Regulation of Short-Term Accommodation Services in Józsefváros – Let us know what you think!

For a long time, this market operated in Hungary with relatively little regulation; however, in recent years, the municipalities of surrounding districts have introduced their own local regulations one after another. In Józsefváros, short-term accommodation services currently affect 3.5% of the housing stock, and the phenomenon is already present in a significant proportion of apartment buildings in the inner quarters. For this reason, the Municipality intends to make use of the available regulatory tools.

In current municipal practice, there are examples both of complete bans and of various types of restrictions. Instead of a total ban, Józsefváros aims to create a balance between the positive effects related to tourism, employment, and local tax revenues, and the need to protect the peace and housing needs of people living in the district.

In the already overcrowded inner quarters, we would not allow any further increase in the number of short-term accommodation units. In other parts of the district, short-term accommodation would be permitted to varying degrees, taking into account the level of pressure on the area, its characteristics, and the current proportion of accommodation units. The aim of the proposed regulation is to reduce territorial inequalities by establishing limits that fit the specific characteristics of each quarter.

The aim of the proposed regulation is to ensure that short-term accommodation units are clearly identifiable and that, in the event of problems (for example noise disturbance or littering), it is possible to know whom to contact. To ensure a uniform aesthetic appearance and an orderly visual environment, the design and materials of these signs would be prescribed.

At district level, based on a maximum ratio of 4%, there would still be a “reserve” for growth of 0.48 percentage points. In other words, in addition to the current 1,707 accommodation units, a further 230 new accommodation units could be authorised in areas that are not yet saturated (see the quarter- and apartment building-level limits presented later).

In the case of apartment buildings, we also propose territorially differentiated restrictions. In the Palotanegyed (Palace Quarter) and Corvin negyed (Corvin Quarter), short-term accommodation would be permitted in a maximum of 20% of apartments within a given apartment building, while in the Csarnok negyed (Csarnok Quarter) and Népszínház negyed (Népszínház Quarter), the limit would be 15% per apartment building. In the remaining quarters, a maximum of 10% of apartments within a given apartment building could be used as short-term accommodation.

This regulation would apply together with the district-wide and quarter-level limits. Therefore, even if a proposed short-term accommodation unit would account for only 9% of all apartments in a particular apartment building – meaning it would remain below the apartment-building-level limit – no new licence could be granted if the proportion of short-term accommodation units in the quarter or in the district had already reached the relevant limit.

Even in this case, the regulation would not mean the withdrawal of licences that have already been issued.

Making the establishment of short-term accommodation depend on the approval of the apartment building community would give residents the opportunity to prevent an increase in the proportion of short-term accommodation units within the building if they perceive this as a risk. In practice, this would mean that, before registering a short-term accommodation unit, a supporting decision of the apartment building general assembly would need to be presented to the Municipality. The general assembly could decide within the limit applicable to the apartment building (the above-mentioned 10–20%), meaning that it could reject an application even below this threshold, but it could not approve exceeding the upper limit.

In addition to local regulation, the Municipality intends to support district stakeholders in understanding and enforcing the rules through inspections and training programmes. To this end, it will launch an information programme presenting the tools available to apartment building communities. Furthermore, it will prepare a public and widely communicated plan for official inspections to identify accommodation providers operating unlawfully or without transparency.