Kováts Bence: The Financialisation of Housing and Housing-related Family Support in Hungary
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4. Housing-related family support in Hungary
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4.1. Family support in Hungarian housing studies
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4.1.2. The financialisation approach

4.1.2. The financialisation approach

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The financialisation view explains Hungarian housing developments as primarily shaped by the current wave of re-commodification transforming housing into an investment vehicle that is less and less affordable (Gagyi and Vigvári, 2018; Pósfai, 2018; Gagyi et al., 2019; Pósfai and Jelinek, 2019). Authors apply the same periodisation of housing developments as authors following the transition approach, however, they identify different drivers of housing policy and market change in certain periods: while the transition approach explains periodic changes by the often improvised strategies of subsequent national governments to manage tensions generated by the economic transition, the financialisation approach argues periods overlap with global housing market cycles and changes in housing policy are driven by global processes (Pósfai, 2018; Gagyi et al., 2019).

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Similarly to the transition approach, authors also consider the 1970s the crucial turning point when the current housing regime started to take shape. However, for them, the decision to hold back the provision of public housing and subsidise private housing construction instead is not the outcome of a specific national reaction to the crisis of the dysfunctional political-economic model of state socialism. They see Hungary remaining part of the capitalist world economy during the period of state socialism and interpret changes in the 1970s to be the result of the global crisis of capitalism affecting Hungary as a semi-peripheral country of the capitalist world economy1. In this vein, they consider the fall of public housing construction as a neoliberal policy of welfare retrenchment, while they view the easing of access to preferential fixed-rate mortgages provided by the state-owned savings bank and the expansion of subsidies to private house-building as policies fostering financialisation (for the definition of financialisation see Chapter 2.2.1) (Gagyi et al., 2019).

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The authors describe the post-state socialist era not in terms of a protracted transition characterised by haphazard policy-making, but as marked by not only the facilitation of mortgage lending by the state, but a gradual shift in housing-related redistribution. The authors argue that most policy measures targeting disadvantaged households with the aim of mitigating the detrimental social consequences of commodification, were abolished, retrenched or hijacked to support the middle class (Gagyi et al., 2019; Pósfai and Jelinek, 2019).

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The financialisation approach argues that as housing has been becoming more and more unaffordable and assistance of vulnerable households by the state has been decreasing, reliance of households on their own resources, or those of their relatives and friends utilised through reciprocal exchange, has risen in significance (Gagyi et al., 2019, pp. 216–217). The family gets more involved in young adults’ housing access through intergenerational co-residence or labour support in self-build, and the conversion of buildings in allotment gardens not built for habitable use into quasi-housing units (ibid., p. 217).

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An important difference between the financialisation perspective and the transition approach is that the former does not explain widespread familialism by the retreat of the state-based housing system and the delayed emergence of a market-based one (that is, a gap left by the low level of both commodification and de-commodification), but by large-scale housing commodification and the restructuring of redistribution by the state to enhance rather than mitigate inequalities caused by the market.

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Authors consider mortgage boom and bust cycles as local materialisations of global housing investment cycles. They acknowledge housing outcomes can be more severe during busts, however, they also highlight increasing reliance on household resources during housing booms. Households rely on their own resources and those of their social network during housing busts to escape homelessness due to defaulting on mortgage payments, but also during mortgage booms to escape housing markets heated by housing price appreciation (Gagyi and Vigvári, 2018; Gagyi et al., 2019).
 
1 The impact of global processes on housing policy development in the 1980s was not completely rejected by representatives of the transition approach either. For example, Hegedüs and Tosics (1996, p. 30) also briefly mention that the 1970s crisis in the West spread to state-socialist countries. However, they attribute incomparably larger importance to national policy-making in producing housing outcomes.
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