In mid-September 2024, an unusual event unfolded in Budapest's VI district, also known as Terézváros, a vibrant area that has long been popular among tourists. Locals were given the opportunity to vote on a proposal to ban Airbnb-type accommodations. The vote posed a critical question for the district’s residents: Should they restrict short-term rentals in their neighbourhood?
In this article, we explore how the vote unfolded, what the implications of such a decision could be, and how it might affect tourism in the Hungarian capital. We also had an insightful discussion with Balázs Schumicky, president of the Association of Hungarian Apartment Rentals, who shared his opinion on the current situation and what he sees as possible solutions to the challenges posed by short-term rentals.
Terézváros vs. Airbnbs
The referendum took place between September 2 and 15, where residents over the age of 16, holding either permanent or temporary addresses, were eligible to vote either online or in person. The key question was:
The result? A total of 6,083 votes were cast, with 54% of voters in favour of restricting short-term apartment rentals to zero days starting in 2026. However, with a low turnout of just 20.52%, many are questioning whether the outcome truly reflects the views of the wider community.
Balázs Schumicky’s take
Balázs Schumicky, president of the Association of Hungarian Apartment Rentals (MAKE), voiced his strong opposition to the proposed ban. He believes the question posed in the vote was misleading, pushing for an all-or-nothing outcome rather than exploring potential compromises.
“We find it unacceptable to limit the number of rental days for Airbnb-type accommodations. Even a restriction like limiting Airbnbs to run for example 180 days per year penalises well-run, profitable, and fairly taxed properties, while allowing lower-quality, poorly managed accommodations to remain in operation," he said.
Balázs argues that limiting the number of rental days, for example to 180 days per year, would not hurt poorly maintained properties, as they rarely operate at high capacity anyway. However, premium-quality accommodations, which are in high demand and can be rented out at higher prices, would suffer significantly from such limitations.
Why a total ban wouldn’t work
According to Balázs, the issue goes beyond just protecting residents from noisy, disruptive guests. A ban on Airbnb-style accommodations would not a viable solution for several reasons:
- Imposing a limit on the number of days Airbnbs can operate isn’t a viable solution. Short-term rentals can’t simply be rented to tourists e.g. for half the year and then switched to long-term leases for families for the remainder. Such an arrangement would not work for either party.
- The argument that short-term rentals contribute to the housing crisis is not backed by data. Schumicky points out that in Budapest, only around 13,000 apartments are listed as private or Airbnb-type accommodations, which accounts for a mere 2% of the city's total housing stock. Even in the city centre, where these rentals are concentrated, they make up just 7-8%. If all of these properties were suddenly made available for long-term rental, it would cause only a short-term disturbance in the market.
Furthermore, many of these properties, owned by foreign investors, are either too small, lack natural light, or are in the premium category, making them unsuitable for long-term rentals for most families. Therefore, the argument that banning Airbnbs will solve Budapest’s housing crisis doesn’t hold up.
Potential consequences of an Airbnb ban
If the draft decree to ban short-term rentals in District VI is approved, it will take effect on January 1, 2026. This would have far-reaching implications for tourism and the local economy. In early October, 26 organisations, including Airbnb competitors, united to issue a joint statement rejecting the proposed ban. They called the plan “legally nonsensical and economically irrational,” and urged local authorities to seek a compromise solution instead.
Balázs Schumicky agrees, noting that such a drastic measure would likely have a negative impact on Budapest’s tourism industry. Many tourists prefer short-term rentals over hotels, especially families, groups, and those travelling with pets. Studies have shown that when Airbnb-type accommodations are no longer available, most travellers don’t switch to hotels but instead choose a destination where they can still rent an apartment.
If this were to happen, it would lead to a decline in tourist numbers and a significant loss of income for not only accommodation providers but also other local businesses such as restaurants, cafes, and cultural attractions that rely on tourists.
Finding a middle ground with alternative solutions
Many believe that changes in the regulation of short-term rentals are inevitable. Balázs Schumicky and other industry experts are advocating for balanced, reasonable solutions rather than outright bans.
Some possible future scenarios include:
- Changes to taxation: The taxation system for short-term rentals could undergo revisions.
- Moratorium: Professional organisations have requested that the government impose a moratorium on registering new short-term rentals in Budapest starting January 1, 2025.
- International consultation: Tourism organisations are advocating for an international consultancy to provide recommendations on how Budapest can best manage its short-term rental sector, drawing on successful models from other cities.
It’s about the balance
Another potential solution would be to require apartment building consent before a property can be rented as an Airbnb, as is already the case in Budapest’s District VII. Another option could be to set a limit on the percentage of units in a building that can be used for short-term rentals, as has been proposed in District V.
Soundproofing and noise monitoring in buildings where Airbnb-type accommodations operate could also help ensure peaceful cohabitation between residents and short-term guests, without resorting to extreme measures like a full ban.
What lies ahead for Airbnb in Budapest
Although the vote in Terézváros has set the wheels in motion for new regulations, it’s clear that the battle over short-term rentals is far from over. With the tourism industry pushing back and alternative solutions being discussed, the future of Airbnb in Budapest is still uncertain.
At the Budapest Economic Forum 2024 on October 17, Márton Nagy announced that no new permits will be issued for Airbnbs in Budapest for the next two years. In addition, a significant tax increase and stricter regulations for Airbnb operations are also planned. While specific details of the regulations are not yet available, the intention is clear: the number of Airbnb properties in Budapest cannot continue to grow.