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From the linked curbed article: """One night, on my way home from work, I pushed the wrong elevator button and got out on the floor below mine without realizin

From the linked curbed article: """One night, on my way home from work, I pushed the wrong elevator button and got out on the floor below mine without realizing it. My key wouldn’t fit the lock to what I had assumed was my door, so I turned the knob and stepped, to my astonishment, into a completely empty, totally untouched one-bedroom. I turned around and beelined to the elevator, worried that I’d get busted for trespassing, when I noticed strips of masking tape covering the door frames on all of the other (presumably empty) apartments on the floor. This was how I became aware of “warehousing,” the practice by which landlords keep unrented apartments off the market to create artificial scarcity. Building owners have always done this, especially in new constructions with lots of virgin inventory, because why give renters the upper hand if they don’t have to? But they really started doing it during the pandemic. On a 2022 episode of the real-estate-industry podcast Talking Manhattan, Gary Malin, COO of the Corcoran Group, made a surprising claim: “At one point during the downturn, the vacancy rate in the city was close to 25 percent,” he said. “You had owners who were sitting on hundreds if not thousands of empty apartments.”""" If there are extremely wealthy entities that can afford to soak up enough supply to meaningfully impact market prices, making it easier to build new housing is likely part of the equation, but it may not be the silver bullet. I don't know how many units are held unoccupied, but as someone from Detroit, I'd advise against letting supply get too far ahead of demand (Context: a major housing surplus developed in Detroit as the population dropped from ~2M in 1960 to ~0.6M today, and this surplus destroyed the value of homeowner's equity and lead to abandonment, blight, and massive arson rates).

dublinben 4y ago
The pandemic may have been a one-in-a-lifetime decrease in demand for housing in New York City. Even if the vacancy rate did reach 25% at one point, the price of apartments correspondingly plummeted from the winter of 2020 to 2021 by 24-33%, depending on size. [1] Now that demand has returned, and vacancy rates have plunged to their normal sub-5% level, rents in the city have hurtled back to their 2020 prices or even higher. [2] This is exactly what economics would predict of a market system with constrained supply. Demand is almost never as elastic as we recently experienced, and this only serves as further evidence of nonexistent undersupply being the primary cause of high prices. Not "warehousing" or hoarding of vacant housing that already exists somewhere. [1] https://www.zumper.com/rent-research/new-york-ny https://www.zumper.com/rent-research/new-york-ny [2] https://www.nyc.gov/site/hpd/news/023-22/hpd-releases-initial-findings-the-2021-new-york-city-housing-vacancy-survey https://www.nyc.gov/site/hpd/news/023-22/hpd-releases-initia...
- modriano 4y ago
  Another quote from the curbed article cited by the main post: """Look, it’s possible that my suspicions are baseless and all of these buildings are full. Maybe their tenants really did come flooding back to New York last year. Maybe some are former couples who broke up during the pandemic and needed twice as many apartments and others are remote workers from Milwaukee or Akron evading city taxes by claiming residency in their old states. Maybe they came without any furniture so they didn’t have to hire movers. Maybe they’re homeschooling their kids, taking Ubers instead of the subway, avoiding restaurants, and abstaining from all other activities that would expose them to public data collectors. Weirder things have happened here. But if you meet any of these people, give them a change-of-address form for me. They’re probably missing some good mail.""" One of the central points of the main article (exemplified by the opening sentences quoted below) is that demand hasn't returned. """I was impressed by most of this article in Curbed, which did some actual reporting on the discrepancy between landlords saying rents in New York City were surging "because people came flooding back" and the fact that, according to all data, people did not actually come flooding back. The reporting goes to impressive shoe-leather lengths -- the author even contacts the New York City Water Board for clarification on how much waste they processed in 2021!"""
xp84 4y ago
This is why I really want to see carrying costs for all types of vacant real estate vastly increased via punitive property taxes triggered by vacancy. Phase it in over a few years to allow large property owners to adjust slowly without crashing markets, but it just doesn't feel right that there are so many vacant units being essentially held off the market to keep pricing far above equilibrium. This applies to homes and commercial properties such as retail and office too. If prices were at equilibrium, vacancy rates would be near-zero, just units which were between tenants.

dublinben 4y ago

The pandemic may have been a one-in-a-lifetime decrease in demand for housing in New York City. Even if the vacancy rate did reach 25% at one point, the price of apartments correspondingly plummeted from the winter of 2020 to 2021 by 24-33%, depending on size. [1] Now that demand has returned, and vacancy rates have plunged to their normal sub-5% level, rents in the city have hurtled back to their 2020 prices or even higher. [2] This is exactly what economics would predict of a market system with constrained supply. Demand is almost never as elastic as we recently experienced, and this only serves as further evidence of nonexistent undersupply being the primary cause of high prices. Not "warehousing" or hoarding of vacant housing that already exists somewhere. [1] https://www.zumper.com/rent-research/new-york-ny https://www.zumper.com/rent-research/new-york-ny [2] https://www.nyc.gov/site/hpd/news/023-22/hpd-releases-initial-findings-the-2021-new-york-city-housing-vacancy-survey https://www.nyc.gov/site/hpd/news/023-22/hpd-releases-initia...

modriano 4y ago
Another quote from the curbed article cited by the main post: """Look, it’s possible that my suspicions are baseless and all of these buildings are full. Maybe their tenants really did come flooding back to New York last year. Maybe some are former couples who broke up during the pandemic and needed twice as many apartments and others are remote workers from Milwaukee or Akron evading city taxes by claiming residency in their old states. Maybe they came without any furniture so they didn’t have to hire movers. Maybe they’re homeschooling their kids, taking Ubers instead of the subway, avoiding restaurants, and abstaining from all other activities that would expose them to public data collectors. Weirder things have happened here. But if you meet any of these people, give them a change-of-address form for me. They’re probably missing some good mail.""" One of the central points of the main article (exemplified by the opening sentences quoted below) is that demand hasn't returned. """I was impressed by most of this article in Curbed, which did some actual reporting on the discrepancy between landlords saying rents in New York City were surging "because people came flooding back" and the fact that, according to all data, people did not actually come flooding back. The reporting goes to impressive shoe-leather lengths -- the author even contacts the New York City Water Board for clarification on how much waste they processed in 2021!"""

xp84 4y ago

This is why I really want to see carrying costs for all types of vacant real estate vastly increased via punitive property taxes triggered by vacancy. Phase it in over a few years to allow large property owners to adjust slowly without crashing markets, but it just doesn't feel right that there are so many vacant units being essentially held off the market to keep pricing far above equilibrium. This applies to homes and commercial properties such as retail and office too. If prices were at equilibrium, vacancy rates would be near-zero, just units which were between tenants.