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 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.
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???
> 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.
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.
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.
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.
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"?
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).
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.
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.
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."
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."
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/
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.
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.
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.
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.
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.
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.
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
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.
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.
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.
"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?
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