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> If people buy the new houses as investments and leave them empty most of the year Fortunately, this is already a metric that is tracked, called the vacancy r

by stale2002 5y ago

> If people buy the new houses as investments and leave them empty most of the year Fortunately, this is already a metric that is tracked, called the vacancy rate. And what we see is, that in in-demand cities, that have high rents, the vacancy rate is pretty low. So, if the vacancy rate is 5%, that means that if you build 100 houses, then 95 of them are going to be lived in. Yes, it sucks that those other 5 houses are not lived in, but those extra 95 houses, in our example, are still a good thing. > This is precisely what happens in places like London It is really not. A quick google search shows that the vacancy rate is as low as any other major in-demand city.

whoknowswhat11 5y ago
One factor in vacancy rates at least in SF / NY - rent control. You really CANNOT rent to someone without a big risk - so if you have an elderly parent who might want to move in in the future, you have kids who might want a place - and are wealthy - you really need to keep place empty. So yes, the rich do leave I think more places empty in some places because they can afford to and because the economic calculation is not simple. If you rent and want to end the rental later you end up in a bad spot.
- stale2002 5y ago
  > more places empty in some places Ok, this is a nice story that one could make up. But once again, my point is that vacancy rate is something that is already tracked. In San Francisco, the vacancy rate is about 3.5%. So, in other words, regardless of whatever story you are making up about parents, or rent control or whatever, the actual data shows, that the vacancy rate is very low, and therefore not much of a problem.
  - whoknowswhat11 5y ago
    I'm not disagreeing at all. But I know of enough unusual vacancies in SF among the rich that it strikes me as a small corner factor. In another city (smaller, parents live there) EVERYONE rents when they are not in their space. I mean, even just for summer if traveling. But when you come back, the tenant must leave (and does). I know someone who sublet an extra room to someone, a year later her wonderful lease was destroyed, landlord sued her and the women never paid a dime, could not be evicted, claimed she felt unsafe and got a restraining order against the person actually paying rent etc so they ended paying rent on two places, one to live in and one for the women. I mean - this stuff does turn you off renting a small bit. That said, supply is REDICULOUSLY constrained around here, red tape is nuts, minimum requirements crazy, affordability payments high etc. So yeah, no question that there is artificial scarcity.
onion2k 5y ago
A quick Google will also show that the vacancy rate for high end property is higher, and that builders are building more high end property, so logically there is less useful housing stock being added than the overall vacancy rate would imply.
circlefavshape 5y ago
The vacancy rate in Dublin (in Ireland) is 1.6%, but I was there 2 weeks ago and there are so many empty buildings - some of them empty at least since I lived there back in the 90s/00s. I'm not sure that vacancy rate reflects the reality of a city's unproductive building stock

whoknowswhat11 5y ago

One factor in vacancy rates at least in SF / NY - rent control. You really CANNOT rent to someone without a big risk - so if you have an elderly parent who might want to move in in the future, you have kids who might want a place - and are wealthy - you really need to keep place empty. So yes, the rich do leave I think more places empty in some places because they can afford to and because the economic calculation is not simple. If you rent and want to end the rental later you end up in a bad spot.

stale2002 5y ago
> more places empty in some places Ok, this is a nice story that one could make up. But once again, my point is that vacancy rate is something that is already tracked. In San Francisco, the vacancy rate is about 3.5%. So, in other words, regardless of whatever story you are making up about parents, or rent control or whatever, the actual data shows, that the vacancy rate is very low, and therefore not much of a problem.
- whoknowswhat11 5y ago
  I'm not disagreeing at all. But I know of enough unusual vacancies in SF among the rich that it strikes me as a small corner factor. In another city (smaller, parents live there) EVERYONE rents when they are not in their space. I mean, even just for summer if traveling. But when you come back, the tenant must leave (and does). I know someone who sublet an extra room to someone, a year later her wonderful lease was destroyed, landlord sued her and the women never paid a dime, could not be evicted, claimed she felt unsafe and got a restraining order against the person actually paying rent etc so they ended paying rent on two places, one to live in and one for the women. I mean - this stuff does turn you off renting a small bit. That said, supply is REDICULOUSLY constrained around here, red tape is nuts, minimum requirements crazy, affordability payments high etc. So yeah, no question that there is artificial scarcity.

onion2k 5y ago

A quick Google will also show that the vacancy rate for high end property is higher, and that builders are building more high end property, so logically there is less useful housing stock being added than the overall vacancy rate would imply.

circlefavshape 5y ago

The vacancy rate in Dublin (in Ireland) is 1.6%, but I was there 2 weeks ago and there are so many empty buildings - some of them empty at least since I lived there back in the 90s/00s. I'm not sure that vacancy rate reflects the reality of a city's unproductive building stock