During the communist period, the guarantee of cheap housing and job security constituted the cornerstone of the communist
welfare state in East European countries. But a decreasing social security and an increasing social polarization were the
outcome of the 1989/90 transition. This paper highlights some of the effects of the political and economic transformation
on urban societies in Eastern Europe, using Budapest as a case study. The emerging social inequalities are discussed in detail,
along with the growing concentration of poverty. These processes have also had direct impacts on the social differentiation
of urban neighbourhoods, creating new dimensions of urban segregation. In this respect, Budapest represents a unique case
among East European cities, containing a considerable number of people belonging to the Gypsy population. Presently, we can
observe very upward and down-ward processes in different inner-city neighbourhoods of Budapest. Some areas show clear signs
of ghettoization, while others are clearly moving in an upward direction in terms of income and social status.
Zoltán Kovács is a senior research fellow at the Geographical Research Institute of the Hungarian Academy of Sciences and reader in geography
at the University of Budapest. He is specialized in urban and political geography. His major field of interest includes the
social and political consequences of post-communist transition and the transformation of East European cities with special
attention to the transformation of the housing market.