urban renewal programs. The model allows for the integration of private capital and know-how and for the professionalization of public tasks. It has been in use since the 1980 s, and after its initial success was exported to cities abroad, amongst them Budapest.  374  A Corvin-Szigony Projekt ingatlanpiaci elemzése, [Analysis of the Real Estate Market for the Corvin-Szigony Project] (Budapest: ECORYS Magyarország Kft., 2002).  375  A Corvin Sétány Program értékeinek teljesülése [Fulfillment of the Corvin Promenade Program’s Target Qualities] (self-audit, Budapest: Rév8 Plc., 2009).  376 Government Decree 32 /1969 (September  30).  377 Regulation of the Council of Ministers 90/1988 (December 22).  378  Ibid., Article 1, Section 2 , translation by the author.  379  Budapest Capital Council Decree 5/1989 (August  31), Article  2, Section 1.  380 See note 375 above.  381  The name Rév8 is the three-letter abbreviation for ‘Rehabilitációs és Városfejlesztési Zrt.’ [Renewal and Urban Development Plc.] followed by the number 8 for the 8 th district.  382  This model is often applied in the case of large urban developments initiated by the public hand. Take the example of the HafenCity in Hamburg, currently one of the largest development projects in Europe. In 1997, a port and location development company (GHS) was set up there to manage the development of the project – since 2004 it has been known as HafenCity Hamburg GmbH. It is responsible for developing and managing land owned by the city of Hamburg and located in the HafenCity area. ‘Development Management and HafenCity Hamburg GmbH’, accessed May 17, 2017, http://www.hafencity.com/en/management/development-management-and-hafencity-hamburg-gmbh. html  383  Decreed by the council of the 8 th district on June 29, 2000.  384  György Alföldi, in an interview with the author, September 27, 2014 .  385  Interestingly, the plan’s opponent, appointed by the city council, was Lajos

Image DVD-ROM (39 min.), directed by Klára Trencsényi (Budapest: Inforg Stúdió, 2011).  408 Nóra Somlyódi, ‘Édes grundok – Ingatlanfejlesztés a Józsefvárosban’ [Sweet Sand-Lots  – Real Estate Development in Józsefváros], Magyar Narancs 41 (2005), accessed May  20, 2010, http://magyarnarancs.hu/belpol/edes_ grundok_-_ingatlanfejlesztes_a_jozsefvarosban- 64658  409  ‘Mi épül itt?’ [What is being built here?] (Public debate on the Corvin-Quarter development, Contemporary Architecture Center, Budapest, May  20, 2010).  410 ­György Alföldi, in an interview with the author, September 27, 2014 .  411  Józsefváros Városfejlesztése [Urban Development of Józsefváros], study (Budapest: MaHill and SEM IX, 1996).  412 György Molnár, ‘Feljegyzés Kósáné Kovács Magda miniszter asszony részére a Demszky Gáborral történő találkozáshoz’ [Memorandum to Minister Magda Kósáné Kovács for her meeting with Gábor Demszky] (July 18 , 1995), received from György Molnár, May  7, 2013.  413  ‘Lakásviszonyok – 2000 ’ [Housing Circumstances – 2000], study (Budapest: MONITOR Társadalomkutató Intézet és Módszertani Központ, 2000), 17.  414 Ibid., 16. Average number of rooms was 1.37.  415  Anna Perczel, in an interview with the author, May  10 , 2013 .  416  ‘Józsefvárosi rehabilitáció’ [Renewal in Józsefváros], roundtable discussion at the Budapest University of Technology, September 26 , 2012 .  417 ‘Corvin sétány. Egy városregenerációs projekt története és jövője’ [Corvin Promenade. The story and future of an urban renewal project] (public debate organized by ‘Budapest Kör’ in the Budapest Center for Architecture (FUGA), Budapest, October  19, 2016).  418 János Ladányi, Lakóhelyi szegregáció Budapesten [Residential Segregation in Budapest] (Budapest: Új Mandátum Kiadó, 2008).  419 See note 414 above.  420  See note 394 above.  421 György Alföldi, in an interview with the author, September 27, 2014 .  422  The chart contains the names of 978 former inhabitants, 500 of whom were given cash, while only 478 exchanged apartments within the 8 th district. 115 former tenants received compensation under 5 million forints. ‘Tenant Dislocation Chart’ (Budapest: Rév8 Plc., 2003). Received from György Alföldi on October  8, 2016.  423 On the windup of the slum ‘Dzsumbuj’ in Ferencváros see: ‘Hallott már a Dzsumbujról? Ma bontják a gettó utolsó épületét’, index.hu, August 29, 2014 , accessed Octo2014 /­ ber  28 , 2016 , http://index.hu/belfold/budapest/­ 08 /­2 9/­dzsumbuj/  424 János Ladányi, Tünde Virág, ‘A szociális és etnikai alapú lakóhelyi szegregáció változó formái Magyarországon a piacgazdasági átmenet időszakában’ [Changing Patterns of Social and Ethnic Residential Segregation During the Transition to the Market Economy], Kritika 38 , no. 7–8 . (2009), 2–8 .  425 Márton Czirfusz et al., ‘Gentrification and Rescaling Urban Governance in Budapest-Józsefváros’, Intersections. East European Journal of Society and Politics 1, no 4 (2016): 55 –77.  426  These were erected under Orczy street 31, Orczy square 4 , Diószeghy Sámuel street 15, Magdolna street 33, Dankó street 34 , József street 47, Vajdahunyad street 23 , Práter street 21 /a, and Práter street 30 –32 .  427  A Corvin Sétány Program értékeinek teljesülése [Fulfillment of the Corvin Promenade Program’s Target Qualities] (self-audit, Budapest: Rév8 Plc.,

Chapter 6  The Corvin-Quarter. Emergence of an ‘Absolutely Best Plan’ in the Backdrop of Post-Socialist T ­ ransformation

Koszorú who was previously involved in developing the 1999 version of the Corvin-Quarter’s central promenade.  386  István Schneller, in an interview with the author, May 12, 2011. According to Schneller, the district’s socialist deputies have succeeded to get the socialist deputies in the City Council to carry through a local order in their favor.  387  György Molnár, in an interview with the author, May 7, 2013.  388  Only the 6th, 7th and 8 th districts had a ratio of over 70 % in this regard; whereas peripheral districts with some of the largest proportions of single family household neighborhoods, such as the 11th, 16th, 17th and 22nd districts, had a mere 10 –15 % of their housing in state ownership by 1993. Data of the Hungarian Central Statistical Office quoted. Lichtenberger et al., Stadtverfall und Stadterneuerung in Budapest, 106 .  389  Act LXXVIII/ 1993 (July  30).  390  Decree 33 /1994 (June 10) of Budapest’s General Assembly.  391 Decree 46/1997 (August 13) of Budapest’s General Assembly.  392 The Urban Rehabilitation Resources of Budapest supported renewal projects with 5.4 billion Forints between 1997 and 2004 , of which 4 .1 billion were spent on refurbishing municipally-owned residential buildings, with another 1.3 billion on subsidized development of complex infrastructural and public space projects. A further 4 .6 billion was given out in the same period for the renewal of privately owned apartment blocks.  393  A Fővárosi Városrehabilitációs Keret működésének kiértékelése [Evaluation of Budapest’s Urban Renewal Fund] (Budapest, Városkutatás Kft., 2001).  394 Eszter Somogyi, Hanna Szemző, Iván Tosics, ‘Városrehabilitáció a kétszintű önkormányzati rendszerben: budapesti sikerek és problémák (1994 –2006)’ [Urban Renewal in the Dual-Tier Municipal System: Successes and Issues in Budapest (1994 –2006)], in A történelmi városközpontok átalakulásának társadalmi hatásai [Societal Impacts of the Historic Centers’ Transformation], ed. György Enyedi (Budapest: MTA Társadalomkutató Központ, 2007 ), 69 –91 (77 ).  395 Ibid., 80.  396  György Alföldi, in an interview with the author, September 27, 2014 .  397 Demszky, Elveszett szabadság, 269.  398  István Schneller, in an interview with the author, March  1, 2011.  399  István Echter, Andrea Iván, György Molnár, Kerületi koncepció-vázlat [District Concept Sketch], (study presented to the Dictrict Council, Budapest, 1995).  400 Ibid., 4 .  401  György Molnár, Fejezetek a józsefvárosi kerületfejlesztés történetéből [Chapters from the history of renewal in Józsefváros], part  2 , accessed October 14 , 2016 , http://mijozsefvarosunk.blog.hu/ 2013 / 04 / 07/ 11_az_elmult_huszonev  402 See note 377 above. 403 Later OTP Bank was bought out by the district municipality that is currently the owner of 60.9 % of the company’s shares.  404 Alföldi told the author, in an interview made on September 27, 2014 , that he was jointly approached with the job offer by two local deputies, György Molnár from the Socialist Party and Róbert Juharos from FIDESZ. The liberals were conspicuously absent.  405  ‘Értelmiségi könnyek nélkül’, epiteszforum.hu, May 29, 2005, accessed April 13, 2016, http://epiteszforum.hu/ertelmisegi-konnyek-nelkul  406  ‘Corvin-Szigony Projekt, Rehabilitációs felmérés’ (Budapest: MONITOR Társadalomkutató Intézet és Módszertani Központ, 2000), 16.  407  Corvin Variációk, Moving

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2009).  428  See note 408 above.  429 ‘Corvin-Szigony Projekt. Megvalósíthatósági tanulmány’ [Corvin-Szigony Project. Feasibility Study] (Budapest: Rév8 Plc., 2000).  430 Ibid., 26 –7.  431  Local Order 509/2000 (June  29) of Budapest’s 8 th district municipality on the complex renewal of the Corvin-Quarter.  432  Local Order 32 /2001 (October 26) of Budapest’s 8 th district municipality on designating local urban renewal areas and on the execution of their renewal.  433 Rév8 , ‘Corvin Sétány Program’ [Corvin Promenade Program], accessed October 26 , 2016 , http://rev 8 .hu/aktualis-projektek/corvin-setany-program/  434 On March 1, 2001. ‘Bid of the Corvin-Szigony Project’ (Budapest: Rév 8 Plc., 2001).  435  Proceedings, Economic Committee of the 8 th District’s Municipality, 11th ordinary session on June 28 , 2001.  436  Ibid. Comments from György Alföldi and Zsolt Császy, head at the time, appear in the meeting's minutes.  437 October 18 , 2001, signed by mayor Béla Csécsei (on behalf of the municipality), CEO Gábor Császy (on behalf of Rév8), and CEO Péter Hegyi (on behalf of the developer).  438  2 billion within 30 days of signing the frame contract (for the empty plots indicated in the contract’s supplement III.); 2 billion by October 31, 2002 (for the empty plots indicated in the contract’s supplement IV. and for blocks 109A, 109 B, 119 B, and 125A); 1.5 billion by October 15, 2005 (for blocks 113A, 113 B, and 125B); 1.5 billion by June 30, 2004 (for blocks 116A, 116B, 122 A, and 122B); 1.5 billion by June 30, 2007 (for blocks 119A and 123); and 1.1 billion by December  31, 2008 (for blocks 126 and 136); – according to point 4 .2 of the frame contract.  439 Article 13 of the frame contract provided that in case the developer missed the deadline for an installment and, following the municipality’s appeal, fail to discharge its obligations within the following 30 days, the contract would become void.  440  In preparation for a local order, a sketch prepared by Rév8 offered both options to be considered by the deputies. ‘The Corvin-Szigony Project’s New Tender Concept’ (Budapest: Rév8 Plc., June 6 , 2002).  441 Local Order 349/2002 (June 6) of Budapest’s 8 th district municipality. The public program includes, roughly speaking, the costs of inhabitant relocation from the development area, public space and infrastructural developments, and administrative tasks concerning the project. See Fig. 114 .  442  György Alföldi, in an interview with the author, September  27, 2014 . Note that the city level government did not offer direct subsidies but suggested the district to apply for funding via the city’s Renewal Fund scheme.  443  ‘Frame Contract’ between the 8 th District’s Municipality, Rév8 Plc., and Corvin Real Estate Development and Urban Renewal Inc., July  24, 2003 , received from György Molnár, October 27, 2016.  444 Option Contract between the municipality of the 8 th district and Rév8 Plc. July 23, 2001, modified on October 17, 2001, received from György Molnár, October  27, 2016.  445  The Frame Contract’s Section 4 , Point 1. See note 443 above.  446  Owner and head of the Futureal Group, Dr. Péter Futó, was president of the Confederation of Hungarian Employers and Industrialists. Futureal entered the Corvin-Quarter project after having developed the exclusive La Siesta housing estates in Buda with 80 high-end apartments.  447  Agreement on the extension

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of the development area, December 16, 2004 , received from György Molnár, 2016. The added parcels’ topographical lot numbers are: 36332, 36333, 36353, 36376, and 36382 .  448  According to regulations, the amendments had to be debated in a plan-jury set up by the Budapest city municipality. The jury’s judgment, however, had no legal effect on the proposal. While the plans were rejected by the jury for their high density, soon after the amendment came into force. This story can be read as an example of the vagueness of the boundaries of competence between the city and its districts.  449  Somlyódi, ‘Édes grundok’, 2005.  450  ‘Description of the Corvin-Szigony Project’ (Budapest: Rév8 , 2002), 6.  451  5 of the 12 valid entries were awarded by the jury headed by district mayor Béla Csécsei, Rév8 CEO György Alföldi, and Budapest’s chief architect, István Schneller for their ideas on the promenade’s configuration and character. ‘Corvin Szigony Projekt Környezetalakítási Nyilvános Tervezési Ötletpályázat’, Építészfórum, March 27, 2003 , accessed November  7, 2016 , http://epiteszforum.hu/corvin-szigony-projekt-kornyezetalakitasi-nyilvanos-tervezesi-otletpalyazat  452  Somlyódi, ‘Édes grundok’, 2005.  453  List of participants for the central promenade’s designs: Erick van Egeraat Associated Architects Budapest, Első Magyar Építési Rt. Építőművészeti és Mérnöki Iroda, Építész Stúdió Kft., Középülettervező Rt., M-Teampannon Kft., ­Roeleveld-Sikkes Architects Hungary Kft. Participants for the designs of block 119 B: Archimago Kft., Bálint és Társa Építészek Irodája Kft., Fernezelyi-Basa Iroda Építészműterem, Tanos és Vonnák Építész Stúdió Kft., Vadász és Társai Építőművész Kft.  454  Urban Design Studio ‘Provoking a New Form of Urbanity: The Corvin Promenade, Budapest’, Course Number: STU-01509 –00, Instructors: Rodolfo Machado, Felipe Correa, Harvard GSD, Spring 2005 .  455  Bent Flyvbjerg, Rationality and Power. Democracy in Practice (Chicago: The University of Chicago Press, 1998).  456 Ibid., 97.  457  Samu Szemerey, ‘Promenád a grundra. A rettentő Corvin Sétányról’, Magyar Narancs 4 , January  28 , 2010.  458 See notes 405 and 413 above.  459  See note  417 above.  460  Square meter prices were 450,000 forints and up, competing with the market value of apartments in green areas of the Buda hillsides.  461 Szemerey, ‘Promenád a grundra’, 2010.  462 See note 417 above.  463  Orsolya Ferenczi, ‘Gentrification and Community Building: Social Processes in the Corvin Quarter of Budapest’ (Master Thesis, Budapest: Central European University, 2012), 30. By conducting semi-structured interviews with the dwellers of Vajdahunyad street 10, Ferenczi realized that even the poorest inhabitants frequent the mall on a regular basis – more than once a week – and the promenade is also a frequented place, regularly visited by children and families for afternoon walks and games after school. To conclude, Ferenczi points out the shopping mall’s success in being a real meeting point integrating wealthy and poor.  464 ­György Molnár, in an interview with the author, November 16, 2016.  465  See for example: ‘Our development is located in Prater Street 73, a short walking distance from the famous Corvin Promenade’ – goes the advertisement of Práter Park Residences, a new development in Práter street. Accessed November 15, 2016, http://praterpark.

476  While the 2002 contract declared land price to be 60,000 forints per square meter rising to 71,000 in the last project phase, the investigators claim that during the 2005 amendment to the frame contract the municipality should have renegotiated the prices. According to them, 100,000 forints should have been the realistic square meter price. Péter Zsidai, ‘Végjáték a sétányon’, magyarnarancs.hu, April 4 , 2012, accessed November 29, 2016, http://magyarnarancs.hu/belpol/vegjatek-a-corvin-setanyon-79463  477 Sándor Ábrahám et al., Rév8 Zrt. szervezetének és gazdálkodásának átvilágítása [Monitoring the Organization and Administration of Rév8 Inc.] (Budapest: Mikroorg Szervezéstechnikai Kft., July  10 , 2009).  478  György Molnár, ‘Megjegyzések a Mikroorg átvilágítási anyagához’ [Comments on Mikroorg’s Investigative Materials], provided to the author by György Molnár via email, December 28 , 2015.  479  Brückner, ‘Szigonytámadás’, 2010.  480  ‘Letter to Budapest’s Police Department, Division for Corruption and Economic Crime’, July 18 , 2013. Provided to the author by György Alföldi via email on April 13 , 2017.  481 See note 469 above.  482  Péter Zsidai, ‘Az ügyészség feladta a Corvin-projekt mutyigyanújának nyomozását’, vs.hu, August  24, 2015, accessed November 29, 2016, http://vs.hu/kozelet/belpolitika/az-ugyeszseg-feladta-a-corvin-projekt-mutyigyanujanak-nyomozasat1–0824 #!s0 

Chapter 6  The Corvin-Quarter. Emergence of an ‘Absolutely Best Plan’ in the Backdrop of Post-Socialist T ­ ransformation

hu/en/about-the-project/  466  The Corvin-Quarter was named the best mixed-use development project in Europe at the European professional competition International Property Awards, organized jointly with Bloomberg Television. Accessed November  15, 2016, http://www.futureal. hu/en/awards/awards/european_commercial_property_ awards_2 .html  467  Thirteen real estate developments from around the globe, including six in North America, four in Europe and three in Asia were selected as winners in the 2014 Urban Land Institute (ULI) Global Awards for Excellence competition, widely recognized as the land use industry’s most prestigious recognition program. Accessed November  15 , 2016 , http://uli.org/press-release/2014 -­ global-awards-excellence/  468 Gergely Brückner, ‘Szi­ gonytámadás’, Figyelő Online, March 23, 2010, accessed January 15, 2016, http://figyelo.hu/cikkek/141018_szigonytamadas  469  György Molnár, in an interview with the author, November 16 , 2016 .  470 As required by Act LXXVIII/1993 (July 30).  471 Municipal Council Decree 660/2008 (December 17 ).  472  The delegation’s report was heard at the Municipal Council’s sitting on May 6, 2009 and can be read in the sitting’s minutes. Accessed April  4 , 2017, http://www.jozsefvaros.hu/tu_dokumentumok / 30 0 _ 20 0 9 05 0 6 _corvin_setany_program_-. pdf  473 Claimed by György Molnár, see note 469 above.  474  György Alföldi, in an interview with the author, November 26 , 2012 .  475 See note 469 above. 

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This book was organized around a particular case study – that of Budapest’s post-socialist urbanization. It explored the causal nexus between historical legacies, the characteristics of the systemic change in 1989–1990 and the production of space following it, and described the tensions and distortions of the resulting urban development. Although the study is based on a single case, and thus it is not comparative in itself, it provides more than a description of one case under investigation. Between 1990 and 2010, Budapest underwent a process of transformation comparable only to those that occurred around the turn of the 19th and 20th centuries, and after the Second World War in the 1950s. After decades of a party-state system, political transformation and the following decentralization, combined with the rise of a market economy and private demand, triggered a new cycle of developments in the city. Post-socialist urbanization brought with it rather particular symptoms, such as a near-total absence of large-scale public projects of cultural and symbolic significance or the fact that urban development was mostly characterized by business-dominated development projects not integrated into any grand urban design. In writing this book, the author was motivated by the aim of providing a systemic explanation for this syndrome, with the hope of contributing to a better understanding of the era under investigation and of establishing an apparatus for future comparative studies.

Delineating the Examined Time Period The first free parliamentary elections in 1990 marked the beginning of a new era in Hungary, that of the Third Republic.483 Another election, in 2010, yet again turned out to provide a milestone as the winner, the Orbán-led Fidesz, took heavy measures to recentralize the system of governance.484 Thus, the period under investigation in this study, that between 1990 and 2010, is not arbitrarily selected: it has a natural starting point and a natural end-point. The post-2010 trend of centralizing decision-making competences with the national government has also had an impact on Budapest’s production of space. Conspicuously, the state initiated a large number of symbolic projects, ranging from the Prime Minister’s and some Ministries’ move to the royal castle area to the erection of scores of new sports facilities.485 As private, especially foreign, investment in the construction sector fell to strikingly low rates between 2010 and 2015,486 the state has also emerged as the most important agent and lever of urban development in the period – as opposed to the public hand’s subordinate role in the preceding two decades. Primarily based on finances from the European Union’s Cohesion Funds, the state acted as the leading investor in these years. In order to subject the main developments to firm governmental control, urban planning was also subjected to recentralization. Focal developments were removed from local government jurisdiction and subjected to regulation by special laws and decrees. 487 The current government’s centralization drive is far from doing what would, in fact, be needed: a rational corrective to the decentralization zeal of the early 1990s. If the decentralization drive of that period was excessive, it at least remained within the framework of a 182

democratic government in the making. The current drive at recentralization is part of a general trend leading away from liberal democracy and towards establishing an illiberal state488. One can only hope that Hungary will find, in the not-so-distant future, a way to recalibrate its structure of local governance and settlement planning in such a manner which is both rational and democratic. This would yet again open a new era in Budapest’s urbanization. I urge the reader, however, to keep in mind that the U-turn of the period following 2010 is not part of the era under investigation in this study. It rather marks the end of the examined period.

Meaningful case studies that focus on a unique story presuppose general concepts and hypotheses in terms of which the case under examination is interpreted. This book started out from the assumption that the story of Budapest’s urban development, planning, and governance between 1990 and 2010 is not a mere sequence of contingent events but is governed by general structural factors. Actually, three main structural factors combine to explain the process; they have been presented in Chapters 2 to 4 as three narratives that together provide us with the bare bones of an explanation of the syndrome of Budapest’s recent urbanization. As was already explained in Chapter 1, which was dedicated to issues of methodology, there are two reasons why I decided to use the term narrative. First, the explanatory relationships unfold in the form of a story; that is, they are grafted upon a historical process. Second, the explanatory pattern I developed cannot be found as given ‘out there’: it has to be constructed and applied to the material collected in the form of an interpretive framework. Outcome 1: Systemic Explanation of the Syndrome of Budapest’s Post-Socialist ­Urbanization Thus, the model outlined in this book consists of three building blocks that I have presented as three narratives. The first – I called it the Socialist Urban Legacy Narrative – focused on four main internal tensions of socialist urbanization: under-urban ization; housing inequalities generated by socialism’s administrative allocation policies; irrational land-use; and permanent shortages of resources, including space. The narrative described how these premises – mediated by the transformation crisis, and the excessive decentralization of both decision making and resources – resulted in the proliferation of large and introverted private investor projects not integrated into any grand urban design. The second building block, called here the Decentralization Narrative, was based on the main observation that after the regime change, the monolithic power geometry characteristic of the party-state system uniting all collective decisions within a single, monocentric hierarchy, was radically – in some regards, excessively – decentralized in the name of democracy. This narrative provided an account of the nexus between this phenomenon and the inability of municipal governments to develop a proper vision of how the city should develop or generate and keep structural changes under its control. This, in its turn, resulted in an absence of the city’s significant top-down restructuring and in an urban development mostly characterized by

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The Book’s Apparatus and Outcomes

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private investor projects. The third building block – I called it the Kulturkampf Narrative – consists in a reconstruction of the links between deep cultural and ideological divisions left over from the pre-war period and not allowed to be openly discussed in socialist Hungary on the one hand, and on the other hand the failure of large-scale projects of cultural and symbolic significance to materialize decades later, after the regime change. With the three building blocks at hand, the book then proceeded to point out that they all converge on the same syndrome. No matter whether one begins with socialism’s monolithic power geometry and the internal tensions of socialist urbanization, with the post-socialist transformation crisis and the mismatch between excessive decentralization of municipal power and the preservation of the structure of urban planning adapted to the demands of the old party-state regime, or with the ideological divisions inherited from the pre-communist past, the narratives point towards the very same combination of outcomes in post-socialist urbanization. Thus, rather than extinguishing each other’s effects, the three narratives yield mutually supportive stories and constitute a systemic interpretation of the changes characteristic of the period under investigation. The book thus suggests a combined and synthetic picture drawn from the three narratives, and presents these as building blocks for a single model which provides a systemic explanation for the seemingly disorderly and unrelated phenomena characterizing Budapest’s post-­ socialist urban development. This is the first important result of this book. The story is structured so as to provide systematic links between micro-narratives and a unified meta-narrative. The resulting model is, then, systematic enough to allow the data to be integrated into a formal scheme. Hopefully, that scheme will serve as a visual aid for grasping the way the model’s building blocks are related to each other. So the model, while informally built, can nevertheless be mapped onto a formal scheme. This does not make it closed or static. It provides a wide interpretative framework capable of accommodating further particular micro-narratives. It is, thus, an open model that does not claim to provide a holistic explanation of the phenomena under investigation. It is in this spirit that the book elaborates in some detail a handful of micro-­ narratives, such as the causal relationship between the Tulip-Dispute in the 1970s489 and the outburst in the post-socialist era of a new culture war, or the nexus between the introduction of Budapest’s decentralized, two-tier municipal regime and the public hand’s inability to generate structural change and keep it under its control.490 Outstanding among the micro-narratives told in this book is the story of the Corvin-Quarter development that tells us how the local government of Budapest’s 8th district engaged in integrating a private investor-cluster into their district renewal program.491 The in-depth study of this development provides an empirical story that makes the macro-level abstract model of interactions vivid. It exemplifies the way the causal relations established in the model materialize in an actual project and determine its outcome. Furthermore, it illustrates another phenomenon typical for post-socialist Budapest: the shortage of resources under the control of public authorities explaining how local politicians have been moved to seek public-private partnership 184

characteristics of the post-socialist transformation. First, the old regime’s economic crisis, followed by a transformation shock, left the district without sufficient means to carry out a self-financed housing renewal project. Second, the rapid privatization of real estate resulted in excessively fragmented ownership conditions and burdened the tenants-turned-owners with the responsibility of carrying out long overdue refurbishment tasks – these people typically lacking the economic means necessary for carrying out such tasks. This made coordinated renewal extremely difficult, at the same time deterring big private investors due to the fragmented ownership structure of a deteriorated neighborhood. The combination of these factors pushed the district towards the idea of a tabula rasa renewal, which later materialized in the form of the Corvin-Quarter development: an example of the rise in prestige of private developers. Outcome 2: Introducing a Distinctly Post-Socialist Distortion to the Public-Private ­Relationship The issue of public-private partnership takes us to the Corvin-Quarter study’s next conclusion. Public-private partnership is famous for its tendency to generate a wide variety of distortions. There are three well-investigated types of such distortions: excessive public intervention disrupting the normal workings of the market, cooperation of public and private agencies tending to be tainted by corruption, and public authorities taking a laissez-faire attitude towards private projects. My study uncovers a fourth, hitherto unexplored type of distortion based on the facts of insufficient resources, a lack of clarity in the division of competence, and political stand-offs on the public side; as well as the dysfunctional character of urban planning inherited from the socialist past not having adapted to conflicts of interest becoming more open. The case study of the Corvin-Quarter project suggests that such factors can result in the private actor taking the upper hand even if the agreements between public and private actors are transparent, and even if the public authorities do not take a laissez-faire attitude towards urban development. This, in its turn, leads to unintended consequences and a failure to promote the public interest. As a corollary to these results, my case study came to the conclusion that under the circumstances characteristic of the Corvin-Quarter project, even conscious attempts to mitigate the distortions in public-private partnership may be frustrated. The project was devised in the form of a three-party cooperation, with an independent professional body in charge of the renewal and representing public interests while being a step away from everyday political clashes. We could see that even this body was limited in its ability to secure the project’s initial goals. Its story, as it was reconstructed in the book, is one of a nominally independent body owned by the public hand and meant to represent the public interest progressively drifting from the municipality’s to the private investor’s side. The book explained this phenomenon of a general trend of local governments, unable to generate and keep structural changes under control, engaging in cooperation with private developers for what have become some of Budapest’s most

Chapter 7  Conclusions and Lookout. An Abstract Model of Post-Socialist U ­ rbanization Based on and Applied to the Case of Budapest

in large-scale projects, such as the Corvin-Quarter, and how the private partner gained predominance over the public authorities. In the case of the renewal under investigation, the failure of a previous plan – aiming at a piecemeal rehabilitation of the district and the preservation of its valuable heritage492 – can also be directly linked to

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symbolic developments in recent years. It is in this way that investor urbanism has become the ‘absolutely best plan’ for Budapest’s local politicians of the 1990s and 2000s, allowing private developers to dominate their collaborations with the public authorities, often marginalizing thereby the public goals within these projects. The discovery of this distinctly post-socialist model for the distortion of the public-private relationship is a second important outcome of this book. Outcome 3: The Abstract Model as a Conceptual Apparatus for Future Comparative Studies While the Corvin-Quarter in-depth study and other micro-narratives told in my book are interesting in their own right, the construction of a general model, abstracting the narratives from particular places and protagonists, has led beyond telling stories consisting of sequences of contingent events, and in the direction of a systemic explanation. My hope is that the model’s level of abstraction allows it to serve as a base for future comparative studies of post-socialist urbanization in East Central Europe and elsewhere. After all, the three building blocks are not arbitrary generalizations of particular facts of Hungary’s road from communism to democracy and market economy. Rather, they represent general regularities characteristic of the socialist system and of the transition from socialist party-state rule to capitalist democracy. Thus, even though in this book I presented my abstract model on the basis of a particular case, that of Budapest, and applied it to that single case, the model’s conceptual apparatus and general hypotheses provide a framework in terms of which a broad comparative study can be conducted, or so I hope, leading ultimately to an extension of our findings to other cases from the region and, in this way, testing its framework against wider empirical material. Let me illustrate this claim with the examples of the Kulturkampf and Decentralization Narratives. My book investigated in some detail the clash of ideologies within the Hungarian intelligentsia and then examined its impact on the post-socialist production of space in abstract terms in the form of the Kulturkampf Narrative. This phenomenon was specific to Hungary in many ways: the so-called populist-urbanist divide is a product of Hungary’ particular history of ideas, and so are the half-tolerated half-suppressed debates between populists and urbanists in the early 1970s. But some kind of ideological division between traditionalists and progressives was inherited from the pre-communist past everywhere in the region, and it had some impact on the post-communist developments everywhere. However, Hungary was also special in that a clash between a populist-and-conservative right and a liberal left came to dominate the ideological scene from the very beginning of the regime change,493 while elsewhere the dominant division was that between communists and anti-communists. Consider the case of Poland. Here, the Catholic right and the liberal left began by forming a united front in the Solidarity movement in 1980–1981; cracks in the union made their appearance by the late Summer of 1981, only to be undone again by the coup in December of the same year.494 Thus, Solidarity as an umbrella organization for all the ideological shades of the anti-communist camp came to power in 1990 and its unity gradually broke apart afterwards.495 The belated reappearance of the traditional divisions in Poland also resulted in the public decisions on the built environment not having been affected by it in the time period under investigation.

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abstraction

abstract model systemic organization and establishment of causal nexus

application

empirical data and everyday experience seemingly disjointed and unsystematic micro-level symptoms and narratives

systemic explanation micro-level symptoms and narratives that admit to a systemic structure

Fig. 122. An abstract model of post-socialist urbanization: based on and applied to the case of Budapest.

As for the Decentralization Narrative, we can state that the party-state system’s monolithic power geometry was replaced in all formerly socialist states by excessive decentralization, both in terms of governance and concerning the ownership and management of resources. But in this case, too, the abstract frame can be filled with detailed micro-narratives that are, in their turn, responsible for different variations of the abstract meta-narrative. In Hungary, for example, the decentralization of local governance went extremely far with respect to Budapest. This resulted in fierce battles between the city and its districts, a phenomenon unique to Budapest within East Central Europe’s post-socialist capitals. The book provides a basis for future comparative studies by establishing a model abstract enough to be separable from a reference to particular loci and actors. Its hypotheses can thus be tested against other specific cases in the region and elsewhere, followed by an evaluation of the variations observed amongst the different cases under investigation. This conceptual apparatus is the third important result of my study.

Chapter 7  Conclusions and Lookout. An Abstract Model of Post-Socialist U ­ rbanization Based on and Applied to the Case of Budapest

Budapest‘s post-socialist urbanization the case under investigation

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483  The first existed between 1918 and 1919, and the second between 1946 and 1949 – both terminated and followed by proletarian dictatorships.  484  In this process, the state has recently received old-new monopolies, acquired new holdings, and the central government has substantially been strengthened against local municipalities; the latter losing competences, tax income, and has seen cut-backs to their real estate and institutional portfolios. Furthermore, the former regime of checks and balances has also been systematically destructed.  485 The football stadiums of most Budapest-based clubs have been refurbished or replaced by new ones; a new complex for the 2017 FINA World Championships, to be held in Budapest, was rapidly erected; and construction of a new National Stadium replacing the former People’s Stadium is ongoing.  486  Low investment was due to a combination of the European financial crisis and the waywardness of legislation in Hungary. According to the Központi Statisztikai Hivatal (KSH), the construction industry accounted for 1.5 –1.8 % of investment within the national economy between 2011 and 2015, while the same figure was 2 .9 %, almost double, in 2005. ‘Jelentés az építőipar 2015. évi teljesítményéről’ [Account of the Construction Industry’s Performance in 2015] (Budapest: Központi Statisztikai Hivatal, 2016), 3.  487  An expressive example is the planned conversion of ‘Városliget’, one of Budapest’s biggest parklands, into a museum compound. The parliament enacted a law on the renewal and development of this green public open space in 2013 that firstly gave the areas jointly owned by the state, the district, and city municipalities into the trusteeship of the state for a period of 99 years and, secondly, introduced regulations for its development, superior to both the Settlement Structure Plan and the respective District Regulation Plan. Law CCXLII/2013 (December 23).  488  An aim explicitly declared by Viktor Orbán in his speach at the 2014 Bálványos Summer School in Tusnádfürdő, Roma-

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nia. ‘Tusványos után – Az Eötvös Károly Intézet elemzése’ [After Tusványos – ­Analysis of the Eötvös Károly Institute], magyarnarancs.hu, July 28 , 2014 , accessed May 5, 2017, http://magyarnarancs.hu/belpol/tusvanyos-utan-az-eotovos-karoly-inezet-elemzese-91093 /?orderdir=novekvo  489 This architectural debate on the possibility of humanizing socialist mass housing was introduced and elaborated in Chapter 4 , 97–102 .  490  The decentralization of local governance was discussed in Chapter 3 , 58 –65 .  491 The Corvin-Quarter’s story unfolded in Chapter 6 .  492 The protection of the district’s social and economic networks, as well as the built types that housed these, was the focus of the renewal strategy developed in the late 1980 s and authored by urban designer Anna Perczel. That renewal was never realized, as no funds were raised for it. See more in Chapter 6, 139 –42 , 147–51.  493 The two poles at the Opposition Round­table, launched on March  22, 1989, were dominated by the Hungarian Democratic Forum (later winners of the first free parliamentary elections in 1990) on the nationalist-conservative side and the Alliance of Free Democrats on the progressive, liberal side.  494 Following strikes and the strengthening of the Solidarność movement in 1980 –1981, Prime Minister and Party General Secretary Wojciech Jaruzelski announced a state of war on December 13, 1981, sending troops onto the streets, introducing a curfew, suspending telecommunications and most of the press, closing borders and airports, and arresting all important leaders of Solidarność. The state of war was lifted in July, 1983. The entry ‘Solidarity’ in Encyclopædia Britannica, accessed May  2, 2017, https://www. britannica.com/topic/Solidarity  495  For example, both Jarosław Kaczyński, president of the Law and Justice Party (PiS) and Poland’s current de facto ruler, and Adam Michnik, editor-in-chief of the left-liberal newspaper Gazeta ­Wyborcza, and an unbending opponent of Kaczyński’s rule, were members of Solidarność in 1989.

About the Author Dr. Daniel Kiss (b. 1978, Budapest) is lecturer at the Institute for Urban Design,

About the Author

ETH Zurich. His field of expertise comprises theories of urban form, strategic design, as well as post-socialist urbanization. His work has been supported by multiple grants from the Swiss National Science Foundation (SNF). Besides his research activities, he teaches urban design studios and the reading seminar ‘Theories of Urban Form’, lectures on strategic design, and moderates the NSL Institute’s doctoral colloquia. He holds a PhD from ETH Zurich and an M.Arch. from Harvard University. Daniel previously worked as project architect with Herzog & de Meuron and is founding partner of the Basel-based architecture and urban design practice XM Architekten.

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Illustration Credits Building the Corvin-Quarter Photo by Zsolt Reviczky, 2009. Chapters Fig. 1.  Disjointed and unsystematic micro-phenomena or a pattern that has to do with systematic background factors? Illustration by the author, 2015. Fig. 2.  Model in the form of three explanatory blocks (narratives), each of which establishes links between particular background conditions and the syndrome of Budapest’s recent urbanization. Illustration by the author, 2015. Fig. 3.  The Socialist Urban Legacy, Decentralization, and Kulturkampf Narratives. Illustration by the author, 2015. Fig. 4.  The book’s modus operandi: mutual feedback between micro-level symptoms, the macro-level abstract model, and the detailed case study. Illustration by the author, 2017. Fig. 5.  Dunakeszi, 'On the Margins of a Metropolis'. Photo by István Lugossy, 1975. Fig. 6.  Dunakeszi, 'On the Margins of a Metropolis'. Photo by István Lugossy, 1975. Fig. 7.  The hodge-podge of industrially used land in socialist Budapest. Illustration by the author, 2013. Fig. 8.  Former industrial sites along the Danube. Photo by Tibor Tildy, 1993 Fig. 9. Factory of the Hungarian Optical Works (MOM) with the Buda Castle in the background. Photographer unknown, from the MOM Memorial Foundation’s archives, 1976. Fig. 10.  Changes to the structure of the Hungarian economy between 1980 and 2003. Illustration by the author, 2013, based on data from the Hungarian Central Statistical Office. Fig. 11.  Slum formations in North American, Western, and Eastern European cities. Redrawn by the author, 2012. Original by Iván Szelényi, 1983. Fig. 13.  The József Attila mass-housing estate in Budapest in the 1960s. Photo by István Herbály, 1967. From the Fortepan archives. Fig. 14.  Slum formation, industrial land, and private investor projects in Budapest’s second urban belt. Illustration by the author, 2013. Base map: segments L-34-14 and L-34-15, Hungarian State Topography Map 1:25000, 1987.

Fig. 15.  The West End shopping mall's characteristic porch roof. Photo by Sándor Csudai, MTI News Agency, 2016. Fig. 16.  The West End shopping mall’s main entrance. Photo by Ágnes Melles, 2018. Fig. 17.  Aerial view of the Millennial Park. Photo by CÉH Zrt., 2002. Fig. 18.  One of the office blocks not part of the initial scheme. Photo by the author, 2017. Fig. 19.  The park’s central pond. Photo by Új Irány Csoport Kft., 2002. Fig. 21.  The Skála department store’s opening in 1976. Photo by Tamás Urbán, 1976. From the Fortepan ­archives. Fig. 22.  The Allee shopping mall. Photo by Ágnes Melles, 2018. Fig. 23.  Office row adjacent to the National Theater. Photo by Ágnes Melles, 2018. Fig. 24.  The Palace of Arts. Photo by Ágnes Melles, 2018. Fig. 25.  The Corvin-Quarter’s main promenade. Photo by Ágnes Melles, 2018. Fig. 26. The Millennial City Center (left) and a new IT campus (right) along the Danube in southern ­Budapest. Photo by Ágnes Melles, 2018. Fig. 27.  Formal scheme of the Socialist Urban Legacy Narrative. Illustration by the author, 2016. Fig. 28. The uneconomical privatization gift: untended housing from different eras in Budapest's 8th ­district. Photo by the author, 2010. Fig. 29.  Costs and acquisitions concerning apartment privatization. Zsuzsa Dániel, ‘A bérlakás-privatizáció paradoxona. Nemzeti ajándék vagy ráfizetés?’ Közgazdasági Szemle 63 (March 1996), 204–230 (211). Fig. 30.  Dwelling expenses in the tenement sector before and after apartment privatization. Zsuzsa Dániel, ‘A bérlakás-privatizáció paradoxona. Nemzeti ajándék vagy ráfizetés?’ Közgazdasági Szemle 63 (March 1996), 204–230 (213). Fig. 31. Settlement expansion in Budapest between 1990 and 2010 and the social composition of the agglomeration's newcomers between 1990 and 1997. Illustration by the author, 2013. Base map: segments L-34-14 and L-34-15, Hungarian State Topography Map 1:25000, 1987; segments L-34-14 and L-34-15, Hungarian State Topography Map 1:50000, 2010. Social survey by Szonda Ipsos Kft., Budapest, 1998.

Illustration Credits

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Fig. 32. Deterioration in the city’s second belt enhanced by the outflow of the middle-class. A building awaiting its long due renewal in the 9th district in 2010. Photo by the author, 2010. Fig. 33.  Timeline of relevant legislative and urban planning regulations between 1990 and 2010. Illustration by the author, 2015. Fig. 34.  Land-use and settlement structure plan of ­Budapest’s 1988 General Urban Plan. Budapesti Városépítési és Tervező Intézet (BUVÁTI), 1986. Fig. 35.  Skyscrapers by Helmut Jahn and Daniel Liebeskind adjacent to the Stalinist Palace of Culture and Science in Warsaw. Photo by Jakub Certowicz, 2013. Fig. 36.  Unrealized office building at Szervita square, ­Budapest. Zaha Hadid Architects, 2006. Fig. 37.  Unrealized project in central Budapest. Foster and Partners, 2010. Fig. 38.  The 1998 Settlement Structure Plan of Budapest. Budapest Főváros Városépítési Tervező (BFVT) Kft., 1998. Fig. 39.  Glossary of Budapest’s Urban Planning between 1990 and 2010, including abbreviations as used in this book. Compiled by the author, 2017. Fig. 40.  Budapest’s main development areas, defined by its Integrated Urban Development Strategy in 2008. Redrawn by the author, 2017. Based on Budapest’s Integrated Urban Development Strategy, 2008. Fig. 41.  Károly boulevard, renewed in 2011 as part of the ‘Heart of Budapest’ program. Photo by Ágnes Melles, 2018. Fig. 42.  The 2005 Settlement Structure Plan of Budapest. Budapest Főváros Városépítési Tervező (BFVT) Kft., 2005. Fig. 43.  Formal scheme of the Decentralization Narrative. Illustration by the author, 2016. Fig. 44.  Budapest’s first precast panel apartment blocks under construction in 1965. Photo by Imre Perényi. First appeared in: Imre Perényi, A korszerű város. Gondolatok a várostervezés múltjáról és jövőjéről (Budapest: Műszaki Könyvkiadó, 1967), 173. Fig. 45.  The tulip-ornamented blocks in Paks after their completion in 1975. Photo by Jeffrey Cook. First appeared in: Jeffrey Cook, Seeking Structure from Nature. The Organic Architecture of Hungary (Basel: Birkhäuser, 1995), 25. Fig. 46.  ‘Only From Pure Sources’, exhibition plates six and nine. Pécs Group, 1973. First appeared in: Jeffrey Cook, Seeking Structure from Nature. The Organic Architecture of Hungary (Basel: Birkhäuser, 1995), 24.

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Fig. 47.  Between secession and modernism: the decorated façade of the Leitersdorfer House in Budapest. Mór Erdélyi, 1912. From the Budapest City Archives. Fig. 48.  Its zooid shape and scaled skin characterize ­Makovecz’s ski hut in Dobogókő, built in 1980. Photo by János Gerle. First appeared in: Jeffrey Cook, Seeking Structure from Nature. The Organic Architecture of Hungary (Basel: Birkhäuser, 1995), 34. Fig. 49.  A metaphor of the political turnover: István Janáky’s 1990 design of the Butterfly House. István Janáky, 1990. Fig. 50.  Seven towers representing Magyar history: the Hungarian pavilion at the Seville world fair in 1992. Photgrapher unknown. Source: http://www.hettoronyfesztival.hu/sevilla/ Fig. 51.  István Medgyaszay, designs of a National Pantheon, 1906. István Medgyaszay, 1906. Fig. 52.  Gyula Berczik’s winning proposal at the 1871 competition for the National Pantheon. Gyula Berczik, 1871. Fig. 53.  Imre Makovecz’s design for a National Pantheon from 2008. Imre Makovecz, 2008. Fig. 54.  The National Theater’s demolition in 1965. Photo by Zsolt Pálinkás, 1965. From the Fortepan archives. Fig. 55.  Hungarian Theater of Pest, later National Theater, built in 1837 by architect Mátyás Zitterbach and demolished in 1913. Artist unknown, 1840. Fig. 56.  Emil Tőry’s and Móric Pogány’s designs for the National Theater, competition entry from 1913. Emil Tőry, Móric Pogány, 1913. Fig. 57.  Hungarian Theater of Pest, later National Theater, along Rákóczi street in 1893. Photo by György Klösz, 1893. From the Fortepan ­archives. Fig. 58.  Miklós Hofer’s competition entry for the new ­National Theater from 1966. Miklós Hofer, 1965. Fig. 59.  Ferenc Bán’s winning design from 1997. Ferenc Bán, 1997. First appeared in: Levente Szabó Ed., Bán Ferenc Építészete (Budapest: TERC Kiadó, 2015), 156. Fig. 60.  The abandoned construction site in 1998. Lugosi Lugo László, 1998. Fig. 61.  The ‘Gödör’ [Pothole] club and park on the Erzsébet square opened its gates in 2002. Photo by Sándor H. Szabó, MTI News Agency, 2014. Fig. 62.  György Vadász’ proposal for altering Mária Siklós’ designs for the National Theater. Winning project at the competition held in 2000. Vadász Építész Stúdió, 2000.

Fig. 63.  The National Theater in Budapest, opened in 2002. Photo by Ágnes Melles, 2018.

Fig. 81.  Protest demanding new social housing in Budapest’s 8th district in 1989. Photo by Anna Perczel, 1989.

Fig. 64.  Ferenc Bán’s own house in Tokaj, built in 2000. Photo by Tamás Bujnovszky, 2014.

Fig. 82.  Block-scale renewal in the 9th district executed in 1994. Photo by Ágnes Melles, 2018.

Fig. 66.  Péter Kis’ first-placed scheme from 2004. Plant Atelier Peter Kis Kft., 2004. Fig. 67.  Péter Kis’ revised design from 2008. Plant Atelier Peter Kis Kft., 2008. Fig. 68.  Kis’ and Gábor Zoboki’s joint concept from 2008. Plant Atelier Peter Kis Kft., Zoboki-Demeter és Társai Építésziroda Kft., 2008. Fig. 69.  Kengo Kuma and Péter Janesch’s winning project for the new government center from 2007. Kengo Kuma, Péter Janesch et al., 2007. Fig. 70.  Károly Polónyi’s proposal for Budapest’s urban structure. First appeared in: Pál Granasztói, Károly Polónyi, Budapest holnap (Budapest: Gondolat Kiadó, 1959), 7. Fig. 71.  The city organized around the Danube: Polónyi’s visualization of the riverbank. First appeared in: Pál Granasztói, Károly Polónyi, Budapest holnap (Budapest: Gondolat Kiadó, 1959), 15. Fig. 72.  Concept for the EXPO area by Károly Polónyi and his team, submitted at the 1991 design competition. Károly Polónyi, 1991. Fig. 73. Polónyi's 'EXPO on barges' design. Károly Polónyi, 1991. Fig. 74.  Master plan of the proposed EXPO area in southern Pest. Városépítési Tudományos és Tervező Intézet (VÁTI), 1993. Fig. 75.  Formal scheme of the Kulturkampf Narrative. Illustration by the author, 2016. Fig. 76. The abstract model's formal scheme. Illustration by the author, 2016. Fig. 77. Map of Budapest's 8th district and within it, the Corvin-Quarter. Illustration by the author, 2017. Fig. 78.  Streetscapes in Budapest’s 8th district around 1989. Nagytemplom street. Photo by Lugosi Lugo László, 1989. Fig. 79.  Streetscapes in Budapest’s 8th district around 1989. Leonardo da Vinci street. Photo by Anna Perczel, 1988. Fig. 80.  Condition of buildings in Budapest’s ‘Urban Renewal Area’ in 1994. First appeared in: Elisabeth Lichtenberger et al., Stadtverfall und Stadterneuerung in Budapest (­Vienna: Verlag der Österreichischen Akademie der Wissenschaften, 1994), map appendix in sleeve.

Fig. 83.  Renewal subsidies of apartment blocks obtained between 1997 and 2004, superimposed on the focal and action areas of the 1997 Renewal Order. Redrawn by the author, 2018. Budapest Városrehabilitációs Programjának felülvizsgálata és javaslat a program továbbfejlesztésére (Budapest: ECORYS Hungary Consulting, 2006), 6. Fig. 84.  Detailed Development Plan of Middle-­ Józsefváros. Anna Perczel, Városépítési Tudományos és Tervező Intézet (VÁTI), 1987. Fig. 85.  Revised development proposal of the green promenade. Anna Perczel, Városépítési Tudományos és Tervező Intézet (VÁTI), 1992. Fig. 86.  The Quarters of Budapest’s 8th district. Highlighted are the Corvin and Magdolna Quarters. Illustration by the author, 2018. Fig. 87.  Anna Perczel’s detailed condition assessment of Middle-Józsefváros. Anna Perczel, Városépítési Tudományos és Tervező Intézet (VÁTI), 1992. Fig. 88.  One of György Alföldi’s early sketches of a possible green promenade. György Alföldi, 1999. Fig. 89.  György Alföldi’s sketch of tabula rasa around the central promenade. György Alföldi, 2001. Fig. 90.  District Regulatory Plan for the Corvin-Szigony Area. Józsefváros Renewal and Urban Development Plc., 2002. Fig. 91.  Distribution of answers to the question: ‘How much do you like living here?’ Illustration by the author, 2014. Data source: ‘Corvin-Szigony Projekt, Rehabilitációs felmérés’ (Budapest: MONITOR Társadalomkutató Intézet és Módszertani Központ, 2000), 16. Fig. 92.  Distribution of answers to the question: ‘Would you reconsider moving if…?’ Illustration by the author, 2014. Data source: ‘Corvin-Szigony Projekt, Rehabilitációs felmérés’ (Budapest: MONITOR Társadalomkutató Intézet és Módszertani Központ, 2000), 16. Fig. 93.  The Corvin Promenade in 2010. Photo by the author, 2010. Fig. 94.  The Corvin Promenade surveilled by security staff. Photo by the author, 2010.

Illustration Credits

Fig. 65.  Ferenc Cságoly’s winning competition entry from 2003. Építész Stúdió Kft., 2003.

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Fig. 95.  Screenshot from the movie ‘Corvin Variációk’ (00:12:32). Klára Trencsényi, 2011.

Fig. 109.  Their preferences if they were to move. Illustration by the author, 2015. Data source: Monitor Társadalomkutató Intézet, 2000.

Fig. 96.  Screenshot from the movie ‘Corvin Variációk’ (00:19:34). Klára Trencsényi, 2011.

Fig. 110.  New social housing block in Práter street 30– 32., designed by Plant Atelier. Photo by Ágnes Melles, 2018.

Fig. 97.  Urban Renewal Plan of Józsefváros János Brenner, Budapesti Városépítési és Tervező ­Intézet (BUVÁTI), 1965.

Fig. 111.  New social housing block in Futó street 20. Photographer unknown. From Rév8 Plc.’s archives, 2010.

Fig. 98.  The clean-slate renewal commenced in 2004. Photo by Dániel Németh, 2004.

Fig. 112.  Resident displacement from the Corvin-Quarter. Illustration by the author, 2013. Data source: Rév8 Plc., 2003.

Fig. 99.  The Corvin-Quarter’s first built phase – in contrast with one of the old neighborhood’s remnants. Photo by Anna Perczel, 2011. Fig. 100.  Condition of buildings in Middle-Józsefváros in 2005. Redrawn by the author, 2018. Based on: Tamás Egedy et al., ‘Fővárosi rehabilitációs programok és eredmények’, in Városrehabilitáció és társadalom: tanulmánykötet, ed. Tamás Egedy (Budapest: MTA FKI, 2005), 175–188 (177).

Fig. 113.  The 22-hectare project perimeter of the ­Corvin-Quarter in 2004. Illustration by the author, 2016. Satellite image: Google Earth, 2004. Fig. 114.  Public and private programs of the Corvin-Quarter development, announced in 2002. Redrawn by the author, 2018. Based on: Public and private programs of the Corvin-Quarter development, Rév8 Plc., 2002.

Fig. 101.  Standards of apartments in the Corvin-Quarter area in 2000. Illustration by the author, 2015. Data source: Monitor Társadalomkutató Intézet, 2000.

Fig. 115.  Amended Regulation Plan of the Corvin-Quarter from 2005. Redrawn by the author, 2018. Based on: District Regulation Plan of the 8th District, Rév8 Plc., 2002.

Fig. 102.  Average apartment prices in Budapest’s central districts (1000 HUF/sq.m). Illustration by the author, 2015. Data source: Hungarian Statistical Office (KSH), 2007.

Fig. 116.  Heightened chimneys in blocks adjacent to the new development. Photo by the author, 2010.

Fig. 103.  Nagytemplom street, house 17. Photographer unknown. From Rév8 Plc.’s archives, 2004. Fig. 104.  Szigony street, house 29. Photographer unknown. From Rév8 Plc.’s archives, 2004. Fig. 105.  Futó street 33, around 2000, neo-baroque interior in a classicist building, recommended for listing. Photo by Anna Perczel, 2000.

Fig. 117.  Vajdahunyad street, blocked by the new shopping mall. Photo by the author, 2010. Fig. 118.  Visualization of the imagined promenade. Erick van Egeraat Associated Architects, 2005. Fig. 119.  Visualization of the imagined promenade. M-Teampannon Kft., 2005. Fig. 120.  Tension between old and new: construction of the Corvin Quarter’s second phase. Photo by Ágnes Melles, 2018.

Fig. 106.  Leonardo da Vinci street 33, around 2000, recommended for listing. Photo by Anna Perczel, 2000.

Fig. 121.  Corporate architecture along the Corvin Promenade. Photo by Barnabás Honéczy, MTI News Agency, 2014.

Fig. 107.  Leonardo da Vinci street 32, around 2000, recommended for listing. Photo by Anna Perczel, 2000.

Fig. 122.  An abstract model of post-socialist urbanization: based on and applied to the case of Budapest. Illustration by the author, 2016.

Fig. 108.  Likelihood of the Corvin-Quarter’s former residents moving. Illustration by the author, 2015. Data source: Monitor Társadalomkutató Intézet, 2000.

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Reflections on the Nexus Between a Case Study, an Abstract Model built on it, and General Theories

Reflections on the Nexus Between a Case Study, an Abstract Model built on it, and General Theories

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A conversation between Kees Christiaanse [Prof.em. of Urban Design], Ákos Moravánszky [Prof.em. of the Theory and History of Architecture], and the author of this book, held in Zurich on April 11, 2018. Daniel Kiss: I would like to begin by expressing my gratitude to both of you for taking your time to discuss with me some methodological issues raised in my book. It is an honor and privilege for me to have this conversation with you, as well as a great opportunity to test my ideas against the judgment of two outstanding experts in the fields of architecture and urbanism. I would suggest that we start by addressing the book’s terminology and main methods. At the core of the book there is an in-depth case study of politics, administration, planning, and urban development in post-socialist Budapest. Embedded in this larger case study, I present a comprehensive account of a particular urban development project in a neighborhood called the Corvin-Quarter. There is a general story of post-socialist urban transformation in Eastern Europe, there is the more specific story of Budapest, and there is the micro-narrative of the Corvin-Quarter development. The book moves back and forth among these levels. What do you think about this basic structure? Ákos Moravánszky: In your book, you offer a case study within a case study, which I find interesting. For the matter of clarification concerning these different levels, maybe you could describe the horizon of your work. Is the Corvin-Quarter’s narrative the prime source of your ‘everyday phenomena’ that you use to construct your model; is it Budapest’s recent history in general, or eventually an even broader panorama of international examples? Daniel Kiss: My empirical research focused on the recent history of Hungary and of Budapest’s urban development in particular. As far as the Corvin-Quarter is concerned; though it is the most important of the micro-narratives I am reconstructing, it is not the only one. The book discusses many others, although not in such a great detail. These range from cases from the socialist past, such as the 1975 ‘Tulip-Dispute’, to more recent events related to the consequences of public policies implemented after the regime change. This is, thus, my book’s horizon. It takes the everyday facts of a unique story as its starting point. I only make reference to the international background with the aim of putting my story in context or to support theoretical generalizations. ÁM: I find the way you explain your apparatus convincing. However, some fundamental questions emerge at this point. What you describe as the ‘abstract model’ is constructed literally out of the three buildings blocks; that is, the three narratives. While you are claiming that your work ‘takes the everyday facts of a unique story as its starting point’, one could argue that your ‘unique story’ is not actually a starting point but rather an empirical case that serves to demonstrate the usefulness of the categories that you stated a priori. This makes one wonder if you should not have been more critical regarding the possibility of a ‘single abstract model’.

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DK: I take your point. In doing empirical research, one moves back and forth between the interpretation of particular facts and the formulation of general categories. At the same time, I find it helpful to present the outcome as starting out from the empirical story and moving towards the abstract models; especially because the story – that of Budapest’s post-socialist urbanization – is a unique one. Of course, it is a complex story comprising scores of micro-narratives. The hypotheses are based on the facts of these micro-narratives; at the same time, they give structure to the seemingly disordered facts and provide them with a systematic explanation – or so I hope. While my work does suggest a combined synthetic picture, the abstract model I tried to elaborate is an open model and not a holistic explanation of the phenomena under investigation. I am, thus, hoping that it leaves room for creative interpretations leading to its modification; for example via inserting additional building blocks. Another way it could prove useful would be to provoke other researchers to develop alternative models. ÁM: If that is the case, what are the elements of the model that you think are absolutely necessary, and where is there room for flexibility?

cialist urbanization. Nor would I dare to define the theoretical minimum conditions for such a model. I could imagine that other researchers, starting out from different experiences, would construct a very different scheme. It doesn’t mean that the choice of models is arbitrary. I made a reasoned argument, on the basis of my ‘unique story’ for a model consisting of three ‘containers’: the first describing the historical background conditions, the second tracking characteristics of the transition, and the third identifying the syndrome of the contemporary city, respectively. ÁM: Another question I would add is related to the model’s relationship with the micro-narratives: Is the Corvin-Quarter’s story to be seen as an application of the model or it is rather the model that is developed from lessons of that story? DK: I would like to see my reasoning as moving in both directions. The particular stories are both starting points towards, and exemplifications of, the abstract model. While the main purpose of the reconstruction of the Corvin-Quarter story is to show how the abstract relationships of the model materialize in an actual development project, its findings also feed back into the model itself, modifying its elements. Kees, this movement back and forth between the abstract and empirical levels seems to be analogous to the combination of normative and analytic approaches characteristic of your work – would you agree? Kees Christiaanse: Yes, one could say that the narratives of the model are constructed on the one hand ‘bottom-up’; that is, grounded in and abstracted from the research of the concrete case study of Budapest and, on the other hand, ‘top-down’ by the preconception of their structure. This allows for a reciprocal validation of the two levels during the work, which I consider a legitimate method of organizing findings. It is methodologically comparable to verification processes within traffic simulation projects. In such a case, one also collects facts on the one hand

Reflections on the Nexus Between a Case Study, an Abstract Model built on it, and General Theories

DK: Frankly, I am uncertain on this. I don’t think I have ‘the ultimate model’ of post-so-

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and constructs a simulation model on the other, followed by the model’s validation via the data. This is a process of mutual verification: both the input data verify the model and the model the relevance of the data. Maybe you could elaborate on this reciprocal relationship between your model and the data it is based on and at the same time verifies. DK: May I try to illuminate my approach by reference to an author and his work that had a great impact on my methodological thinking? In The Reflective Practitioner, Donald Schön describes design as a process that consists of many cyclical actions. 496 Each such cycle should be understood as an operation which simultaneously applies and tests an idea, thereby establishing a difference to the pre-existing status. In other words, previously unknown questions and topics arise that lead to new concepts, which in turn are elaborated, applied and tested. In my research, I tried to follow a similar progression that I would like to see as not being linear but cyclical; each step containing feedback loops between the abstract and the empirical levels. Thereby, the slowly crystallizing abstract model organizes empirical data, rendering some more relevant than others, while the micro-narratives fine-tune the model’s structure. KC: Can you maybe illustrate this in the example of the Corvin-Quarter narrative? DK: The in-depth study of this story helped me to recognize how the municipal renewal policies led to unintended consequences – for example in cementing inequalities in housing – and how this proved to be decisive for Budapest’s post-socialist urbanization. These insights became, then, important constituents within the abstract model and resurfaced in the Socialist Urban Legacy and Decentralization Narratives. In contrast, a more abstract analysis of institutional decentralization revealed independent consequences of another kind, manifesting for example in the form of conflicts of interest topped by an unclear division of authority between the metropolitan and district level municipalities. This was later confirmed by the Corvin-Quarter’s narrative. KC: I think the above discussion clears up the relationship between the abstractmacro and empirical-micro levels in the book. I would like to take this opportunity to steer the conversation towards another fundamental question concerning the abstract model. You claim that your apparatus can be applied towards testing other post-socialist cases. My question is, how general or specific is the case study of Budapest in order to allow the creation of an abstract model that can be tested against other conditions in post-socialist cities? How can you be certain that the model is fit for this task, if you yourself have not tested it against any other case? DK: There is a wide body of research on the dilemmas of the case-study methodology. Many praise in-depth case studies for their capacity to provide nuanced, empirically rich and holistic accounts of specific phenomena. 497 Such an approach may be particularly appropriate in cases where the phenomena under investigation get simply lost when they are reduced to simple, quantifiable relationships. I believe that the post-socialist transformation is such a story. It is hardly possible to do justice to its richness and many variations without in-depth case studies. 202

In his Rationality and Power, Bent Flyvbjerg uses the story of a planned bus terminal in the Danish small town of Aalborg to make general claims concerning patterns of rationalities within democracy in practice. 498 His work pointed out that the ‘most particular’ may reveal itself to be the ‘most general’; that is, an exemplification of frequently repeated patterns. I also take the Budapest case to be a distinct story which, when closely examined, reveals itself to be replete with paradigms of general significance. The question, then, is how successful the abstract model is as a methodological starting point for future comparative studies. My intuition is that the model’s three building blocks are necessary constituents of any successful analysis of post-socialist transformation. They are, in one way or another, relevant everywhere in Eastern Europe. What do you think? KC: I agree that the three narratives are rooted in the DNA of post-socialist urbanization. I can, nevertheless, imagine that future comparative studies based on this model will highlight differences between the various cases analyzed rather than similarities. I have witnessed this in the case of the comparative research on eight Asian metropolises conducted recently by the sociologist Christian Schmid’s team in the Future Cities Laboratory in Singapore.

the variations within post-socialist urbanization that I hope my abstract apparatus will help to identify and to make comparable with each other. KC: Interestingly, relating it to my own experience, it seems that the model may also be applicable beyond post-socialist Eastern Europe. Take the example of the Netherlands, a country that is not post-socialist and which, at first glance, one would not believe to show comparable phenomena to those described in this book regarding Budapest. The Netherlands, which I have called in the past ‘really socialist’ or ‘more socialist than the Eastern Block’, has a strong tradition of centralized planning, cultivates a culture of state-produced social housing, and has developed strong municipal control of urban design and architecture. Until the 1980s, control over the quality of planning had been the domain of socio-democratic parties that cared more about the collective environment than the liberals and confessional parties. As city governments were traditionally ‘red’, there was a strong engagement towards – and control of – the production of housing; and concerning the quality of its architecture and urban design. In this condition, the fall of the Berlin Wall had a tremendous effect because it confirmed the general upcoming conviction in the Netherlands that socialism is a utopia and no alternative to a market-based system. As a consequence, center-right parties became dominant, and control and financing of social housing, architecture, urban design, and public spending on culture were deliberately cut. The result was a strong decentralization of planning authority, leading to a strong outsourcing of development by municipalities to private actors, an increase in sprawl, and a lack of design control. Simultaneously, decreasing public spending on social and cultural buildings led developers to take the initiative, for instance in the form of ‘donating’ a theater to the city in exchange for land and allocated built volume. Another analogy to the Hungarian

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DK: This outcome would be very much in accordance with my aspirations. It is exactly

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case is the fact that a mean clash of ideologies was generated by the U-turn towards the marketization of housing and urban development. While the ‘red’ leadership in cities and the housing corporations had always guarded and fostered modern architecture, the market instantly turned towards populist architecture, rendering quite a few modernist architects jobless and transforming the image of the Netherlands from an exemplary coherent modernist society into a kind of badly sprawled populist architectural Disneyland. This unintended correlation makes the model for me quite interesting, especially as similar phenomena can also be observed in France, England, and the United States. DK: Your comment is immensely encouraging, thank you very, very much. To be honest, it never occurred to me that my model could be extended to comparisons between post-socialist and ‘post-social democratic’ transitions. Such extensions would require, I think, a very careful attention to the variations which are probably more significantly different across the two types than they are within the post-socialist type. For example, the capitalist welfare state that you are speaking about was established on the basis of a market economy. In the socialist regimes, on the other hand, such a market infrastructure was by and large non-existent. In a capitalist system, people engage in horizontal transactions, and the welfare state intervenes when they fail. Under socialism, one hierarchical system encompasses all social and economic relations, and the welfare institutions are just a subsystem among the many subsystems of the hierarchy. Furthermore, the political framework for the capitalist welfare state is multi-party democracy with periodic and competitive elections, while the socialist regimes were based on one-party rule. KC: Yes of course, this is true. On the other hand, phenomena like the turn in the 1980s and 90s from concepts of mass housing towards the romantic ideal of the suburban single-family house as the only desirable form of dwelling are general trends determining the production of space both in the East and the West. DK: Absolutely! This is a reason why suburbanization as a form of housing decentralization did not become a separate building block of my abstract model, although it has been a prominent process in Hungary, too. It is extensively discussed in the Decentralization Narrative, but I interpreted it as a general tendency of all post-industrial societies. According to a neo-Weberian conception, it was only the relative underdevelopment that delayed the taking off of this process in the East. Ákos, you led a three-year-long international research project, East West Central, which undertook the investigation of differences and similarities between the postwar discourses on the production of space on the two sides of the iron curtain. Based on your experience, how do you see the possibility of extending the model’s use to comparisons between urbanization in the East and the West? ÁM: Indeed, my intention behind starting those conferences and publishing the three East West Central volumes was to question the metaphor of the iron curtain, because it freezes the reality of post-war Europe into the opposition of two monolithic ‘blocks’; one bad, one good. Since one part is always valorized, this reductive 204

model predetermines the outcome of any historical analysis. The ‘post-socialist’ narrative, if it is based on the ‘iron curtain’ metaphor, tends to reinstate the Cold War dichotomies, and thus fails to recognize parallel developments. Therefore, as the title East West Central suggests, I proposed a triadic model to replace this dichotomy with a more complex system of interferences and interactions. Our discussion today suggests that the transformation of the coexisting alternatives of state socialism with planned economy, the welfare state, étatism and the ‘third way’ of the non-aligned countries after the collapse of the Soviet Union into post-socialist, post-welfare, and other ‘post’-forms show structural similarities. Therefore, I am convinced that the model you propose could be successfully tested to investigate the transformation of European urbanization in former state socialist as well as capitalist economies after 1989.

models that treat the cases in more synthetic ways; that is, based as much on their structural similarities as on their differences. This would, however, most probably demand a further generalization of my model, given that some of its elements are of a distinctly post-socialist character. To start with, the model’s first building block establishes a nexus between the legacies of the socialist mode of production and the phenomena of recent urbanization. It argues that the means of production of space under state socialism are closely linked to distinctly socialist circumstances, such as the lack of land value and private property or the hoarding of space resulting in its constant shortage. Furthermore, such an extension would also raise the question of the pool of micro-narratives or detailed case studies the model should be based on. KC: In my view, the pools of micro-narratives would be less radically different than you seem to be suggesting. I would argue that the Corvin-Quarter development, which I find in many ways surprisingly successful, could have provided a very comparable story with the private investor taking the upper hand, had it taken place in Western Europe, too. As this micro-narrative was one of the prime sources for your model’s conceptualization, the latter could be legitimately tested against Western cities as well. DK: I also have the feeling that distortions from public-private partnership are global phenomena. But, again, variations matter. I would argue that the Corvin-Quarter study reveals a peculiar model of distortion, and this model is distinctly post-socialist. This development project’s outcomes are the combined effect of insufficient resources, of fuzzy division of authority, and of political standoffs on the public side as well as of the dysfunctionality of urban planning inherited from the socialist past. ÁM: Despite the variations, I still believe the model would be applicable for such a comparative study that would then isolate the distinctly socialist and post-socialist factors within Budapest’s – or other Eastern European cities’ – recent urban development. This would be an important contribution to the discourse in the field.

Reflections on the Nexus Between a Case Study, an Abstract Model built on it, and General Theories

DK: I find it very thought-provoking the way you address the limitations of comparative work which reinstates historical dichotomies – in this case through the survival of the ‘iron curtain’ metaphor. It would, indeed, be interesting to propose alternative

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DK: This would definitely be a very interesting experiment. My wish is for the model presented in this book to indeed be tested against a rich array of variations in the future. Comparative studies would most probably also result in the further development of the model itself and contribute to a better understanding of the limitations of its applicability. Ákos, Kees, I would like to thank you very much for this engaging discussion.

496  Donald Schön, The Reflective Practitioner: How Professionals Think In Action (New York: Basic Books, 1984), 79 –93.  497  See for example: Bent Flyvbjerg, ‘Case Study’, in Norman K. Denzin and Yvonna S. Lincoln, eds., The Sage Handbook of Qualitative Research, 4th Edition (Thousand Oaks, CA: Sage, 2011), Chapter 17, 301–16; Sarah Crowe et al. ‘The case study approach’. BMC Medical Research

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Methodology, 11, 100, 2011; Clive G. Long and Clive R. Hollin, in: Clinical Psychology and Psychotherapy. Volume 2, Issue 3, October 1995, 177–91, and Helena Harrison et al., Case Study Research: Foundations and Methodological Orientations, in: Forum: Qualitative Social Research, Volume 18 , No.  1, Art.  19 – January  2017.  498  See note  455 above.

Dr. Daniel Kiss Lecturer, Institute for Urban Design, ETH Zurich

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