Most visitors to Budapest spend their time in the city without ever setting foot in Újlipótváros. It's a tranquil, middle class area with a unique housing stock, a couple of excellent restaurants and cafés, and a lively commercial street. Built in the 1930s, it's a relatively new neighborhood without any earth-shatteringly important landmarks, likely the reason why it falls under the radar of many tourist guide books. Újlipótváros is a 10-minute walk north from the Hungarian Parliament building, occupying parts of District 13.
Architecturally, this neighborhood is strikingly different from the rest of the city’s mainly late 19th century revivalist constructions, instead featuring rows of modernist buildings. The houses surrounding Szent István Park, the epicenter of Újlipótváros, are considered to be the crown jewels of modernist Hungarian architecture (particularly 38 Pozsonyi Way; try to sneak in to the marble-clad lobby for the full experience). With views onto the Danube, they command correspondingly steep price tags.
The local residents, many of them Jewish, include many middle-class intellectuals and young families who bring a spirit of liveliness to the streets. The center of activity is along Pozsonyi Road (especially the section up to Szent István Park), lined with cafés, restaurants, bookstores, and art galleries. There are plenty of slightly overpriced and hip specialty cafés to choose from here, and you can't really go wrong with either.
The best option for a healthy breakfast in Újlipótváros is the snug Sarki Fűszeres, located on the ground floor of a 1940s apartment building. With an expansive outdoor terrace, it's especially enjoyable during the summer months. Otherwise try Café Panini, a laid-back neighborhood breakfast joint with an eclectic group of local residents. For just-out-of-the-oven pastries and sourdough breads, pop in to Három Tarka Macska, a bakery so popular that a line often stretches out the door. . Láng-Téka Könyvesbolt is a mandatory stop for bookworms. This bookstore specializes in books by Jewish authors from around the world, and while most are in Hungarian, a select group of English publications are also available. Almost next door is Piccolo Söröző, a iconic neighborhood bar from 1997 known for its left-wing regulars. A beer and a shot of Unicum will help you settle in and immerse with the locals.
Szent István Park is a spacious green area with plenty of benches, landscaped lawns, and well-maintained flower beds. Hang around here for 20 minutes to observe a cross section of local residents. In the center of the park stands a statue of Raoul Wallenberg, the Swedish diplomat who saved the lives of thousands of Budapest Jews during the Holocaust by granting diplomatic immunity to many of the surrounding buildings.
Although not yet a gastronomic paradise, Újlipótváros has a handful of good options for lunch and dinner. Oriental Soup House and KHAN, both chic, open-kitchen Vietnamese restaurants, draw trendy crowds from near and far. For affordable, traditional Hungarian fare, visit Pozsonyi Kisvendéglő or Tera Magyar Konyhája. Babka is a popular neighborhood meet-up spot thanks to its central location on Pozsonyi. The Middle-Eastern dishes are unremarkable but the restaurant has a lively ambiance and good cocktails. If you enjoy jazz, head over to the Budapest Jazz Club for a live concert (see their upcoming schedule).