10 ms·

The myth of excess vacant housing distracts from solutions

86 points by Plasmoid 6y ago

karpierz 6y ago
> While it’s possible that some homes in this category are indeed being kept off-market by an owner holding out for a larger payout down the line, given the breadth of this category it’s implausible that this category represents any meaningful part of that total number. The article doesn't show that it's a myth, it just says roughly half of the vacancies are market vacancies (lease ended and looking for new tenant), the other half are non-market, and then waves its hands and speculates that the non-market half probably isn't livable anyways. Maybe that's true but the article makes no effort to figure out if that's the case.
- ed25519FUUU 6y ago
  The conclusion I came to was that there’s no magic wand, and the only “real” solution is more housing. LA is a very desirable place to live, and the city has failed to deliver on the necessary new housing to economically support the demand.
  - harryh 6y ago
    To be more precise: The city has outlawed the construction of new housing to economically support the demand.
  - acdha 6y ago
    > the city has failed to deliver on the necessary new housing to economically support the demand. Less passively, current property owners have successfully lobbied the local government to increase the value of their properties. This is especially potent in California where Prop 13 heavily favors long-time owners. If you stand to make a fortune when you retire and are going to pay very little until then, you’re probably going to be in frequent contact with your elected officials.
  - snidane 6y ago
    Did you try hard enough? Inplement a small annual fee on the parcel based on market rate and watch the vacant housing appear back on the market in the blink of an eye. You can't clear the housing market without this. Instead of supply/demand dynamic you get a Greater Fool dynamic on the market.
    - epistasis 6y ago
      Charging taxes based on market value has been banned in the California constitution, with the passage of the disastrous Prop 13 in the late 1970s. It is the source of many problems in California. Taxes based on percentage of value are limited to 1% of purchase price, with a maximum increase of tax paid of 2% per year, which is sub inflationary. Presumably if we had a loooong run of time with property values increasing less than 2% per year, newly purchased homes would still be taxed at market value, but that's pretty far outside the normal realm of market behavior.
  - etripe 6y ago
    The question is whether politically there is a greater demand for available housing, or for ROI on already owned properties. Depending on which hypothesis you prefer, there either is a problem today or there isn't. When one factors in that this situation is decades in the making and present across most of the Western world, I would argue the political interest is in looking out for home owners, not starters, both in sheer voter numbers and the politicians' own group membership.
- joe_the_user 6y ago
  As far as I can just looking around my neighborhood and looking at a few known-vacant buildings, there are plenty of houses that are vacant for investment reasons. And the dynamics of the market sort of reinforce this. Real estate is a great investment but land lording is hard. Renting below market lowers the value your investment and so does leaving your investment open as a rental indefinitely. Sure, just about anything that opens up will get many applications. But most of those will be from people who technically can't afford the location - because house is unaffordable, people making 3x the rent you are charging are scarce and the most desperate people put in the most applications, so any landlord will find most people applying look like bad renters and not want to deal with the situation. And for the same reason, some portion of the "between renters" category may be actually off-market too. If the landlord is for the perfect renter, they may look forever.
- kuang_eleven 6y ago
  Weirdly, there is great evidence for the author's point, he just didn't mention it! In short, the vacancy rate is incredibly low, ~3.5% [1]. Taking the other data the author mentioned, that means that ~1.5% is non-market vacancies, of which only a subset is the much-ballyhooed investment vacancies. [1] https://www.census.gov/acs/www/data/data-tables-and-tools/data-profiles/ https://www.census.gov/acs/www/data/data-tables-and-tools/da...
  - alisonatwork 6y ago
    Although 3.5% might be small compared to the US or California average on that linked site, it still sounds like a lot to me. In a town with 10000 properties, that's 35 empty units. Even if only 15 weren't actively on the market, that could still get over a dozen homeless people off the streets, or provide a refuge for at risk members of the community who currently live with abusive parents or spouses due to not having the means to live alone. Obviously building more affordable properties is a longer term solution, but that doesn't mean that people who keep empty houses around aren't also part of the problem. Personally, I think there should be a "use it or lose it" tax on vacant properties. Edit: I realized after posting I'm off by an order of magnitude. It's 150-350 empty units! That would make a huge difference to homeless numbers almost anywhere.
    - erik_seaberg 6y ago
      That doesn’t mean 350 units have been sitting empty since last spring. It means at some point each unit waited two weeks for cleaning, viewing, lease approval, and a new tenant moving in.
      - alisonatwork 6y ago
        This doesn't come across as convincing to me. This would require that in any given community of 10000 dwellings, literally every single unit is a rental property, and that every single unit is vacated and has a new tenant move in every year. That might be true in certain specific communities like university residences, but I very much doubt it's the case in any ordinary urban community. In the US home ownership numbers are around 65%[1] (not 0%), and people on average only move about 11 times in their life[2] (not once per year). It seems to me entirely reasonable to assume that in a community that touts its low vacancy rate of 3.5%, there must still be a not insignificant absolute number of properties that remain unoccupied for a month or more every year. If that number truly were near-zero, then nobody should have a problem with a vacancy tax, or a squatter's rule designed to grant rights to actual members of the community who want to use a property left vacant for longer than a couple of months. [1] https://en.wikipedia.org/wiki/Home-ownership_in_the_United_States https://en.wikipedia.org/wiki/Home-ownership_in_the_United_S... [2] https://fivethirtyeight.com/features/how-many-times-the-average-person-moves/ https://fivethirtyeight.com/features/how-many-times-the-aver...
- asdff 6y ago
  Take Los Angeles where the median home is 900k now, homes sell like lightning, and you move into your apartment the week after you tour it because it's that competitive. There is demand to live here and has been forever, basically, probably always will given that's how it goes for large American cities. It is baffling how backwards the land use is. It shouldn't be possible for a lot zoned for mixed use commercial and residential could sit as a derelict burned out building for years(1). It was burned out recently, but street view from 2007 shows it's been abandoned for at least 14 years now. This metro station takes you either to hollywood or downtown LA in 10 minutes, massive job centers as well as nightlife areas. Anything built here would get signed leases that week, just like everything else in Koreatown. Other notable pieces of land use for this corner precious steps from the metro station are a gas station, an abandoned hyundai dealership, and a drive thru offering unhealthy food to the community. If someone quantified all the externalities, I'm sure poor land use alone causes trillions in economic and ecological damage to our cities in this country. This is our hardest problem. 1. https://www.google.com/maps/@34.0769362,-118.2918114,3a,75y,234.45h,111.68t/data=!3m6!1e1!3m4!1sX2X0y8PzBV_rUUXJTKndQw!2e0!7i16384!8i8192 https://www.google.com/maps/@34.0769362,-118.2918114,3a,75y,...
  - epistasis 6y ago
    The losses to workers from exclusionary land use are absolutely massive. A paper by Hsieh and Morettis has been the go-to analysis, with GDP growth changing by single digit percentages. However there was recently a simple math error found, and the effect is much higher, to multiple digit GDP changes. GDP has its flaws, but since these changes are due to wages, this is the worst sort of GDP loss since it would even out inequality. https://www.econlib.org/a-correction-on-housing-regulation/ https://www.econlib.org/a-correction-on-housing-regulation/
sidlls 6y ago
I'd argue that units kept purposely off-market in order to extract higher rents ought to face a tax that increase as the vacancy time accrues.
- vmception 6y ago
  Can also make a licensing system for housesitters too then
- harryh 6y ago
  It seems strange to have a tax that is based on the subjective motivations of a property owner. How would you even know why someone wasn't renting out a given property at a given moment in time?
  - leetcrew 6y ago
    what else would someone be doing with a property that they aren't themselves living in? if you support a punitive tax on people holding out for higher rent, you probably don't care if it also hits people who are merely speculating on real estate.
    - harryh 6y ago
      - Maybe they want to move into it later. - Maybe they haven't found a suitable tenant yet. - Maybe they are holding it open for a friend or family member. - Maybe they want to do some renovations before renting it out. - Maybe they want to sell the property and it's easier to sell without an existing tenant. I can think of lots of reasons.
      - sudosysgen 6y ago
        >- Maybe they want to move into it later. Then they should lease it meanwhile or pay the tax, it's rare for people to buy houses fully finished, say, a year in advance. >- Maybe they haven't found a suitable tenant yet. They can lower the price to find a suitable tenant faster. >- Maybe they are holding it open for a friend or family member. Then that friend or family can move there officially while still occupying their current dwelling until the grace period expires again. >- Maybe they want to do some renovations before renting it out. These laws in practice have an exemption for rénovations. >- Maybe they want to sell the property and it's easier to sell without an existing tenant. Then they should price it as to sell within the grace period, or pay the tax.
ed25519FUUU 6y ago
> There are, of course, a number of vacant units in any city at a given time. Yet, there are a multitude of reasons for these units to be vacant besides unscrupulous investors or rapacious landlords holding out for a better price. I really don’t see this as very economical for very long. Property taxes on a ~$1m house are about $1200 a month in LA. Maybe this is the reason there are some empty lots, but it’s not very convincing for empty homes.
marcinzm 6y ago
Does anyone have a list of specific reasons for why it would be more financially beneficial for a landlord to leave a place empty rather than to rent it? Keeping in mind that while it's empty they earn nothing but still have some amount of cost for the property. A year+ of lost income is going to take a long time to recoup. The only ones I've found is in NYC where due to rent control it's expensive to convert a controlled rental unit into a co-op/condo so landlords have an incentive to empty out buildings and keep them empty until the conversion.
- sudosysgen 6y ago
  Very simple - the landlord may have a commercial mortgage that requires re-negotiation if leased under a certain price. Beyond that, avoiding rent control that might durably keep the price low and limit its rise.
- leetcrew 6y ago
  depends on the scale of the operation. if you're a small time landlord, one bad set of tenants can easily wipe out several years worth of gains for all your properties. these types of landlords will often hold out for a while, passing over people who are willing to pay the market rent, until they find a tenant they trust not to trash the place.
  - marcinzm 6y ago
    But that would fall under the relatively short term category of market vacancies from the article. Most people who talk about the issue with vacancies seem to be referring to 6+ month vacancies where a landlord is not even looking for tenants.
- jariel 6y ago
  Some foreign owners want their money out of 'wherever' and are willing to pay a premium as a store of value. They're not interested in the hassle of 'renting'. Or, the price is not a big deal, they want a home in LA/NYC much the same as the rest of us might want a cottage/second home on the lake.
- 6y ago
seiferteric 6y ago
Maybe the banks (and gov't policy) are the problem. Easy loans mean people can take out ever increasing amounts of debt driving property values up and up. People dump all that money and have nothing left to improve or maintain properties (see million dollar+ track homes in the Bay Area). Meanwhile in order to service the ever increasing debt +property taxes, rents are driven up.
- tibbetts 6y ago
  The banks are just responding to government policy. To quote the article, the single family homeowners who think of rising property values as a birthright are the problem, along with politicians and regulators who cater to them. The banks are just an instrument.
bifrost 6y ago
People keep trotting out a trophe of "SF has zillions of empty units" and time and time again, thats simply not accurate. They lump the greater bay area into SF, its apples and oranges in terms of an actual market. The vacant units in SF are not quantified into useful groups, when you dig in the vacancy rate of habitable dwellings is well under 1% We gotta build.
- Kalium 6y ago
  It's a useful line to trot out if you subscribe to the narrative that there's plentiful resources to go around, if we just make the rich assholes share. In ideological terms, it's a very convenient position to work from. It means you never have to evaluate if housing policy has played a role, which is handy when you support all the individual policies concerned.
- calvinmorrison 6y ago
  Sometimes. In Philly there's a LOT of land. Let's get more rehabbed neighborhoods and less new condos near nice areas.
  - imtringued 6y ago
    Good idea. If the top cities are full, build more top cities.
    - bifrost 6y ago
      That is unlikely to happen for a variety of reasons; its easier to ruin a top city than build more.
reducesuffering 6y ago
I agree, it doesn't matter whether there is vacant housing or not, long term. If you supply enough housing to drop excess demand, it will pushing housing prices downward, leading to them being a poor investment, and any vacant housing will further sell off, leading to a positive feedback loop of increased housing supply.
- dzhiurgis 6y ago
  NZ’s Jacinda Ardern openly said they don’t want to see people to go to negative equity meaning they gonna protect them forever.
  - reducesuffering 6y ago
    Is it the lack of free markets causing distortion here? Housing as investment sure is wonky and seems problematic when government intervenes.
    - dzhiurgis 6y ago
      When subdividing a lot costs 50k just for paperwork (well there's more than that, but cmon) and takes months... When all imported building materials are spec'd by one company... When there's no competition from foreign labourers and locals doing coke off their fishing boat by 3PM... Yes there's some distortion in market.
jeffbee 6y ago
I track vacancies in newly-built apartment buildings is Oakland and Berkeley. There just aren't any, is the plain fact of the matter. For example the new building at Telegraph and 51st in Oakland currently has 19 of 204 units available, leasing out at a rate of about 1 per day. The building at 1500 San Pablo (at Jones) in Berkeley has 49 vacancies of 170 units, leasing about 3 per week. Both of these buildings have been open for less than a year and will hit 95% occupancy before they are even a year old. The absorption of these dwellings is so brisk, you don't need any more evidence that there is plenty of demand for new units.
- dleslie 6y ago
  It's not really about vacancies, is it? Vacancies are a convenient, simple, and clear "other" to blame for what is actually a complicated crisis _generations_ in the making. Only a small minority want to acknowledge that the future of urban centres looks more like Hong Kong and less like Springfield.
dleslie 6y ago
We had the same myth of vacancies here in Vancouver, and so the Province instituted a 2% vacancy tax on foreign owners. As evidenced by the ongoing market climb, this wasn't the panacea that many hoped for. We haven't designed or planned for the growth we're undergoing. It is a zoning and civic planning problem, first and foremost, and not a problem that can be solved by direct price manipulation.
- ttul 6y ago
  It made a difference for a while. But once those new vacancies were filled, the market seized again and it’s now once again airtight. They just aren’t responding to demand by allowing for enough new development. It’s insanity.
- Scoundreller 6y ago
  Not being a panacea doesn't make the intended problem being solved a myth. Maybe a fault with overestimating the scope of the problem, but that's about it.
  - vsef 6y ago
    The issue is that using an overinflated figure for the scale of the vacancy problem leads to the incorrect conclusion that meaningful change can happen by solving an alleged vacancy crisis. It can't. The scale is not large enough. It is a convenient issue to misdirect attention to for groups of diverse political leanings. Progressives and wealthy homeowners both can avoid any of the messy realities of needing to permit new housing while pretending as though there's this more politically palatable thing they can do instead.
- plank_time 6y ago
  I grew up in Vancouver since the 80s.Vancouverites cannot complain about not enough housing. In the 35 years since I came to Vancouver as a kid, there are so many condos everywhere, it looks like a bad joke. The massive amount of new housing made no difference housing prices which have never seen a crash in 40 years.
deleted 6y ago
[deleted]

86 points by Plasmoid 6y ago

> While it’s possible that some homes in this category are indeed being kept off-market by an owner holding out for a larger payout down the line, given the breadth of this category it’s implausible that this category represents any meaningful part of that total number. The article doesn't show that it's a myth, it just says roughly half of the vacancies are market vacancies (lease ended and looking for new tenant), the other half are non-market, and then waves its hands and speculates that the non-market half probably isn't livable anyways. Maybe that's true but the article makes no effort to figure out if that's the case.

ed25519FUUU 6y ago
The conclusion I came to was that there’s no magic wand, and the only “real” solution is more housing. LA is a very desirable place to live, and the city has failed to deliver on the necessary new housing to economically support the demand.
- harryh 6y ago
  To be more precise: The city has outlawed the construction of new housing to economically support the demand.
- acdha 6y ago
  > the city has failed to deliver on the necessary new housing to economically support the demand. Less passively, current property owners have successfully lobbied the local government to increase the value of their properties. This is especially potent in California where Prop 13 heavily favors long-time owners. If you stand to make a fortune when you retire and are going to pay very little until then, you’re probably going to be in frequent contact with your elected officials.
- snidane 6y ago
  Did you try hard enough? Inplement a small annual fee on the parcel based on market rate and watch the vacant housing appear back on the market in the blink of an eye. You can't clear the housing market without this. Instead of supply/demand dynamic you get a Greater Fool dynamic on the market.
  - epistasis 6y ago
    Charging taxes based on market value has been banned in the California constitution, with the passage of the disastrous Prop 13 in the late 1970s. It is the source of many problems in California. Taxes based on percentage of value are limited to 1% of purchase price, with a maximum increase of tax paid of 2% per year, which is sub inflationary. Presumably if we had a loooong run of time with property values increasing less than 2% per year, newly purchased homes would still be taxed at market value, but that's pretty far outside the normal realm of market behavior.
- etripe 6y ago
  The question is whether politically there is a greater demand for available housing, or for ROI on already owned properties. Depending on which hypothesis you prefer, there either is a problem today or there isn't. When one factors in that this situation is decades in the making and present across most of the Western world, I would argue the political interest is in looking out for home owners, not starters, both in sheer voter numbers and the politicians' own group membership.
joe_the_user 6y ago
As far as I can just looking around my neighborhood and looking at a few known-vacant buildings, there are plenty of houses that are vacant for investment reasons. And the dynamics of the market sort of reinforce this. Real estate is a great investment but land lording is hard. Renting below market lowers the value your investment and so does leaving your investment open as a rental indefinitely. Sure, just about anything that opens up will get many applications. But most of those will be from people who technically can't afford the location - because house is unaffordable, people making 3x the rent you are charging are scarce and the most desperate people put in the most applications, so any landlord will find most people applying look like bad renters and not want to deal with the situation. And for the same reason, some portion of the "between renters" category may be actually off-market too. If the landlord is for the perfect renter, they may look forever.
kuang_eleven 6y ago
Weirdly, there is great evidence for the author's point, he just didn't mention it! In short, the vacancy rate is incredibly low, ~3.5% [1]. Taking the other data the author mentioned, that means that ~1.5% is non-market vacancies, of which only a subset is the much-ballyhooed investment vacancies. [1] https://www.census.gov/acs/www/data/data-tables-and-tools/data-profiles/ https://www.census.gov/acs/www/data/data-tables-and-tools/da...
- alisonatwork 6y ago
  Although 3.5% might be small compared to the US or California average on that linked site, it still sounds like a lot to me. In a town with 10000 properties, that's 35 empty units. Even if only 15 weren't actively on the market, that could still get over a dozen homeless people off the streets, or provide a refuge for at risk members of the community who currently live with abusive parents or spouses due to not having the means to live alone. Obviously building more affordable properties is a longer term solution, but that doesn't mean that people who keep empty houses around aren't also part of the problem. Personally, I think there should be a "use it or lose it" tax on vacant properties. Edit: I realized after posting I'm off by an order of magnitude. It's 150-350 empty units! That would make a huge difference to homeless numbers almost anywhere.
  - erik_seaberg 6y ago
    That doesn’t mean 350 units have been sitting empty since last spring. It means at some point each unit waited two weeks for cleaning, viewing, lease approval, and a new tenant moving in.
    - alisonatwork 6y ago
      This doesn't come across as convincing to me. This would require that in any given community of 10000 dwellings, literally every single unit is a rental property, and that every single unit is vacated and has a new tenant move in every year. That might be true in certain specific communities like university residences, but I very much doubt it's the case in any ordinary urban community. In the US home ownership numbers are around 65%[1] (not 0%), and people on average only move about 11 times in their life[2] (not once per year). It seems to me entirely reasonable to assume that in a community that touts its low vacancy rate of 3.5%, there must still be a not insignificant absolute number of properties that remain unoccupied for a month or more every year. If that number truly were near-zero, then nobody should have a problem with a vacancy tax, or a squatter's rule designed to grant rights to actual members of the community who want to use a property left vacant for longer than a couple of months. [1] https://en.wikipedia.org/wiki/Home-ownership_in_the_United_States https://en.wikipedia.org/wiki/Home-ownership_in_the_United_S... [2] https://fivethirtyeight.com/features/how-many-times-the-average-person-moves/ https://fivethirtyeight.com/features/how-many-times-the-aver...
asdff 6y ago
Take Los Angeles where the median home is 900k now, homes sell like lightning, and you move into your apartment the week after you tour it because it's that competitive. There is demand to live here and has been forever, basically, probably always will given that's how it goes for large American cities. It is baffling how backwards the land use is. It shouldn't be possible for a lot zoned for mixed use commercial and residential could sit as a derelict burned out building for years(1). It was burned out recently, but street view from 2007 shows it's been abandoned for at least 14 years now. This metro station takes you either to hollywood or downtown LA in 10 minutes, massive job centers as well as nightlife areas. Anything built here would get signed leases that week, just like everything else in Koreatown. Other notable pieces of land use for this corner precious steps from the metro station are a gas station, an abandoned hyundai dealership, and a drive thru offering unhealthy food to the community. If someone quantified all the externalities, I'm sure poor land use alone causes trillions in economic and ecological damage to our cities in this country. This is our hardest problem. 1. https://www.google.com/maps/@34.0769362,-118.2918114,3a,75y,234.45h,111.68t/data=!3m6!1e1!3m4!1sX2X0y8PzBV_rUUXJTKndQw!2e0!7i16384!8i8192 https://www.google.com/maps/@34.0769362,-118.2918114,3a,75y,...
- epistasis 6y ago
  The losses to workers from exclusionary land use are absolutely massive. A paper by Hsieh and Morettis has been the go-to analysis, with GDP growth changing by single digit percentages. However there was recently a simple math error found, and the effect is much higher, to multiple digit GDP changes. GDP has its flaws, but since these changes are due to wages, this is the worst sort of GDP loss since it would even out inequality. https://www.econlib.org/a-correction-on-housing-regulation/ https://www.econlib.org/a-correction-on-housing-regulation/

sidlls 6y ago

I'd argue that units kept purposely off-market in order to extract higher rents ought to face a tax that increase as the vacancy time accrues.

vmception 6y ago
Can also make a licensing system for housesitters too then
harryh 6y ago
It seems strange to have a tax that is based on the subjective motivations of a property owner. How would you even know why someone wasn't renting out a given property at a given moment in time?
- leetcrew 6y ago
  what else would someone be doing with a property that they aren't themselves living in? if you support a punitive tax on people holding out for higher rent, you probably don't care if it also hits people who are merely speculating on real estate.
  - harryh 6y ago
    - Maybe they want to move into it later. - Maybe they haven't found a suitable tenant yet. - Maybe they are holding it open for a friend or family member. - Maybe they want to do some renovations before renting it out. - Maybe they want to sell the property and it's easier to sell without an existing tenant. I can think of lots of reasons.
    - sudosysgen 6y ago
      >- Maybe they want to move into it later. Then they should lease it meanwhile or pay the tax, it's rare for people to buy houses fully finished, say, a year in advance. >- Maybe they haven't found a suitable tenant yet. They can lower the price to find a suitable tenant faster. >- Maybe they are holding it open for a friend or family member. Then that friend or family can move there officially while still occupying their current dwelling until the grace period expires again. >- Maybe they want to do some renovations before renting it out. These laws in practice have an exemption for rénovations. >- Maybe they want to sell the property and it's easier to sell without an existing tenant. Then they should price it as to sell within the grace period, or pay the tax.

ed25519FUUU 6y ago

> There are, of course, a number of vacant units in any city at a given time. Yet, there are a multitude of reasons for these units to be vacant besides unscrupulous investors or rapacious landlords holding out for a better price. I really don’t see this as very economical for very long. Property taxes on a ~$1m house are about $1200 a month in LA. Maybe this is the reason there are some empty lots, but it’s not very convincing for empty homes.

marcinzm 6y ago

Does anyone have a list of specific reasons for why it would be more financially beneficial for a landlord to leave a place empty rather than to rent it? Keeping in mind that while it's empty they earn nothing but still have some amount of cost for the property. A year+ of lost income is going to take a long time to recoup. The only ones I've found is in NYC where due to rent control it's expensive to convert a controlled rental unit into a co-op/condo so landlords have an incentive to empty out buildings and keep them empty until the conversion.

sudosysgen 6y ago
Very simple - the landlord may have a commercial mortgage that requires re-negotiation if leased under a certain price. Beyond that, avoiding rent control that might durably keep the price low and limit its rise.
leetcrew 6y ago
depends on the scale of the operation. if you're a small time landlord, one bad set of tenants can easily wipe out several years worth of gains for all your properties. these types of landlords will often hold out for a while, passing over people who are willing to pay the market rent, until they find a tenant they trust not to trash the place.
- marcinzm 6y ago
  But that would fall under the relatively short term category of market vacancies from the article. Most people who talk about the issue with vacancies seem to be referring to 6+ month vacancies where a landlord is not even looking for tenants.
jariel 6y ago
Some foreign owners want their money out of 'wherever' and are willing to pay a premium as a store of value. They're not interested in the hassle of 'renting'. Or, the price is not a big deal, they want a home in LA/NYC much the same as the rest of us might want a cottage/second home on the lake.
6y ago

seiferteric 6y ago

Maybe the banks (and gov't policy) are the problem. Easy loans mean people can take out ever increasing amounts of debt driving property values up and up. People dump all that money and have nothing left to improve or maintain properties (see million dollar+ track homes in the Bay Area). Meanwhile in order to service the ever increasing debt +property taxes, rents are driven up.

tibbetts 6y ago
The banks are just responding to government policy. To quote the article, the single family homeowners who think of rising property values as a birthright are the problem, along with politicians and regulators who cater to them. The banks are just an instrument.

bifrost 6y ago

People keep trotting out a trophe of "SF has zillions of empty units" and time and time again, thats simply not accurate. They lump the greater bay area into SF, its apples and oranges in terms of an actual market. The vacant units in SF are not quantified into useful groups, when you dig in the vacancy rate of habitable dwellings is well under 1% We gotta build.

Kalium 6y ago
It's a useful line to trot out if you subscribe to the narrative that there's plentiful resources to go around, if we just make the rich assholes share. In ideological terms, it's a very convenient position to work from. It means you never have to evaluate if housing policy has played a role, which is handy when you support all the individual policies concerned.
calvinmorrison 6y ago
Sometimes. In Philly there's a LOT of land. Let's get more rehabbed neighborhoods and less new condos near nice areas.
- imtringued 6y ago
  Good idea. If the top cities are full, build more top cities.
  - bifrost 6y ago
    That is unlikely to happen for a variety of reasons; its easier to ruin a top city than build more.

reducesuffering 6y ago

I agree, it doesn't matter whether there is vacant housing or not, long term. If you supply enough housing to drop excess demand, it will pushing housing prices downward, leading to them being a poor investment, and any vacant housing will further sell off, leading to a positive feedback loop of increased housing supply.

dzhiurgis 6y ago
NZ’s Jacinda Ardern openly said they don’t want to see people to go to negative equity meaning they gonna protect them forever.
- reducesuffering 6y ago
  Is it the lack of free markets causing distortion here? Housing as investment sure is wonky and seems problematic when government intervenes.
  - dzhiurgis 6y ago
    When subdividing a lot costs 50k just for paperwork (well there's more than that, but cmon) and takes months... When all imported building materials are spec'd by one company... When there's no competition from foreign labourers and locals doing coke off their fishing boat by 3PM... Yes there's some distortion in market.

jeffbee 6y ago

I track vacancies in newly-built apartment buildings is Oakland and Berkeley. There just aren't any, is the plain fact of the matter. For example the new building at Telegraph and 51st in Oakland currently has 19 of 204 units available, leasing out at a rate of about 1 per day. The building at 1500 San Pablo (at Jones) in Berkeley has 49 vacancies of 170 units, leasing about 3 per week. Both of these buildings have been open for less than a year and will hit 95% occupancy before they are even a year old. The absorption of these dwellings is so brisk, you don't need any more evidence that there is plenty of demand for new units.

dleslie 6y ago
It's not really about vacancies, is it? Vacancies are a convenient, simple, and clear "other" to blame for what is actually a complicated crisis _generations_ in the making. Only a small minority want to acknowledge that the future of urban centres looks more like Hong Kong and less like Springfield.

dleslie 6y ago

We had the same myth of vacancies here in Vancouver, and so the Province instituted a 2% vacancy tax on foreign owners. As evidenced by the ongoing market climb, this wasn't the panacea that many hoped for. We haven't designed or planned for the growth we're undergoing. It is a zoning and civic planning problem, first and foremost, and not a problem that can be solved by direct price manipulation.

ttul 6y ago
It made a difference for a while. But once those new vacancies were filled, the market seized again and it’s now once again airtight. They just aren’t responding to demand by allowing for enough new development. It’s insanity.
Scoundreller 6y ago
Not being a panacea doesn't make the intended problem being solved a myth. Maybe a fault with overestimating the scope of the problem, but that's about it.
- vsef 6y ago
  The issue is that using an overinflated figure for the scale of the vacancy problem leads to the incorrect conclusion that meaningful change can happen by solving an alleged vacancy crisis. It can't. The scale is not large enough. It is a convenient issue to misdirect attention to for groups of diverse political leanings. Progressives and wealthy homeowners both can avoid any of the messy realities of needing to permit new housing while pretending as though there's this more politically palatable thing they can do instead.
plank_time 6y ago
I grew up in Vancouver since the 80s.Vancouverites cannot complain about not enough housing. In the 35 years since I came to Vancouver as a kid, there are so many condos everywhere, it looks like a bad joke. The massive amount of new housing made no difference housing prices which have never seen a crash in 40 years.

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