In a freshly minted report by Lending Tree, the online loan marketplace, an in-depth exploration of census data pertaining to the nation’s 50 largest metropolitan areas has unearthed a staggering revelation: a staggering 5.47 million housing units lie dormant, exhibiting an average vacancy rate of 7.22 percent. These vacancies span the spectrum, encompassing owner-occupied residences and rental properties, including single-family dwellings, apartment units, and mobile homes.
Nationally, the count of housing vacancies hovers around 13.9 million. Yet, focusing on the largest urban centers offers a more precise depiction of areas where the demand for housing is palpable. The nationwide tally of unhoused individuals stands at approximately 421,000 (with the nightly total closer to 600,000).
What’s striking is that while the average vacancy rate in metropolitan areas doesn’t deviate significantly from historical trends, the reasons behind these vacancies exhibit a fascinating spectrum from city to city. Factors contributing to the empty housing units include vacation rentals and Airbnb listings, declining property conditions, and disparities between local incomes and housing costs. Alarmingly, only a mere quarter of vacant housing units are actively available for rent, while a mere 8 percent of vacancies result from renovation efforts. The remaining homes, remarkably, remain idle for at least part of the year.
This report, an analysis of the Census’ 2022 American Community Survey data, shatters a commonly held, albeit simplistic, belief regarding housing—that a high vacancy rate invariably correlates with affordability. Jacob Channel, the author of the report, underscores the intricacies involved, asserting that “It’s not so simple to say high vacancy means low home prices or vice versa because there are so many factors that go into play.” The reasons behind a property’s vacancy status significantly impact local housing costs.
Around 26.6 percent of the nation’s vacant homes are actively available for rent. Logically, this category might be seen as the most likely to influence housing affordability, yet, paradoxically, the city with the highest share of “for rent” vacancies, New Orleans, doesn’t enjoy the label of affordability and grapples with a scarcity of 47,000 units suitable for low-income households, as per a recent report. Channel speculates that New Orleans’ low wages and housing disinvestment contribute to this situation.
Another city displaying a noteworthy vacancy rate is Birmingham, Alabama, boasting a 10.72 percent rate. Nonetheless, Birmingham’s affordability struggles are attributed to a medley of factors, including low wages and residential segregation. Recently, the city sought to address its burgeoning homelessness issue by introducing tiny homes.
In Miami, where the vacancy rate hovers at 12.6 percent, the most prevalent reason for vacancies lies in properties being designated for “seasonal, recreational, or occasional use,” a category encompassing vacation homes and Airbnb listings, accounting for 53.3 percent of its 339,000 vacant units. Similarly, Tampa, Florida, records a vacancy rate of 12.15 percent, with 43.8 percent of its 184,000 vacant units being vacation rentals or Airbnb listings.
In some cases, homes remain unoccupied due to exorbitant pricing. Supply chain disruptions during the pandemic led to increased home construction costs, prompting developers to transfer these expenses to renters. In scenarios where these inflated prices fail to find takers, landlords may prefer to bide their time rather than commit to leases at reduced rates.
Channel emphasizes that this issue’s severity varies by region. In San Jose, for instance, home prices reach astronomical heights, but properties typically spend only a few weeks on the market.
A study from Harvard’s Joint Center for Housing Studies last summer underscored a stark reality—despite the United States constructing more homes than it has in half a century, affordable housing units were vanishing faster than they were replaced. The report unveiled that most newly constructed units catered to higher-end markets, while many affordable units were being deregulated and demolished.
In summary, Channel’s findings illuminate the complexity of vacant properties. Some metropolitan areas exhibit high vacancies in specific neighborhoods while maintaining lower rates in others, underscoring the issues of residential segregation and disinvestment. As Channel aptly points out, the study’s core message is clear: “empty” units do not fit a one-size-fits-all mold.
