Józsefváros is rapidly becoming the new-cool part of Pest as locals escape the increasingly boisterous nightlife of the Jewish Quarter in District 7. This is particularly true for the area behind the National Museum, which is known as the Palace District. In the 19th century the wealthy nobility from the countryside, attracted by the increasingly buoyant political life in Pest, built extravagant mansions here.
Three of the most impressive are directly behind the National Museum. It’s also worth taking a walk down Bródy Sándor, Horánszky, and Múzeum Streets to enjoy the architecture. Both the café inside the Szabó Ervin Library (after a quick check-in, make your way to the chandelier-studded, wood-paneled 4th floor) and Építészpince offer a unique chance to go inside these marvelous buildings.
Today the neighborhood is more like a big college district, with four different Hungarian universities having campuses in the nearby streets. In fact, Central Europe's only university for Jewish studies is also located not far. Wallet-friendly cafés and tea houses like Műhely Egyetem Café and Altair mainly cater to the student population.
The hip Lumen Café is a good place to start the day with new-wave coffee and egg-based breakfast options. Bisztrónyúl is a charming designer store and café in the Palace District that's also worth a quick visit. For lunch, you're unlikely to be disappointed at Al Dente, where the Italian chef makes authentic southern-Italian dishes simply and well. They can be washed down with reasonably-priced wine from the Apulia region. Interestingly, one of Budapest's best Indian restaurants (Curry House) is also in District 8.
The highlight of the culinarily not-yet-so-developed District 8 is Padron, a cute, reliable, family-run Spanish tapas place. If you like the feel of the neighborhood, continue on for drinks back to Lumen, which transforms into a buzzing bar for local hipsters and bohemians. For a true cultural immersion into everyday Budapest life, stop by for a shot at Krúdy Söröző, which draws an eclectic crowd from all facets of Budapest life.
The outer part of District 8, known to some as the Harlem of Budapest, is inhabited by an eclectic group of people including many low-income residents. The area is totally safe during the day, come nighttime, it gets eerily deserted. One of the highlights here is Csiga Café, which is a café, restaurant, and bar, all in one, with a younger crowd and increasingly more tourists. Next to it stands the imposing, 1896 building of the Rákóczi Market Hall. It hasn't yet managed to make the full transition away from communist times but that's part of its charm. It's also worth visiting Műterem Kávézó, a coffee roaster and café, whose owner deserves a tip of the hat for bringing specialty coffee to this neighborhood, rather than to a well-trodden, inner-city location.
The streets in and around Népszínház Street have been for decades the home of immigrants and various ethnic minorities, including the Roma, Turks, Arabs, and Africans. Its chaotic, lively, and littered streets, diverse local population, and small businesses (including a Persian and a Turkish grocery store, and a Nigerian barber shop) offer an unexpected glimpse of the colorful Budapest which even some locals are unaware of. The often shockingly dilapidated condition of the residential buildings here stands in wild contrast to the pristine facades found downtown.
The outer part of District 8's packed bar scene is perhaps its main attraction and best kept secret. These bars are predominantly frequented by students and non-establishment, free-spirited locals and offer a good chance to see this face of the city too. Kék Ló and Hintaló Iszoda are popular among students. Macska, known for its local craft beer selections, draws a somewhat older, and similarly laid-back crowd. For the most rebellious types and an increasingly raucous atmosphere, make your way to Gólya or Auróra.