National Urban Policy of Hungary

Historical Background

The most important disparity in the Hungarian urban system is caused by the overwhelming dominance of Budapest and its historical background. The capital of Hungary became dominant when the urban counterweights to Budapest were no longer part of the country after 1918. This has resulted in a very monocentric structure of the urban system.

Urban development in the command economy was linked to central economic planning, therefore towns along the heavy industrial axis of the country - running from the Northeast to the Southwest, including Budapest - started to develop strongly from the 1950s onwards. This development forced planners to limit the development of Budapest and to start developing towns outside the heavy industrial axis, based on light industrial activities in the 1960s.

The explicit settlement development policy of the centrally planned economy, established in the 1970s, was aimed at creating a polycentric and balanced system of towns. However, the implementation frequently resulted in the development of towns at higher hierarchical levels.

From the 1990s onwards, cities experienced drastic changes, mainly relating to socio-economic development. This era also marked a transformation of the administrative system (in more than 3,000 individual municipalities). The decline of central planning resulted in growth patterns of towns that were mostly defined by the towns’ individual characteristics, their geographical location and their own local policy. The development of towns was characterised more by regional disparities and less by hierarchy. The law on spatial development and the first national planning document, the ‘National Spatial Development Concept`, therefore approached these spatial problems from a territorial perspective, regardless of the settlements and the structures of these towns. This solution was adequate at the end of the 1990s while solutions for great regional disparities and economic restructuring still had to be found. Urban policy was predominantly dedicated to local actors.

Today, the urban system is greatly influenced by EU integration. The accession of Hungary, Slovakia and Slovenia to the European Union in 2004 has influenced the role of towns in today’s Hungarian urban system. The accession of Romania in 2007 and the pre-accession process of candidate member states - Croatia and Serbia - also influence the urban system. Both the development opportunities of towns and the interrelations within the urban system in a cross-border context are affected.

Basics of the Urban System

In Hungary, there is no firm legal base for urban policy. The main actors of urban policy are the towns themselves, as guaranteed by the law on self-government. Each of the 3,200 municipalities in Hungary has its own local government. Of these 3,200 municipalities, 300 are towns but nevertheless have the same rights as villages. However, a special law has been introduced for the capital and twenty-three other towns with so-called county rights (towns with county seats and towns with more than 50,000 inhabitants). This law governs not only issues of local democracy and finances, but also of competences, duties, the organisation of self-governance and the right to form associations. Despite their serious financial difficulties, local governments are autonomous entities, and – regardless of their size – therefore retain the same de jure rights. Financial possibilities are ensured by their tax revenues and state directives for fulfilling certain tasks. Most developments are also supported by the European Union’s Structural Funds.

Though the responsibilities of towns are equal by law, regional differences have to be noted as the functional role of towns within their wider context affects their development opportunities to a great extent. The vastly growing Budapest metropolitan area dominates the urban system. Outside Budapest, the Hungarian urban system, a pattern of medium and small cities is polycentric and well distributed over the whole territory. In the North-Eastern and South-Western parts, as well as the Western edges of the country, medium-sized and small towns arise from a pattern of small rural settlements, mostly micro-villages. These medium-sized and small towns play a crucial role in the service provision of their hinterlands. On the Great Plain in the Eastern part of the country, the major centres and the rural market towns are surrounded by “giant villages” with large land areas and dispersed farms. These regional characteristics define the position of towns in their central functions. County seats have an important traditional role in the organisation of their respective counties.

Legal Framework of Urban Policy

The integrated dimension of urban policy is defined by the law on spatial development and physical planning (Act XXI of 1996). This law aims at achieving a balanced spatial development, through facilitation of the regional socio-economic and cultural evolution towards harmonisation of regional development, national development and territorial planning. The Act defines the role of regional and national institutions in the directing of spatial development, but not the role of individual towns.

The National Spatial Development Concept (NSDC) (Parliamentary Decree 97/2005) is the first legal document to set goals regarding the function of certain towns within the settlement network. It addresses the issue of polycentricity in relation to Budapest and a further seven towns, which have been appointed as regional poles. Out of the seven medium-term territorial objectives defined in the concept, the one that is linked specifically to urban issues is the development of a highly competitive Budapest metropolitan area, with the objective of benefiting from its international economic and cultural role. Budapest is intended to be a competitive capital city, a dominant hub of Central Europe, and the economic centre of the Carpathian Basin. This can create a closer tie between the national economy and European and global relations. The aim to develop Budapest into a gateway city connecting the Balkans to the mainstream European processes is very important. However, this should not be achieved at the cost of increasing monocentricity within the national urban system. The NSDC of 2005 defined among its medium-term territorial objectives the aim to strengthen the development of poles to provide dynamism to regions and establish a balanced network of cities. These regional development poles (Debrecen, Miskolc, Győr, Pécs, Szeged, Székesfehérvár and Veszprém) are aimed at serving as substantial regional centres and enhancing the development of their hinterland regions. Intra-urban challenges are addressed to a limited extent with regard to Budapest and the regional poles, which have to be respected by all sectoral actions of the government.

There are certain other regulations that partially affect urban development. The most important of these concerns the built environment. The law on shaping and protecting the built environment (Act LXXVIII of 1997) deals with the fundamental requirements, instruments, rights and commitments related to the built environment. Furthermore, it concerns the scope of duties and competences. According to this Act, all urban settlements are obliged to develop an integrated urban development strategy which has to follow a strict thematic structure formulated by the government. A settlement plan has to contain the overview of the situation of the whole city and define all the potential areas for development – not only regeneration, but greenfield developments as well.

Current Issues

Urban policy currently concentrates on the following major issues. The elaboration of the national settlement network development concept has started, which will amend national spatial policy to include the dimension of the urban network and urban-rural relations. The concept demonstrates the functional relations between towns and their hinterlands. It also describes the roles and development opportunities of the main nodes in the settlement system, an aspect that falls under new framework conditions. The content of this concept will be integrated into the new national spatial policy of 2010.

Urban dimension and urban development play a key role in the implementation of the New Hungary Development Plan (National Strategic Reference Framework), co-financed by EU Structural Funds. In the period between 2007 and 2013, urban areas have the opportunity to utilise support within regional operational programmes. This can contribute to the implementation of their integrated urban development strategies, including function-enhancement, urban rehabilitation or social urban regeneration. Physical renewal of private housing in certain cases and partnership(s) with social actors can also be incorporated. Towns applying for Structural Funds for their urban renewal actions have to follow guidelines from an Integrated Urban Development Strategy, which sets objective criteria on eligibility for integrated urban renewal. An integrated approach contributes to the demonstration of a territorially-based planning approach, the combination of various policy approaches and the matching of the aims of inhabitants, local governments, business and NGO actors.

The government has initiated its policy-making at national level in order to create a sustainable urban development strategy with broad partnerships and co-operation. The new policy will be in line with the guidelines and best practices of the European Union, as well as with agreements between Member States, particularly the Bristol Accord and the Leipzig Charter.

Conclusion

In Hungary, several institutions at different territorial levels have both opportunities and responsibilities to foster sustainable urban development. The key players are the municipalities themselves whose autonomy is guaranteed by law. However, they are to a large extent dependent on national decisions. Both in regulatory terms and in development policy, they are confined by their use of Structural Funds. Nonetheless, municipalities face constraints in finding adequate co-financing for their projects.

Although spatial policy has responded adequately to territorial challenges, it is necessary to strengthen horizontal and vertical coordination in order to implement the integrated approach of urban development and to assist towns in their development activities. There are initiatives in place in Hungary to foster integrated and sustainable urban development at local level.