The State Audit Office of Hungary (SAO) audited the utilisation of the housing stock owned by three districts of the capital and three cities with county rights between 2018 and the first half of 2023. The findings include that although the number of low-comfort housing units has decreased in all six local governments, the low level of spending on development and renovation poses a risk to preserving the value and condition of the housing stock owned by the local governments.
The overall conclusion of the audit was that all the local governments audited had a fundamental objective to improve the quality of their housing stock. However, the SAO also found that, although the six local governments audited had set general objectives for the utilisation of their housing stock, apart from a few exceptions, they did not set measurable target numbers, values and indicators. Several of the local governments audited set out as a general development direction the maintenance, or in some cases the expansion, of the housing stock and the increase in income from the use of the housing stock. At the same time, the housing management decisions taken by the six local governments together led to an 8.2% (1 717 units) reduction in the number of municipally owned housing units over 5 years.
Although the number of low-comfort housing units (semi-comfort, without comfort, or emergency housing) has decreased in all six local governments, at the end of the first half of 2023, 12.7% of the total housing stock of the six local governments (2 440 units) was still housing units with no plumbing, no hot water or classified as an emergency housing unit with an extremely small floor area.
An important finding was that the local governments audited, with one exception, spent only a small proportion of their housing revenue on improvement and renovation, averaging between 3.2% and 17.7%. The low level of spending on this purpose posed a risk to preserving the value and condition of the housing stock owned by the local governments.
At the end of the first half of 2023, 13.6% (2 617 units) of the overall housing stock of the six local governments was vacant and unused. In the six local governments, the condition and level of comfort of the vacant units did not allow for their intended use, which points to the increased need for renovation and improvement and the risk of reusability.
Based on the experience of the audit, the SAO made recommendations to develop a set of measurable housing management and utilisation targets, to update records that support planning, to assess the potential for development of the housing stock in use, and for the utilisation of vacant housing as well as to identify opportunities to reduce rent arrears.
It is important to highlight that the SAO has not set out any specific figures for setting rent prices, so the statement in the latest issue of the monthly magazine of district XVIII of Budapest that ‘it is the government, through the State Audit Office of Hungary, that obliges local governments to reconsider prices’ is not correct. The SAO, as the financial and economic audit body of the National Assembly, in its audit, which was still ongoing at the time of publication of this article, found that the average monthly rent in district XVIII of Budapest was above the national average. Therefore, the SAO cannot be used as a basis for reference for the increase in rents, the findings and the recommendations draw attention to the need for a planned and appropriate use of the housing stock.
The reports are available here (in Hungarian).