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This article belongs to the special cluster, "Politics and Current Demographic Challenges in Central and Eastern Europe," guest-edited by Tsveta Petrova and Tomasz Inglot. We explore housing finance and policy in East Central Europe to understand the connection between housing, in particular independent household formation, and the demographic crisis. The combination of high debt-free homeownership rates with illiquid housing finance and limited rental markets produces conditions where housing restricts independent household formation and likely has a restrictive effect on fertility. We first assess the housing regime type in East Central Europe and demonstrate that it closely corresponds to the "difficult housing regime" in Southern Europe, which has well-established negative effects on independent household formation and fertility. Then we present a detailed case study of Hungary, which is a country with very low fertility rates and substantial changes in housing finance and policy over time. In particular, the issue was recently politicized through housing policies centered on household formation to counter the demographic crisis. We present a detailed analysis of policies related to access to housing for young adults through increased access to markets or state housing support schemes. These policies attempted to reduce dependence on families, but after the crisis, we find that these policies reinforce, rather than challenge, dependence on families for housing solutions, thereby limiting independent household formation. While these policies may serve a rhetorical role demonstrating a state response to the demographic crisis, we claim that their impact on fertility can be at most minimal because of stringent restrictions in access that concentrates on upper-middle-income households and limited financial commitment. [ABSTRACT FROM AUTHOR]

The global financial crisis has ushered in a major housing crisis in many European countries. The paper seeks to shed light on why, despite massive housing crises, there are few policy efforts at tackling it. Probing into the policy paradigms that have informed housing policies, the paper demonstrates a shift towards housing as an asset before the crisis. Increasingly, housing policies have become interwoven with financial markets. This has led to a major policy mismatch after the crisis: while the return of the 'housing question' would have required renewed efforts at establishing housing as a social right, de facto policy makers sought to stabilise financial markets. The result is a paradoxical outcome, where neoliberal market-driven programmes are embedded in increased dependence on family wealth. The article demonstrates the shift from housing as asset to housing as patrimony in three different varieties of residential regimes, represented by Ireland, Denmark and Hungary. [ABSTRACT FROM AUTHOR]

This paper asks how public policies have shaped the build-up of crisis-prone housing finance markets and whether they have mitigated or reinforced the associated risks for citizens in East Central Europe. Analyzing the mortgage lending booms and busts in Hungary and Estonia, the paper finds that different policy priorities did not matter too much for the build-up of the mortgage boom and the associated risks households had to face. Rather, early decisions for encompassing house privatization and the non-existence of mortgage markets have led to a pent-up demand for housing finance, while the transnationalization and EU convergence of the financial sector have provided the supply for mortgage lending from the early 2000s on. Policy-makers in both countries, albeit to different degrees, have supported the mortgage boom and have by-and-large failed to correct for the risks of their population. In the wake of the global financial crisis, however, policies started to sharply diverge. While the Estonian government has relied on market mechanisms and private market actors to cope with the crisis, the Hungarian government engaged in far-reaching interventionist policies to unmake some of its devastating consequences for indebted house-owners. The paper explains its findings by the combination of different welfare state traditions and patterns of party competition. [ABSTRACT FROM PUBLISHER]