5.6M vacant homes and counting: There's a housing crisis brewing in the US | Hacker News Reader

5.6M vacant homes and counting: There's a housing crisis brewing in the US

economictimes.indiatimes.com

19 pointsharambae75 comments

Is this an AI article? It seems to be completely unsourced and has no clear explanation of what it is saying?

"the major reason for this Epic housing crisis in some of the" - Why is "epic" capitalized?

There is both a housing crunch and massive rental vacancy? No discussion of which metro areas? The article says rates are "historically low"? Like what is going on?

I was going to point this out and surprised you were the only comment bringing it to light. This is a completely unsourced article with one quote from the India Times???

I like to refer to this kind of article when a kid has trouble understanding why they need to provide sources in their homework. Sometimes it's difficult for them to understand that this kind of assertation, that people use constantly in a conversational context, just sounds like a poorly formulated opinion when it's written down.

> This clearly means that the rental vacancy has increased in the last few years which has led to many homes in the nation's largest metros sitting empty, even though some of them are at very reasonable prices.

People moved out of cities. There's less demand, but prices are sticky because you can't risk taking less money than you owe on the unit without defaulting on your loans. There's not really a soft-landing in these markets without some sort of government subsidized refinancing options. But as a nice side effect it would alleviate rent prices in these areas.

Still, I don't think people should worry about economic contagion like in 2007. This effect is geographically isolated specifically to key metro areas, is concentrated with institutional real estate investors, and these debts have not been chopped and screwed into as many tranches of CBO packages as previously.

Interesting. There was a discussion on reddit yesterday from a realtor commenting on how people were getting loans for >50% of their income again and worried about a crash.

Do you mean yearly income?

Houses have been historically between 5-10x of your yearly income.

If you could buy a house with less than half of your yearly income, might as well save for a year and buy without a loan.

I think that they meant the monthly mortgage payments, not the total price of the house.

They mean to cover their loan payments they need to pay >50% of their income.

https://fred.stlouisfed.org/graph/?g=1slOZ

Vacancy rates peaked around the subprime crisis and are back down close to norms. 2022 was about the lowest it's been in decades. Vacancy doesn't mean lying fallow, they can be between owners/tenants. There is also likely a huge mismatch between available inventory and location.

Is 5.6 million a lot? Where are they located? There are 127 million "households" in the US. And 258 million adults. I know there are unmarried/non-partner adults currently sharing living space who would prefer to acquire their own residence, so that 127 million number wants to go up. Seems like the issue is not enough housing in desirable places. And not enough desirable places, so the demand gets concentrated excessively into the small number of nice, convenient places.

Build more trams and subway and regional rail lines. Upzone and pedestrian-orient more areas around transit. People want to live in places like this but they cannot because the few places that do exist like this have such high demand and prices are high.

US Census data https://www.census.gov/housing/hvs/data/histtabs.html

Table 7 has a good summary of vacancies. I can't imagine where they got the 5.6m number.

Something I'm really curious about is what proportion of these vacant houses are in disrepair, if you've done any amount of urban exploring (or watched other people do it) it can be shocking how fast buildings can fall apart in some places. There are entire apartment buildings in Detroit, Gary, etc, with a negative value. The land isn't worth much and the building is in such bad shape the only thing to be done is to demo it and rebuild, which is quite expensive.

There are a lot of vacant homes...largely in places where people don't want to live. We should allow people to build where people want to live via upzoning, etc.

Maybe just reduce price?

Most of these homes are in regions with declining populations and scarce opportunity for employment.

This would be a good argument for remote work -- let more worker WFH and they can buy those houses in the sticks.

But then the expensive city commercial spaces will give the businesses more losses. Can't have that.

Gotta keep the Ponzi scheme of the stock market inflated. Without people pouring their earnings into it in the form of 401ks, the record highs can’t be guaranteed - whole thing will collapse.

Remote workers don't want to live in run down rust belt and rural communities

There is evidence they want to move where housing is affordable, including parts of the rust belt and rural communities.

https://www.yardikube.com/blog/remote-workers-leading-the-mi...

https://www.wcnc.com/article/money/charlotte-north-carolina-...

https://www.fanniemae.com/media/48891/display

https://www.americanexperiment.org/study-finds-that-remote-w...

https://web.archive.org/web/20230127175520/https://www.rural...

Fat pipes and buying your eggs from a neighbor sound like a good combo to me.

Enter WFH

Why would I want to work from home in a terrible location?

Pay off debt?

To save more money and retire early?

There's a vast amount of non-terrible space that used to be uninhabitable due to zero economic activity

If you're one of the people who keeps complaining about how you can't afford a home, maybe you'd prefer it to renting for the rest of your life.

And, if you consider everywhere that you can remote work from to be "a terrible location", then I suspect your definition needs adjusted...

This comment only makes sense if you are assuming a significant majority of these places are "terrible", which is baffling to me, unless you are silently using your personal preferences to define "terrible" in the context of the larger conversation.

the people able to work from home are often incredibly well paid and are eating up real estate in expensive areas

there's no significant work from home initiative at the lower end of the pay scale

if anything wfh has exacerbated the problem, wealthier tech employees are living in desirable cities while people making less and have to go to the office don't have access to local-to-work real estate

Incredibly well paid and eating up real estate in expensive areas?

"How much does a Work From Home make? As of Oct 11, 2024, the average annual pay for a Work From Home in the United States is $61,178 a year. Just in case you need a simple salary calculator, that works out to be approximately $29.41 an hour."

https://www.ziprecruiter.com/Salaries/Work-From-Home-Salary

if you choose to believe ziprecruiter that's fine with me

Of course I would, you made a claim without any evidence, data or numbers to back it up and zip recruiter is a site dedicated to hiring.

at least I'm not financially incentivized to lie to you

You need to establish that it's a lie first, and to do that you need evidence.

conveniently zip recruiter's data is proprietary

again, believe who you want... but it's a little funny to blindly believe a company incentivized to lie to you more than any other random anecdote

we're on equal footing in terms of evidence (I can build a fake chart based on my own data if you'd be more likely to believe that) and I have less of a financial incentive to lie to you

Do you seriously think that you stating an claim (which doesn't even really make sense) is evidence?

Do you actually not know what evidence is? Evidence is actual information gathered up from where it was created.

Evidence is not you giving an opinion out of frustration because you want other people to agree that 'remote workers are inflating real estate prices'.

https://www.zippia.com/remote-careers-2069923/salary/

https://www.flexjobs.com/blog/post/common-remote-jobs-how-mu...

https://www.cnbc.com/2024/03/27/remote-workers-get-up-to-30p...

You have no numbers and no information.

You aren't even explaining where you are getting your ideas and how you came to your own conclusion.

All you did was state something and start calling it the truth, then you can't believe that someone would contradict it with real sourced data.

again, you're falling for the assumption that proprietary corporate data is fact — the CNBC article you cite also cites zip recruiter and you couldn't audit that data if you wanted to...

I'm doing the exact same thing zip recruiter is and you can't prove otherwise, you are providing me with 0 data that can be independently verified... you can't even look up their methodologies

You made the claims in the first place that "the people able to work from home are often incredibly well paid and are eating up real estate in expensive areas"

so lets see your "independently verified auditable data".

I don't have any, but the lack of that data doesn't do anything to validate zip recruiter's — in other words, a bad source isn't better than no source

You made a claim without evidence, now you say all the links I gave you are bad and all the data is bad. Somehow not only ziprecruiter is wrong, but flexjobs and zippia are wrong.

These are just more claims without evidence. You saying something doesn't make it true.

I almost admire the confidence to blindly make a claim without any data or evidence and then to claim again without evidence that the actual data is somehow a lie. No explanation on anything, just a claim over and over.

you are making blind claims with made up unverifiable data, you're being tricked

if it were actual data you could show me tabulation, not some blog post graphic made for marketing purposes

this is a major lack of media literacy on display

you are making blind claims

You made the claim. Your claim had no evidence. You made a 'blind claim'.

with made up unverifiable data

Prove it.

you're being tricked

Tricked by data from multiple different sources? Prove it.

you could show me tabulation

Go ahead and show me that.

this is a major lack of media literacy on display

You literally don't understand the difference between information and you stating something you want people to agree with. That's not even just a 'media literacy' problem you're having, it's wishful religious thinking.

I'm always fascinated when someone refuses to even explain why they think what they are saying is true, and not only does actual data and evidence not change their mind, they refuse to believe it, but can't even explain why they don't believe it.

Just admit to yourself that what you are saying is not based on reality, it's just something you want other people to agree with.

> Prove it.

That's the trick! no one can because they don't share the data or methodologies!

You are doing the same thing you're accusing me of and what I'm saying is you're right! there's no verifiable data on either side.

My comment and what ziprecruiter is posting are backed by the equivalent amount of factual information, which as far as we can prove is exactly 0!

What I'm saying is only based on my experience, and what you're sharing isn't any better... this is the appeal to authority fallacy.

At least I'm not financially motivated to trick you, they are.

That's the trick! no one can because they don't share the data or methodologies

What is your data and methodology?

Ziprecruiter is a site companies post jobs. You don't know where their data comes from?

What about the other links? Why do you ignore them?

What I'm saying is only based on my experience,

What experience?

the appeal to authority fallacy

Posting data from a company that collects that data is not "appeal to authority". You have this completely wrong. Appeal to authority would be someone claiming your boss is right about something they know nothing about because they're your boss.

Key parts of are lack of expertise and a lack of evidence. These two things don't apply.

https://en.wikipedia.org/wiki/Argument_from_authority

https://www.grammarly.com/blog/rhetorical-devices/appeal-to-...

Seriously try rethinking this all from the ground up. Go and find someone in your life and show them this conversation and see if they think someone linking you wage stats from a jobs site and two other places and you saying "no I don't think so" are the same thing.

Don't forget that you not only claimed remote workers were "incredibly well paid" but also that they are "eating up real estate in expensive areas". Are you ready to walk that back since you can't do anything but repeat that you believe it for no reason?

so maybe just lower the price some more?

Yes - the housing crisis is a chicken and egg problem. How do we get people to create opportunities in places where there are few workers? How do we get workers to move into places where there are few opportunities? I am not educated on this, and it's not a problem intrinsic to modernity, so how has this problem been solved historically? Does it really just boil down to "it happened slowly"?

There are towns in rural Italy where you can buy a house for €1 if you promise the fix it up and live there. Still there are few takers. It’s a tough problem to solve.

Italy has a reputation for its slowly moving bureaucratic machine though, so the issue may be more complex than just looking at the price. This offer would be more attractive for me if it didn't potentially come with hidden strings attached (do you need to work with an institution tasked with preserving old buildings? what are the permitting requirements? will it take ages to get approval to do anything?). People in Italy probably know answers to those questions, but as a foreigner slowly thinking about a place in Europe to settle in, those would be things that'd made me think twice about taking up that offer.

Definitely. And if I had to take a guess, yes, it happens slowly. I guess we could use Detroit perhaps as an example. Booming, industry sorta crumbled there, made it no longer desirable. Because of that, Detroit for a city has become cheap and to my understanding it is now experiencing a boom? So it maybe it just takes awhile because a correction needs to take place to make it cheap enough for people to move back in? Then I would guess there is also a, enough time needs to pass for a particular perception to fade.

As far as I know, historically it wasn't fixed. People didn't live just anywhere they wanted, they lived where there were exploitable resources, be it farmland, mines, or what have you. If the resources dried up the city simply ceased to be. The idea of creating opportunities where people live can only exist within tertiary and quaternary economies, possibly in secondary. Until about two or three hundred years ago nearly all economy was primary, with a small secondary sector right next to where the resources were extracted (because logistics also wasn't as advanced as what we have today; it didn't make sense to move raw materials very far).

Freight was so important that pre-railroad cities were mostly built around harbors or navigable rivers, not just anywhere they wanted.

Which, isn’t necessarily a bad thing. Modern residential (and small scale commercial) construction is designed for a 30-50 year useful life. The structure may be worth renovating if the location / design remain relevant, but it’s not like there’s a huge amount of wasted value. A larger waste would be encouraging labor to be under-utilized.

completely untrue factoid that constantly gets repeated for some reason, there are 3 vacant units per homeless in Los Angeles for example https://gigafact.org/fact-briefs/are-there-more-vacant-homes...

the ratio is about the same in New York City proper, and if you include the entire country, the ratio skyrockets to >27 vacant units per homeless person https://www.self.inc/info/empty-homes/

So the LA Metro has 8% of the population of the US and 2% of the vacation homes?

If the ratio is 3:1 in major cities, and 27:1 nationally, wouldn't that logically mean that most of them are not in major cities, per-capita (and perhaps absolutely too, I don't know)? Of course that doesn't necessarily mean they are in areas of "declining population and scarce opportunity", but your premise appears to be that a majority of vacancies in cities would be a counter-example.

The very first sentence of this article is "There may be a massive housing crisis boiling up in the United States mostly centered around the unavailability of homes in the largest metros of the country."

Yes, there is a shortage of housing in the largest metros.

The unoccupied homes are in small towns with declining populations.

no reduce price, only subsidize demand

We have to be honest with ourselves and admit that markets, efficient or inefficient, cannot guarantee an outcome where every consumer can find a matching supplier. Ignoring the fact that there's people who comprise the demand curve to the right of the equilibrium point[1] is delusional. The cost of fooling ourselves with that delusion results in human suffering and ultimately lives.

Efficient distribution simply isn't a valid response to dividing people into those who who are the beneficiaries of distribution and those who aren't. "Sorry you can't afford a home, but don't worry, it means someone else could," is unjustifiable.

This is literally Economics 101, and understanding the consequences as they relate to housing.

1. Latent demand

Well, public policy is not as hard as physics. At least the homes exist. But you have to make it attractive to fill the homes and deter vacancies.

The problem is all these properties are in regions that have been in economic decline for decades at this point - sure there's a house, but there may not be jobs, many are extremely remote so even if there are jobs, there may not necessarily be any community (in the literal "no other people" sense not the figurative "there's a great sense of community" sense :D), etc

It seems to be pretty hard in reality, the theoretical frameworks might be easier to reason about than theoretical physics but the thing about public policy is that materialising it in reality is actually the very hard part of it.

Though the part "make it work in reality" has been pretty hard for theoretical physics lately.

friendly reminder that rent control causes vacancies like this. because its better to wait for a better market than let someone sit on your discounted property forever.

If rent is controlled, then waiting doesn't do anything does it? Also, rent control barely exists anywhere in the country.

depends on the rent control. In most cases you’re allowed to rent at any price you want when changing the tenant.

> friendly reminder that rent control causes vacancies like this

This is simply an american myth. I'm not sure where it comes from.

It's standard property owner propaganda to support price gouging.

The original article's graphic of top-affected metro areas (https://www.realtor.com/news/trends/cities-with-most-vacant-..., "Metros with the highest vacancy rates") doesn't look like it has many areas subject to rent control.

This is a common epistemological bias in which you try to fit your narrative into what’s observable rather than building a narrative out of what you observe.

You can verify yourself that cities with rent control have pretty low vacancy rates for example SF and NY are around 2.5%.

And even my claim is not that rent control decreases vacancy. My view is that extremely dense cities with already low vacancies implement rent control as a social measure and usually that doesn’t have a real impact on market dynamics.

> My view is that extremely dense cities with already low vacancies implement rent control as a social measure and usually that doesn’t have a real impact on market dynamics.

How could a portion of the housing stock being held by people paying below-market rates not impact market dynamics?

At the very least:

* People paying far below market rent are disincentivized to ever move, even if they have a long commute, their children move out, etc.

* Landlords are disincentivized to ever renovate or improve rent-controlled units. The improvements can't be captured in increased prices or marketability.

* Developers may constrain supply, since it would be more profitable to develop housing somewhere without rent control, all other things being equal.

* The market rent (paid by newcomers or movers) often increases, owing to constrained supply caused by multiple of the above points.

> Landlords are disincentivized to ever renovate or improve rent-controlled units.

This is already true in low-vacancy housing markets. Besides, renovating units with active tenants is extraordinarily rare. Outside of active units (among common american rent control schemes) units without active unita may be freely repriced.

> Developers may constrain supply, since it would be more profitable to develop housing somewhere without rent control, all other things being equal.

Developers are not landlords. Why would developers care about rent when they aren't renting? Outside of cartel activity this shouldn't happen.

> The market rent (paid by newcomers or movers) often increases, owing to constrained supply caused by multiple of the above points.

Neither supply nor rent control are sufficient to keep rents stable to a given metric. Surely this can't be news to anyone. You need to provide both to competently manage a rental market.

But neither rent control nor supply will remove homelessness. Only decommodification will.

uh funny that you mention sf/nyc, given your first paragraph, as sf in particular is the huge exception to the correlation.

this isn't rent controlled real estate though, 0% of it is

Friendly reminder: these vacancies are caused by lack of demand not rent control. Rent control doesn't apply to these 5.6M vacancies, and anyone with even the most basic common sense would say "huh, I know housing prices are skyrocketing, so why would there be this many vacant properties" and read the article rather than just making up anti-government buzzword bingo.

Additional friendly reminder: every rent control law, no matter how badly written, was instituted in response to price gouging by property owners.

price gouging is another way of saying charging what people are willing to pay.

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