Airbnb Ban in Budapest’s District VI: Apartments Turned into Hotels

The District VI municipal council made the decision following a referendum, impacting the thriving private accommodation sector. Currently, 239 out of the 270 apartments in the Central Passage are used for short-term rentals, and its response illustrates how property owners are seeking ways to navigate the new regulations.

Schumicky Balázs, the head of the Hungarian Apartment Renters Association (MAKE), pointed out that more property owners are transforming their private accommodations into hostels or communal lodgings rather than hotels, as the latter requires substantial investment. However, this shift might bolster the black market for rentals while the legality of the ban is under review by the government office.

Converting apartments into hotels or hostels is one of the most direct responses to the ban but requires significant investment. Compliance involves providing breakfast, installing fire alarm systems, and maintaining a reception. In the case of Central Passage, much of this infrastructure already exists, as 7Seasons Apartments, which operates most of the building’s units, already has a reception in place. However, hostel conversions could exacerbate tensions among residents, as properties might house more people—e.g., an apartment previously hosting four guests may now accommodate 11 beds to meet hostel requirements.

Terézváros mayor Tamás Soproni believes only a handful of residential buildings in the district will be able to continue short-term rentals by exploiting this loophole. However, Schumicky argues that if residents previously approved Airbnb operations, they might also approve reclassification as hostels.

Schumicky advises short-term rental operators to refrain from investing in conversions for now, as he expects the government office to declare the ban unlawful. For small-scale property owners with one or two apartments, such investments might not be worthwhile.

The broader context of the ban ties into the housing crisis, which both the local council and the government have cited as a primary concern. Critics argue the measure is intended to protect the long-term rental market, while others fear it could further inflate property prices. The government has also announced that while existing Airbnbs will not be affected, no new permits will be issued in 2025 and 2026, further constraining the market and increasing uncertainty for property owners.

The ban in District VI is poised to create ripple effects beyond tourism, significantly impacting Budapest’s housing market. For Airbnb hosts, the path forward requires careful consideration as they navigate an increasingly uncertain regulatory landscape.