Comment by bgwalter
2 days ago
They leave it empty (that actually happens a lot, especially with foreign investors) or convert it to their 100th AirBnB.
2 days ago
They leave it empty (that actually happens a lot, especially with foreign investors) or convert it to their 100th AirBnB.
Empty properties barely exist as a percentage of total housing supply in high cost of living areas in the US. You’re looking at no more than a few tenths of of a percentage point of NYC’s more than 4 million units.
Examining empty ownership as a percentage of overall housing in America, which has tens of millions of units, is not a very helpful way of categorizing a highly localized and locally felt phenomenon.
The real effect of this type of ownership is that it distorts the high end of the market and the effects ripple downstream. They force cash to move elsewhere in search of housing, which inflates those markets, so then those who could afford those markets move elsewhere, etc.
Despite all of the data that gets lobbed around on this topic, we don’t seem to have a very good mental model for how small changes in one segment of the market explode into the others and cascade dramatically.
It’s just not very meaningful to examine this as a percentage of units.
> Examining empty ownership as a percentage of overall housing in America, which has tens of millions of units, is not a very helpful way of categorizing a highly localized and locally felt phenomenon.
That’s why I specified NYC. There’s actually very good economic work on how the housing market is segmented and how demand and supply spill over. There’s some good studies from the NYU’s Furman Center on the topic.
> It’s just not very meaningful to examine this as a percentage of units.
Warehoused condos make up a small fraction of high cost housing in NYC and exist almost solely in a handful of blocks in Manhattan. They have virtually no effect on the broader luxury market, and take up very little land as they are mostly crammed into a small number of buildings.
> a few tenths of a percentage point of NYC
Feb 2024 (last year there's data, I think) was a record low and it was 1.4% empty, according to NYC[1].
But I don't really know the methodology, and according to other nyc gov data it's surprising, since we still haven't recovered our population from COVID[2].
The first statistic (housing pressure) is based on population growth, but the NYC population statistics suggest still meaningful population loss since 2020.
I have seen articles in the past that suggest that apartment vacancy rates in NYC are self-reported and misleading at best, but I don't really understand how that would work and I can't find any sources on that now.
It's also my understanding that some classes of landlords can mark empty apartments as income losses, basically or partially making up for the loss of revenue in tax rebates. But that's also not something I understand well, just something I have seen asserted.
[1]: https://www.nyc.gov/site/hpd/news/007-24/new-york-city-s-vac... [2]: https://s-media.nyc.gov/agencies/dcp/assets/files/pdf/data-t...
1.4% vacancy in a housing market is extraordinarily low. Remember: there is structurally always some material amount of vacancy, because people vacate housing units well before new people move into them. This, by the way, is a stat whose interpretation you can just look up. Real estate people use it as a benchmark.
2 replies →
Vacancy doesn’t mean units held empty as either a parking place for cash or held off the market. Vacancy happens when you’re painting and repairing between rentals. Vacancy happens when there’s a renovation. Things like that are normal and not nefarious. Have 1.4% vacancy rate means there is essentially no usable housing for rent.
I was talking about the myth that there are tons of apartments held by rich people who don’t use them for anything.
3 replies →
Yes, we get it, they buy the unit and leave it empty. What happens next.