Budapest is set to open its first new social housing in a quarter-century, thanks to a €6.2 million project co-funded by the European Union. The conversion of a former school building at 39–43 Baross Street in the Újpest district will welcome its first tenants early next year, marking a shift in the Hungarian capital's approach to its deepening housing crisis.
Mayor Gergely Karácsony highlighted the urgency, noting that Budapest has seen the sharpest property price increases in the EU in recent years. "In terms of property prices, nowhere in the European Union has seen such sharp increases in recent years as Budapest," he said, attributing the surge to "the impact of all the misguided housing policy measures of recent decades."
From Classrooms to Living Spaces
The project, part of the AHA Budapest (Affordable Housing for All) initiative, repurposes a building originally designed for education. Balázs Humayer, professional lead of the project, explained that the school's wide corridors—built for children—allowed for an unexpected advantage. "For housing, we don't need such generous circulation space, so we have been able to push out the walls of the flats by 35–40% compared with the former classrooms, creating additional living space," Humayer said.
The AHA programme is supported by the European Urban Initiative (EUI), which provides co-funding to test innovative urban solutions. As part of the project, Budapest is assessing vacant and unused buildings across the city to determine their potential for conversion into housing, redevelopment, or sale, considering technical, financial, and social factors. "There may be cases where demolition or sale is a more rational decision than conversion, so under AHA Budapest we are developing a methodology to assess this," Humayer added.
The initiative's core is the Demo Hub, a pilot that showcases affordable housing while integrating energy efficiency and new urban development approaches. The project aims to create a sustainable and socially viable model that could be replicated elsewhere in the city and beyond.
Tibor Kiszelyi, project coordinator at the From Street to Home! Association, outlined the tenant selection process. "For some of the flats, the physical parameters naturally suggest who should live there – larger homes will go to big families, while accessible ones will be for people with mobility impairments," he said. "The city has a range of other target groups it wants to support, such as single-parent families and young people leaving state care. We are now trying to piece together this extremely complex set of criteria to work out how tenants should be selected."
Karácsony acknowledged that this single project will not solve Budapest's housing shortage, but he sees it as a demonstration of how public authorities and professional organisations can collaborate effectively. He emphasised that buildings no longer suited to their original purpose offer some of the best opportunities for creating new homes.
The project comes as European cities grapple with housing affordability, with initiatives like the Canary Islands' voluntary tourist tax exploring alternative funding for local sustainability. Meanwhile, broader EU efforts, such as the watchdog report on EU-backed chemical alliances, highlight the need for balanced policy-making. The AHA Budapest project, however, offers a concrete example of EU funds directly addressing a pressing urban challenge.
