On Sustainable Property Development – The Case of Budapest

Abstract

Sustainable development is conceptualised along three dimensions: environmental-ecologic, social-cultural and economic-financial. In this study sustainability is defined in terms of three specific evaluation criteria: quality, affordability and diversity. Evidence from Budapest suggests that quality varies (new versus old in particular), affordability is low and diversity, while high overall, is very limited within new developments. While the situation for property developments are weak, fortunately, amid an otherwise bleak situation, prospects for a minority of innovative and adaptable developers who operate in market niches are encouraging as these foster a relatively sustainable development in terms of one or more of the three dimensions. Moreover, in the longer term particular opportunities for sustainable development are likely to open as the maintenance of the new stock is more affordable and of better quality than the old stock.

Innovation in real estate and evolutionary agendas

“…6 Here it is worth noting that the Australian Green Star sustainability rating tool is explicit about incorporating and innovation category too (Warren-Myers and Reed, 2010, p. 204) to tackle the issue of "the structure of a local housing system and its evolution over time" is probably to be considered seminal paper with some sort of implicit evolutionary argumentation. However, it can be argued that, since then, nothing remarkable has been developed along the lines of anything akin to 'evolutionary housing market analysis'(but see Kauko, 2007Kauko, , 2013. Even considering real estate economics as the whole, that is to say, including also the commercial and office market side, the situation is much the same insofar as any mention of terms such as 'key drivers of change' or 'flexibility and adaptability' can be seen as 'evolutionary' only in the most implicit sense (e.g.…”

“…However, the real estate sustainability literature to some extent overcomes such inconvenient divides; here sustainable development occurring in urban areas and regions is seen as a process connected to the property development and exchange markets, with the scale ranging from individual property to the neighbourhood, city, region and country. The novelty of this perspective is that, when the evaluation of a given site is related to a market indicator such as house price development, then part of that price change can be explained with, or at least associated to elements of sustainability and unsustainability occurring along economic, environmental, social and cultural dimensions (see Kauko, 2013). Here we also need to remember that when the evolutionary theorization begun in the early 80s the sustainable development discourse was unknown; for instance, Nelson and Winter (1982) discuss the strategies of economic agents, firmly in the context of profit-making.…”