The website for critical discussion about migration in Central and Eastern Europe.
1. 3. 07

The rural miracle? – The ‘1 Forint estate projects’ and local struggles with population decline and economic deterioration in the Hungarian countryside

The last decade experienced the implementation of a new local initiative by rural places in Hungary to combat population decline and economic deterioration. These ‘1 Forint estate projects’ are particularly interesting in two respects. They point to the ever-worsening situation of rural areas in the country, which seemed to remain unsolved in spite of numerous governmental and EU efforts since 1989. They raise the question of how successful local initiatives could be in the struggle with rural underdevelopment and what could further their success.

“Buy an estate for 1 Forint! For details turn to the municipality” – reads the web page of Tetétlen. Unbelievable as it might sound, you can become the owner of an estate now for the price of 1 Forint in Tetétlen, one of the small villages in the more remote eastern part of Hungary. Before you justly ask whether it is the sad result of the ever-deteriorating real estate market affecting the less advantageously-located, depopulating rural areas, where estate prices have reached their lowest – don’t – it is not the case! What is more, the advantageous deal has simple conditions. The new owner is required to build a house at the estate within 4 years. The stated preference of “young couples with children and with at least one employee in the family” hints at the motivation of the advertiser.

The first ‘1 Forint estate project’ was launched in 2001, as a purely local initiative, by the local government of Ecseny, a remote village of 300 inhabitants in the South-Western part of Hungary. Situated in a hilly region scattered with small villages, with no urban centres in the vicinity, underdeveloped infrastructure and little employment possibility, the village is struggling with the common problems faced in declining rural areas. Most of these villages have been affected for decades by the out-migration of youth to urban centres and struggle with the problems of an aging and continuously diminishing population, high ratio of unemployment, severe poverty and the lack of basic institutions such as a medical office, pharmacy, school or kindergarten. Such places hardly ever manage to attract investors or successfully apply for government and EU grants, hence having little hope to reverse the processes of economic decline.

Thus the local government of Ecseny resorted to a less common solution. It decided to sell out estates in its ownership, which were not profitably used, for an emblematic price. The terms of the deal: if the new owner fails to construct a house in the estate within four years, the land comes back under the ownership of the municipality. The goals of the local initiative were to stop the population decline of the village by attracting new-comers as well as to bring economic rejuvenation by making the place more attractive for investors with the unusually low real estate price. The initial idea was that the young new-comers and possible investors would trigger further investments and development in the village. Thus, eleven estates were put on sale, for which several thousand applicants competed. However, with regard to the unexpectedly high number of applicants, the municipality decided to elaborate on the conditions, binding the new owners to establish an enterprise within the following four years in the village. Even though the promised businesses seemed likely to succeed, in such well-sounding enterprises as a hairdresser saloon, thermal bath, farm pension, Indian Sai Center, or distillery, by 2006 only one house was built and one enterprise realised. Moreover, the village needs to go to court in order to enforce the conditions of the contract, as the failed estate-holders seem resistant to return the land to the municipality. The village still did not give up its plans, though; another round was made in 2005 for the remaining nine estates.

The failure of the project in Ecseny, however, did not discourage other villages from making similar announcements for municipality estates. In 2004-2005, several 1 Forint estate projects started in various regions of the country, but characteristically in the Northern and North-Eastern areas, which are struggling with similar problems of depopulation and economic decline. The villages, however, vary in terms of their size, vicinity of urban centres, infrastructural conditions, as well as in the conditions of the sale.  Some of them have only few hundred inhabitants while others have a population of 1000-3000. Whereas the former have been experiencing severe population decline for a long time, the latter decided to take actions before becoming seriously affected by depopulation. Yet all of the villages started the project with the clear aims of attracting young new-comers and keeping local youth in the village, while also making the locality more attractive to investors. However, in contrast to Ecseny, the new ‘adventurers’ are more advantageously located, having urban centres in their surroundings. Most of these villages were also less severely hit by rural underdevelopment: they have better infrastructure and most of them still have their own schools, kindergarten and other basic institutions. Concerning the terms of the deal, generally the new owners are expected to build a house within a certain number of years in the locality. In addition, villages prefer young couples with children and invite families where at least one member holds a job already, since they cannot provide employment opportunities for the new-comers in the village. Some villages also require that the new-comers stay in the village and will not sell their house for 10 years.

But - again justly – you could ask, “Why are these local initiatives interesting?” After all, they remain rather segregated, and their influence, if at all, stays rather small-scale. Beyond the fact that they are entirely bottom-up initiatives to grapple with the problems of rural underdevelopment and population decline, they turn attention to at least two prominent phenomena. One is undoubtedly rural underdevelopment and its present situation in Hungary. Small villages have been suffering out-migration and population decline for almost a century, obviously not a specifically Hungarian characteristic. The particularly prominent worsening of their situation is connected to the socialist era in the country, where the strongly centralised administrational system and the anti-village redistributive policies significantly downplayed the development of rural areas, in contrast to cities. Large-scale out-migration started from rural areas to urban centres, often leading to the disappearance of basic institutions from smaller villages and the loss of local intellectuals.

Rural underdevelopment began to attract central attention in public discourse and policy making during the 1980s in Hungary. After the political change in 1989, small settlements received legal and financial autonomy, and attempts at decentralisation are also increasingly visible in the development policy. Yet it is becoming more and more evident that the transition to a market economy did not provide much better promises to rural places either. Despite their newly gained autonomy, most of these localities seem unable to bring about changes in their situation. They usually lack the adequate financial resources and potential to make profitable investments or to effectively exploit the possibilities of EU and governmental grants, hence remaining largely dependent on the governmental redistributive mechanisms. In the case of small rural settlements, the yearly-determined, centrally-allocated budget is rather small and usually used just for the functioning of the local municipality and for the fulfillment of mandatory tasks of local governments: that is, ensuring basic social, educational and medical services for their inhabitants. Thus, little money remains that could be used for larger development projects such as the construction of a sewage system, renovation of schools or solving the problems of underdeveloped infrastructure.

While the capital, the Budapest-Vienna axis and a few urban zones such as Pécs continue to remain the main target of investments and larger development projects, (due to geographic characteristics and the backwardness of infrastructure in certain regions) rural underdevelopment is more and more becoming regionally concentrated. Backward rural localities came to constitute entire blocks that are segregated and lagging behind. Such backward micro-regions are specifically characteristic of hilly regions with tiny villages, usually in the vicinity of the north-eastern and the southern borders, which do not have urban centres in their proximity, lack employment possibilities and sufficient infrastructure. In such regions, the population is largely inactive and suffers from the lack of basic medical and social care. These places thus have even less chance to bring any change in their situation.

What these local initiatives promise, however, is exactly what developmental projects from above could not yet resolve, i. e. to stop the population decline and reverse tendencies of rural underdevelopment on a local-scale. Since the projects are still in process, it is too early to judge how influential they could become as local struggles. It is up to the coming years or decades to offer further analysis and closer examination. Nevertheless, one more aspect seems to deserve further comment. In most cases, apparently it is not the most remote villages who seem to advance most successfully with the project, but rather those who are just about to face a more-serious population decline and possible segregation. Their comparable advancement, in contrast to more remote and segregated places, could be partly explained by the larger social processes that these local initiatives could play upon, namely recent tendencies of suburbanisation. For it is mostly less affluent young couples with children who are more or less clearly stated as the target population of the offer. They are also the ones who are the most ready to take advantage of the favourable offer to buy an estate for 1 Forint. For them it appears to be a preferable choice, since otherwise they would not be able to afford more than a small flat in the old socialist-type building blocks. Suburbanisation has been affecting the rural areas in the agglomeration of larger cities in the last decade. However, these processes largely pushed up estate prices in the agglomeration areas, while making these areas more and more saturated. Thus, such options are not so easily available for particular social segments; otherwise it would be a preferable choice. This is where the ‘1 Forint estate projects’ seem to come into the picture, offering the possibility of settling outside of urban zones to the less advantaged layers, thereby broadening zones of suburbanisation.

What remains a crucial question is the future of the more remote rural areas. For them the ‘1 Forint estate projects’ seem to bring more questions than answers. Could they also bring opportunities for such places to struggle against population decline and economic deterioration, or will it remain a solution for areas which are not yet seriously affected by regional segregation? Are there other social processes similar to suburbanisation on which the more remote rural places could possibly build to launch successful local developmental initiatives? Could the population decline of rural areas be stopped and their economic deterioration reversed by local initiatives on the long run? Thus it seems that it is still undecided whether ‘1 Forint estate projects’ could accomplish the unexpected rural miracle.

“1 Forint estates in Tetétlen” (in Hungarian), RTL Klub, September 25 2004.
Available at http://www.online.rtlklub.hu/hirek/hazank/?id=0409161023.

“Estate for 1 Forint. The competition of small settlements for new inhabitants” (in Hungarian), Népszabadság Online, October 8 2004.
Available at http://www.nol.hu/cikk_print/335678.

“1 Forint estates” (in Hungarian), Békés Megyei Hírlap Online, November 16 2004.
Available at http://www.bmhirlap.hu/index.php?apps=hirek&a=5&f_id=95954.

“1 Forint estates in Tetétlen” (in Hungarian), MTV magazine Este, March 17 2005.
Available at http://www.mtv.hu/cikk.php?id=139467.

“Another round in Ecseny” (in Hungarian), Népszabadság Online, May 17 2005.
Available at http://www.nol.hu/cikk_print/362436.

“1 Forint estates at Ludas” (in Hungarian), Tőzsde Forum Online, July 12 2005.
Available at http://tozsdeforum.hu/index2.phtml?menu=17&submenu=onearticle&

“1 estates for 1 Forint” (in Hungarian), RTL Klub, September 29 2005.
Available at http://www.online.rtlklub.hu/hirek/hazank/?id=0509208682.

“1 Forint estates” (in Hungarian), Népszabadság Online, February 24 2005.
Available at http://nol.hu/cikk/353047/.

“1 Forint estates in Mezőszemere” (in Hungarian), RTL Klub, February 24, 2005.
Available at http://www.online.rtlklub.hu/hirek/hazank/?id=0502170095.

“Distributing the 1 Forint estates. 500 applicants for 70 estates” (in Hungarian), RTL Klub, April 4 2005.
Available at http://www.online.rtlklub.hu/hirek/hazank/?id=0504172707.

“1 Forint estates for half million Forint. The applicants failed to live with the possibility” (in Hungarian), RTL Klub, March 1 2006.
Available at http://www.online.rtlklub.hu/hirek/hazank/?id=0603218652.

“Problems with the 1 Forint estates” (in Hungarian), RTL Klub News, May 20 2006.
Available at http://www.online.rtlklub.hu/hirek/hazank/?id=0605223798.

“Only one house was built in the 1 Forint estates of Ecseny” (in Hungarian), May 20 2006.
Available at http://www.uno.hu/news/story/207520?year=2006&month=4.

“No house was built yet” (in Hungarian), Hajdu Online, August 4 2006.
Available at http://www.haon.hu/engine.aspx/page/haon-article-detail-page


Alexandra Szöke
The author did her MA on the topic of elderly migration - the new “welfare migrants” from the West to Eastern Europe. She is presently doing her PhD in sociology and anthropology at Central European University, focusing on local initiatives and neoliberal development in Hungary.
1. 3. 07
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