Discussion Papers 2007.
Regionality and/or Locality 143-155. p.
TRADITIONAL INDUSTRIAL AREAS OF LARGE
CITIES IN THE POST-SOCIALIST ERA
– THE CASE OF BUDAPEST AND WARSAW
ÉVA EDIT KISS
Introduction
In the development of post-socialist cities 1989 was a radical turning point as rele-
vant reforms have begun in all fields of life. Enormous changes have taken place in
economy,  especially  in  industry,  which  have  had  a  great  impact  on  the  extent  of
industrial  areas  and  their  (re)utilization.  The  main  purposes  of  this  study  are  to
demonstrate the spatial consequences of the changes taken place in the industry of
the Hungarian capital city, Budapest and – where it is possible – to compare them
with those experienced in the Polish capital, Warsaw. The main issue is what kind
of similarities and differences can be observed in the traditional industrial areas of
the  two  post-socialist  cities.  The  study  is  primarily  based  upon  the  results  of  the
surveys  carried  out  in  the  industrial  areas  of  Budapest  in  the  past  decade.  (This
research  was  supported  by  OTKA,  project  number:  T046014.)  However,  those
experiences and impressions gained on a short study-tour in Warsaw in 2006 have
been also used up.  As the Polish experiences are based upon only observation, this
is why parantheses are used in the title of the paper.
The transformation  of industrial  areas  of  post-socialist  cities  began  much  later
than in developed western cities, and accelerated after 1989, when radical political
turnabout opened the way for economic and social reforms. Since then, numerous
studies have been published on Eastern European economic restructuring, on how
the  socialist industry  and  industrial  areas  of  cities  have  been  transformed,  and on
the kind of challenges cities have had to face (Gritsai, 1997a; Kiss, 1993; Korcelli,
1995; Korec, 1997; Misztal, 1997). Compared with developed western cities, those
in the East face a much more difficult situation, because they had to cope simulta-
neously  with  the increasing  pressure  of  globalisation,  and  with  structural  changes
in  all  spheres  of  life.  The  other  relevant  difference  between  Eastern  and  Western
cities is that the former need to restructure industry as a whole and each individual
firm simultaneously. In the west only a small proportion of enterprises or of a par-
ticular sector need renewing at any given time (Hillman, 1992).  For these reasons,
the  transformation  in  this  part  of  Europe  has  claimed  much  higher  economic  and
social costs, and takes longer, particularly in certain parts of the region.

Kiss, Éva Edit :
Traditional Industrial Areas of Large Cities in the Post-Socialist Era - The Case of Budapest and Warsaw.
In: Regionality and/or Locality. Pécs: Centre for Regional Studies, 2007. 143-155. p. Discussion Papers, Special
TRADITIONAL INDUSTRIAL AREAS OF LARGE CITIES IN THE POST-SOCIALIST…
14
5
Development of industrial areas before 1989
The  formation  of  industrial  areas  of  Budapest  began  more  than  140  years  ago,
when the industrialisation started. The location of industry was influenced by sev-
eral  factors,  such  as  natural  endowments,  prices  of  land,  location  of  residential
areas,  transport  possibilities,  the  spatial  pattern  of  public  utilities  and  different
town-planning  measures  (Bernát–Viszkei,  1972).  Location  and  spatial  distribution
of each branch also began to develop at that time.
By the beginning of the twentieth century, Budapest had become a modern city
with large and significant industrial areas, which formed a crescent around the city
centre. Most of them are found on the left side of the city (as Budapest is divided
into two parts, Buda and Pest, by the river Danube). Later this location considera-
bly determined the urban structure, the land use and the urban landscape of the city.
Neither  between  World  Wars,  not  after  World  War  II.  did  any  significant
change  not  take  place  in  this  pattern  of  industrial  areas,  because  new  industrial
areas did not emerge between the World Wars, only existing ones developed fur-
ther,  and  because  most  companies  were  rebuilt  on  the  former  sites  after  1945
(Preisich, 1969).
The  industrialisation  and  the  development  of  industrial  areas  of  Warsaw  also
started at the end of the XIX. century. Before World War I. industry was concen-
trated in the city centre, mostly in the western bank of the River Vistula (as War-
saw is also divided into two parts by a river), where the structure of industry was
more multicoloured. At the same time on the eastern bank of the river, mostly ma-
chinery  industry  dominated.  In  1938  more  than  224,000  people  worked  for  the
industry  of  Warsaw  (Misztal,  1997).  Between  1938  and  1945  about  85%  of  the
industry  of  Warsaw  was  destroyed  except  for  the  industry  located  on  the  eastern
bank  of  the  river.  Thus,  after  1945  almost  the  whole  industry  had  to  be  redevel-
oped.
During the socialist era the industry of both cities developed very fast. Lots of
new firms were established, the number of employees increased and the industrial
areas continued to expand. The soviet influence on the industrialisation and struc-
ture of industry was particularly strong in case of Warsaw, which had to follow the
model  of  Russian  capital,  Moscow  (Misztal,  1997).  Its  branch  structure  was  pri-
marily  characterised  by  branches  producing  means  of  production.    In  the  Polish
capital mainly machinery industry, metallurgy, construction developed the fastest,
while in Budapest machinery, chemical, food and textile industries. In the former
one  the  number  of  industrial  employees  increased  from  44,000  in  1946  up  to
304,000 in 1975 and in the latter one from 348,886 to 544,971.
Due to the fast industrialisation the extent of industrial areas also increased. In
1960  they  accounted  for  3600ha    (6.8%)  of  Budapest’s  area,  and  in  1986  for
4538ha  (8.6%).  In  contrast,  in  Warsaw  the  industry  occupied  2300ha  (4,5%)  in

Kiss, Éva Edit :
Traditional Industrial Areas of Large Cities in the Post-Socialist Era - The Case of Budapest and Warsaw.
In: Regionality and/or Locality. Pécs: Centre for Regional Studies, 2007. 143-155. p. Discussion Papers, Special
TRADITIONAL INDUSTRIAL AREAS OF LARGE CITIES IN THE POST-SOCIALIST…
14
7
Figure 2
Main industrial zones of Warsaw in the second half of 1990s

Source: Misztal S. 1997.
Major trends in industrial areas after 1989
After  the  change  in  the  political  system  in  1989  radial  changes  (organisational,
structural  renewal)  began  in  the  industry  of  both  cities.  Besides  this,  some  other
factors (e.g. privatisation, foreign direct investment, lack of space, increasing envi-
ronment  protection,  impacts  of  globalisation,  acceleration  of  tertiarisation)  have
also contributed, to a different degree, to the changes in traditional industrial areas,
which have progressed differentially in time and space. In a certain sense they are
the natural consequences of the evolution of industrial firms and areas (Chapman–
Walker, 1988).

Kiss, Éva Edit :
Traditional Industrial Areas of Large Cities in the Post-Socialist Era - The Case of Budapest and Warsaw.
In: Regionality and/or Locality. Pécs: Centre for Regional Studies, 2007. 143-155. p. Discussion Papers, Special

148
ÉVA EDIT KISS
The pace and the measure of change are quite different in each quarters of Bu-
dapest  and  Warsaw  since  industrial  areas  and  industrial  firms  are  in  different
phases  of  transformation  or  development.  This  can  be  traced  back  to  numerous
factors  e.g.  size  and  location  of  industrial  areas  or  establishments,  the  branch
structure and the size of the firms which are in the same industrial district. In part,
these are also those elements that influence the fate of each firm and area in a cer-
tain region.  There will be such areas in the future too, which will remain almost
without change and there will be such areas too, where the industry will renew, but
such  ones  will  also  occur  where  the  industry  will  disappear  and  other  functions
replace them, even more new industrial regions can come into being.
In case of Budapest, during the almost last two decades, basically, two parallel,
but opposite processes can be observed in the industrial areas. One of them is the
vanishing  and  functional  transformation  of  industrial  areas  while  the  other  one
refers to their entire or partial renewal. The former is rather typical of the northern,
northeastern parts of the city, whereas the south, southeastern parts are character-
ised by the latter one. However, it is also doubtless that these trends can occur in
the  neighbouring  industrial  areas  or  within  one  industrial  area.  Changes  of  last
years show as if this ‘north-south division’ followed by a ‘radial’ functional trans-
formation  depends  on  the  distance  from  the  city  centre.  This  means,  in  fact,  that
functional  change  is  more  frequent  in  the  industrial  areas  which  are  closer  to  the
centre and have favourable location from other points of view, whereas the indus-
trial  renewal  is  much  more  typical  of  industrial  areas  with  more  ‘peripheral’  and
distant location. Deindustrialization, rehabilitation of industry and/or reindustriali-
zation takes place simultaneously, but these processes manifest themselves differ-
ently by industrial districts (Kiss, 2002) (Figure 3).
The functional transformation has begun the earliest in the northern and north-
eastern industrial areas of the city, and here it proceeds at a lively pace. Walking
along  the  main  road  of  the  northern  district,  where  both  sides  of  the  street  once
used to be flanked by different factories and workshops, today’s visitor is faced by
a completely different picture. Only a few old industrial plants are operating mostly
on the right side of the road. On the left side, closer to the Danube, the changes are
more  striking.  The  industrial  function  is  being  replaced  and  today  is  dominated
mostly by tertiary functions (e.g. commercial, repairing, service and storing func-
tions).  Deindustrialization is  most  advanced  here,  which  is  also  manifested  in the
highest number of closed-down firms between 1990 and 1995. A considerable vol-
ume  of  investment  in  the  non-producing  sector  in  this  region  also  confirmed  this
process (Kiss, 1993).
The rapid functional change in this part of Budapest and the relatively fast dein-
dustrialization  are  also  due  to  the  fact  that  the  inner  city  is  getting  crowded  in-
creasingly and is expanding mainly absorbing areas to be found not so far from the
city  centre  and  within  an  easy  reach  by  transport.  These  industrial  areas  are  very

Kiss, Éva Edit :
Traditional Industrial Areas of Large Cities in the Post-Socialist Era - The Case of Budapest and Warsaw.
In: Regionality and/or Locality. Pécs: Centre for Regional Studies, 2007. 143-155. p. Discussion Papers, Special
TRADITIONAL INDUSTRIAL AREAS OF LARGE CITIES IN THE POST-SOCIALIST…
14
9
suitable  to  expand  to,  so  the  City  penetrates  into  the  former  industrial  districts
along “feelers”, i.e. along the more important main roads while also transforming
its surroundings to a more or less extent. Due to this process and to the reinforce-
ment of City-functions, centre of Budapest is going to be similar to those of west-
ern  cities  (Kluczka,  1996).  It  was  a  general  experience  in  Warsaw  too,  that  func-
tional  change  and  the  decrease  of  industrial  areas  have  progressed  faster  in  those
industrial areas, which were located relatively close to the city centre.
The change in function and expansion of the central business district can also be
observed in the southern, southeastern parts of Budapest, primarily along the River
Danube. Here the transformation, however, is progressing much slower than in the
north.
Figure 3
Industrial areas of Budapest in 2006

Source: Own elaboration.

Kiss, Éva Edit :
Traditional Industrial Areas of Large Cities in the Post-Socialist Era - The Case of Budapest and Warsaw.
In: Regionality and/or Locality. Pécs: Centre for Regional Studies, 2007. 143-155. p. Discussion Papers, Special

150
ÉVA EDIT KISS
Basically,  the  main  trend  in  this  region  is  the  rehabilitation  of  industry  and  old
industrial areas. As a consequence the industry must be reckoned with in the long
run. This fact is confirmed by the lower rate of closures of industrial firms between
1990–1995,  and  on  the  other  industrial  investments  of  greater  size  than  in  other
parts of the city (Kiss, 1993). Statistical data for the years of the past two decades
show that about 60–65% of the sum invested have been spent on purchasing  ma-
chinery and equipment in the industry of Budapest, primarily imported from devel-
oped countries to raise the technical level, and in a wider sense, to reduce the lag.
During the past decade, owing basically, to the former processes the quality of
the  built  environment  in  the  traditional  industrial  areas  has  also  changed  for  the
better. Rapid and spectacular changes can be observed mostly in those firms where
the  owners  (investors)  were  partly  or  fully  foreign.  In  spite  of the  fact,  that some
new  industrial  buildings  and  halls  were  established  in  these  old  industrial  areas,
they,  in  fact  have  not  affected  the  spatial  structure  of  the  industry,  because  this
renewal  process  is  primarily  affected  the  existing  traditional  industrial  areas.  Be-
cause  of  the  high  prices  of  building  sites  and  lack  of  space,  not  the  capital is  the
primary target of ‘greenfield industrial investments’. Taken as a whole, in this re-
gion  there  have  been  changes  overwhelmingly  ‘within  factory  gates’,  within  the
area of industrial firms which cannot be seen well by the public, and which do not
have any relevant effect on the spatial structure of industry. This is why they can-
not contribute significantly to the transformation of the urban structure either.
Due to the changes mentioned above the extent of industrial areas in Budapest
has decreased very considerably during the past two decades, especially in the sec-
ond  half  of  the  1990s.  According  to  the  survey  carried  out  in  1998,  the  decrease
was  particularly  spectacular  between  1995  and  1998.    Since  then  the  decrease  of
old industrial areas have been continued. The latest survey carried out in 2006 has
also  proved  this.  Industrial  areas  of  Budapest  have  further  shrivelled,  and  nowa-
days  they  occupy  only  a few  per  cents  of  the  area  of  the  city.  Deindustrialisation
and  functional  transformation  are  closely  connected,  and  they  are  the  most  ad-
vanced in the northern part of the city.
In the Polish capital similar trends can be observed as in Budapest. The former
industrial areas have been shrivelled and split up. The most often commercial and
service  functions  appear  on  their  place.  Functional  change  has  also  taken  place
faster in the industrial areas located close to the city centre. In Warsaw, owing to
the  changes  taken  place  in  its  industry,  the  extent  of  its  industrial  areas  has  also
decreased  in  the  last  two  decades,  but  the  decrease  was  not  so  spectacular  as  in
Budapest. Within Warsaw the decrease of the extent of traditional industrial areas
was especially fast in the western part of the city. It seems that industry will mainly
remain  in  the  eastern  part  of  Warsaw  and  in  the  periphery  of  the  western  part,
where the Ursus factory and the Steel factory (in Mlociny) are located. The reutili-
zation of old and big industrial areas makes more difficult that very often they are

Kiss, Éva Edit :
Traditional Industrial Areas of Large Cities in the Post-Socialist Era - The Case of Budapest and Warsaw.
In: Regionality and/or Locality. Pécs: Centre for Regional Studies, 2007. 143-155. p. Discussion Papers, Special
TRADITIONAL INDUSTRIAL AREAS OF LARGE CITIES IN THE POST-SOCIALIST…
15
1
polluted. And to clean them is very costly, as a consequence it is very hard to find
such investors who are willing to do that. In fact, the transformation of the indus-
trial areas is a spontaneous process in Warsaw (Figure 4).
Figure 4
Industrial areas of Warsaw in 2004

Source: Sleszynski P. 2005
(Re)utilization of industrial areas
Derelict and/or redundant industrial areas and buildings have or are (re)utilized in
quite different ways in both cities, which, however,  show lots of similarities. The
way  of  reutilization  depends  on  the  intricate  relationship  of  different factors (size
and  location  of  the  given  industrial area, the number of  firms  accommodated  and
their sectoral structure, circle of owners and the volume of changes in the utiliza-

Kiss, Éva Edit :
Traditional Industrial Areas of Large Cities in the Post-Socialist Era - The Case of Budapest and Warsaw.
In: Regionality and/or Locality. Pécs: Centre for Regional Studies, 2007. 143-155. p. Discussion Papers, Special
TRADITIONAL INDUSTRIAL AREAS OF LARGE CITIES IN THE POST-SOCIALIST…
15
3
way.  At  the  same  time  in  Warsaw  mostly  office  functions  have  appeared  in  old
industrial buildings located relatively close to the city centre. Lots of financial es-
tablishments have occupied the renewed industrial buildings e.g. in Wola, along the
street ‘Kasprzaka’ (Figure 6).
Figure 6
A special way of reutilization
(the original structure of old industrial buildings are kept
and hey are covered by modern glass-walls)

Source: Own elaboration.
Functional change in an old industrial area: former industrial areas are reutilized
for different non-industrial purposes. In the Hungarian capital old industrial areas
are  reutilized  very  often  for  commercial  and  service  functions.  These  are  brown-
field  investments  while  in  Warsaw  shopping  malls  were  generally  established  as
greenfield investments, because there  were  much  freer  areas than in  Budapest. In
Budapest Duna Plaza is the best example. It was established on the place of a for-
mer shipyard (Figure 7).
In the 1990s mainly commercial and office functions have dominated, but later,
from the turn of millennium other functions (e.g. residential, storing and logistics)
have come to the front. For example: in Poland over 120 office buildings have been
constructed, many of them in Warsaw, since 1989. Thus, Warsaw has become the
largest  market  of  commercial  office  space  in  Central  Europe  by  the  beginning  of
the  21st  century  (Weclawowicz,  2004).  Last  years,  however,  the  reutilization  for
residential  purposes  became  more  and  more  common  in  both  cities.  In  2005  in
Warsaw 2,755 dwellings have been built while in Budapest 12,303. It is also fre-

Kiss, Éva Edit :
Traditional Industrial Areas of Large Cities in the Post-Socialist Era - The Case of Budapest and Warsaw.
In: Regionality and/or Locality. Pécs: Centre for Regional Studies, 2007. 143-155. p. Discussion Papers, Special
TRADITIONAL INDUSTRIAL AREAS OF LARGE CITIES IN THE POST-SOCIALIST…
15
5
Hungarian  capital  this  happened  much  later.  At  the  same  time  similarities  to  the
other East Central European cities (e.g. to Warsaw) can be revealed as well. Thus,
the cities, which are developing in different parts of Europe are becoming more and
more similar to each other (Weclawowicz, 1992).
The  reutilization  of  the  traditional  industrial  areas  completely  transform  their
surroundings  and  the  former  industrial  landscape.  Furthermore  the  whole  urban
landscape, atmosphere and image of the district have been transformed. Even more
the structure of the local society has also changed.
References
Bernát, T.–Viszkei, M. (eds.) 1972: Budapest társadalmának és gazdaságának 100 éve [100 years of
social and economic  development of Budapest])  Budapest, Közgazdasági és Jogi Könyvkiadó.
278 p.
Chapman, K.–Walker, D. 1988: Industrial location. Principles and policies. Oxford, Basil Blackwell
Ltd. 305 p.
Gritsai,  O.  1997a:  The  economic  restructuring  of  Moscow  in  the  international  context.  GeoJournal.
42. 4. pp. 341–347.
Gritsai, O. 1997b: Busniess services and restructuring of urban space in Moscow. GeoJournal. 42. 4.
pp. 365–376.
Hillman,  A.  L.  1992:  Enterprise restructuring  in  the  transition  from  Hungarian  market  socialism.  In
Hillman, A. L.–Milanovic, B. (eds.): The transition from socialism in Eastern Europe. Domestic
restructuring and foreign trade. Washington, World Bank. pp. 179–196.
Kiss, É. 1993: A budapesti ipar szervezeti felépítése és néhány jellemzıje [Organizational pattern and
some characteritics of industry in Budapest.] Földrajzi Értesítı. 42. 1–4. pp. 225–242.
Kiss,  É.  2002:  Restructuring  in  the  industrial  areas  of  Budapest  in  the    period  of  transition.  Urban
Studies. Vol. 39. 1. pp. 69–84.
Kluczka,  G. 1996: A budapesti belváros átalakuló funkciói [Transforming functions of the inner city
of  Budapest].  In  Dövényi,  Z.  (ed.):  Tér-Gazdaság-Társadalom.  Budapest,  MTA  Földrajztudo-
mányi Kutatóintézet. pp. 19–29.
Korec,  P.  1997:  New  tendencies  of  manufacturing  development  in  Bratislava.  In  Kovács,  Z.–
Wiebner,  R.  (eds.):  Processe  und  Perspektivender  Stadtenwicklung  in  Ostmitteleuropa.  Passau,
L.I.S. Verlag. pp. 145–156.
Korcelli,  P.  1995.  Urban  restructuring  in  East-Central  Europe:  selected    questions.  Geographia
Polonica. 66. pp. 7–12.
Misztal,  S.  1997.  Deindustrialization  of  Warsaw  and  redevelopment  problems  of  derelict  industrial
areas.  In  Kovács,  Z.–Wiebner,  R.  (eds.):  Processe  und  Perspektivender  Stadtenwicklung  in
Ostmitteleuropa. Passau, L.I.S. Verlag. pp. 189–205.
Preisich, G. 1969. Budapest városépítésének története. Budapest, Mőszaki Könyvkiadó. 310 p.
Potrykowska,  A.  1995.  Restructuralization,  deindustrialization  and  unemployment  in  Poland:  case
study of Warsaw. Geographia  Polonica, 64. pp. 19–36.
Sleszynski, P. 2005. The changes of Warsaw’s  functional structure after 1989.  In Czapiewski, K.–
Komornicki, T. (eds.): Proceedings. Warsaw Regional Forum, IGiPZPAN. pp. 63–72.
Weclawowicz,  G.  1992:  A  városok  térbeni-társadalmi  szerkezete  Kelet-Közép-Európában.    Tér  és
Társadalom. Vol. 6. 3–4. pp. 215–225.
Weclawowicz,  G.  2004:  Poland.    In  Van  Kempen,  R.  –Vermeulen,  M.–Baan,  A.  eds.  Urban  issues
and urban polices  in the new EU countries.  Ashgate Publishers, Rotterdam. pp. 61–77.