Download - REALTOR® University Speakers Series Presentation: Long-Term Vacant Housing in the United States
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Long-Term Vacant Housing
in the United States
The analysis and conclusions set forth are those of the author and do not indicate concurrence
by other members of the research staff or the Board of Governors.
Raven Molloy
Federal Reserve Board of Governors
May 20, 2014
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Unintended vacancy reflects an imbalance between supply anddemand in the housing market.
Some amount of vacancy is normal as residents change. And some
houses are intended to be vacant for parts of the year.
Unintended vacancy reflects underutilization of the housing stock.
When structures stand vacant for a long time, there could be adverse
consequences for house prices and neighborhood quality.
In aggregate, the vacancy rate rose sharply during the housing market
contraction and has yet to return to pre-crisis levels.
Introduction
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Q1
8
9
10
11
12
13
14
15
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015year
Gross Vacancy Rate
Aggregate Vacancy Rate
Source. Housing Vacancy Survey.
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Q1
3
4
5
6
7
8
9
10
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015year
Vacancy Rate Excluding Seasonal and Occasionally Occupied Housing
Aggregate Vacancy Rate
Source. Housing Vacancy Survey.
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Goal of this project is to learn more about the vacant stock: What fraction of the aggregate rise in vacancy reflects imbalances
between supply and demand?
What types of locations have large imbalances between supply and
demand?
Measure imbalances between supply and demand using units
that have been vacant for a long time.
Short periods of vacancy could be due to normal turnover of residents.
Long periods of vacancy are more likely to be associated with adverse
effects on the neighborhood.
Introduction
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Aggregate statistics Long-term vacancy = units that have been vacant for an unusually long
period of time
What fraction of the rise in aggregate vacancy is due to long-term
vacancy?
Neighborhood-level statistics
Distribution of long-term vacancy across neighborhoods.
Characteristics of neighborhoods with large shares of long-term vacant
housing.
Agenda
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American Housing Survey Biennial panel dataset of housing units 1985 to 2011
Categorizes 6 reasons for vacancy:
For sale
For rent
Seasonal Usual Residence Elsewhere (URE)
Rented/sold but awaiting occupancy
Other
Length of vacancy
Detailed property characteristics
Exclude seasonal, Usual-Residence-Elsewhere and rented/sold.
Aggregate statistics
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Length of Vacancy, 1985 to 2003
For Rent For Sale Other
Percent of housing units vacant:
Less than 1 month 35.7 13.3 8.8
1 to 2 months 13.3 6.8 4.4
2 to 6 months 26.7 27.9 16.5
6 to 12 months 8.8 16.9 10.9
1 to 2 years 5.6 12.1 13.4
2 years or more 7.4 14.1 42.7
Never occupied 2.6 8.9 3.2
Percent of all vacant housing units 22.8 8.7 16.3
Aggregate statistics
77% of units for sale vacant 12 months or less.
76% of units for rent vacant 6 months or less.
41% of other units vacant 12 months or less.
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Reasons for Other Vacancy in the 2012
Housing Vacancy Survey
Percent of Other
Vacant Stock
Personal/family reasons 19.7
Foreclosure 11.7
Legal proceedings 5.9
Possibly abandoned/to be demolished/condemned 6.7
Intended for year-round occupancy but vacant 6+ months 5.8
Being prepared to rent/sell 6.6
Needs repairs 13.9
Being repaired 9.3
Held for furniture storage 7.4
Held for Specific Use 1.0
Other/Dont know 11.3
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Presence of Negative Physical Characteristics by
Length of Vacancy for Other Vacant Units, 2001-2011
At least 1 At least 3 At least 5
Fraction of housing units vacant:
Less than 3 months 30.8 11.1 6.1
4 to 11 months 41.7 20.9 11.5
1 to 2 years 55.3 29.0 16.4
2 to 3 years 62.7 35.4 21.8
3 to 5 years 74.6 48.1 32.7
5 years or more 77.9 58.3 42.6
Aggregate statistics Owners that intend to leave a property vacant are more likely to maintain it, so
units left vacant unintentionally are more likely to be in a state of disrepair.
Presence of 19 physical characteristics associated with deterioration: Cracks in floors, walls or ceilings
Broken windows
Holes in roof
Incomplete plumbing
No heating equipment
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Long-term Vacant Units Over Time
Aggregate statistics
Define long-term vacancy as:
Units for rent for more than 6 months Units for sale for more than 1 year
Other vacant units that have been vacant for more than 2 years
0
.005
.01
.015
.02
19851987198919911993199519971999200120032005200720092011
Other Vacant > 24 mo. For Sale > 12 mo. For Rent > 6 mo.
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Aggregate statistics
Vacant stock rose from 12.9 million units in 2001 to 17.5 million units
in 2011 Increase = 4.6 million units, of which:
Seasonal/occasionally occupied = 2.0 million units
Long-term vacant = 1.1 million units
For rent < 6 months = 0.7 million units
Other vacant < 2 years = 0.6 million units
For sale < 2 years = 0.2 million units
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Geographic Distribution of Long-Term Vacancy Long-term vacancy is not a large fraction of the housing stock and
accounted for only of the rise in vacancy since 2001.
But implications for some neighborhoods could be substantial if thestock is concentrated in relatively few locations.
Neighborhood-level data from US Postal Service
Postal carriers report an address as vacant if mail has not been collected for atleast 90 days.
For each Census tract, HUD reports total number of vacant residential addressesby length of vacancy
Tract = geographic area with population size between 1,200 and 8,000; optimum size of 4,000.
Define long-term vacancy as vacant 2+ years Sample restrictions:
Exclude tracts with a large share of seasonal housing (2010 Census)
Exclude tracts with a number of housing units or a vacancy rate in 2010 that are not close toestimates in the 2010 Census.
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Geographic Distribution of Long-Term Vacancy
Final USPS sample is 52,000 tracts = roughly of tracts and housing
units in the US In the USPS data, 4 percent of addresses in 2013 had been vacant for
at least 2 years. This fraction is higher than the measure of long-term
vacancy in the American Housing Survey (AHS) because:
Some vacant addresses may be seasonal
AHS excludes housing units that have fallen into a state of severe disrepair.
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Geographic Distribution of Long-Term Vacancy
Most metropolitan areas have a stock of long-term vacant units that
is roughly proportional to the stock of occupied housing units.
Long-
Term
Vacan
tAddresses(
Log
Sca
le)
Occupied Addresses (Log Scale)
10000 100000 1.0e+061.0e+06 5.0e+06
500
1000
5000
10000
25000
50000
100000
50000
100000
300000
Abilene,
Akron, O
Albany,Albany-S
Albuquer
Alexandr
Allentow
Altoona,
Amarillo
Ames, IA
AndersonAnderson
Ann ArboAnniston
Appleton
Athens-C
Atlanta-
Auburn-O
Augusta- Austin-R
Bakersfi
Baltimor
Baton Ro
Battle C
Bay City
Beaumont
Billings
Binghamt
Birmingh
Bismarck
Blacksbu
BloomingBlooming
Boise Ci
Boston-C
Boulder,
Bowling
Bremerto Bridgepo
Buffalo-
BurlingtCanton-M
Cape Gir
Carson C
Casper,
Cedar Ra
ChampaigCharlest
Charlest
Charlott
Chattano
Cheyenne
Chicago-
Chico, C
Cincinna
Clarksvi
Clevelan
Clevelan
College
Colorado
Columbia
Columbia
Columbus
Columbus
Columbus
Corpus CCorvalli
Cumberla
Dallas-F
Dalton,
Danville
Danville
Davenpor
Dayton,
Decatur,
Decatur,
Denver-A
Des Moin
Detroit-
Dothan,Dover, D
Dubuque,
Durham-C
Eau Clai
Elizabet
Elkhart-
Elmira,
El Paso,Erie, PA
Eugene-S
Evansvil
Fairbank
Fargo, NFarmingt
Fayettev
FayettevFlint, M
Florence
Florence
Fond du
Fort Smi
Fort Way
Fresno,Gadsden,
Gainesvi
GainesviGoldsbor
Grand Fo
Grand Ju
Grand Ra
Great Fa
Greeley,
Greensbo
Greenvil
Greenvil
Gulfport
Hagersto
Hanford-
Harrisbu Hartford
Hattiesb
Hickory-
Hinesvil
Holland-
Honolulu
Houma-Ba
Houston-
Huntingt Huntsvil
Idaho Fa
Indianap
Iowa Cit
Ithaca,
Jackson,
Jackson,
Jackson,
Jacksonv
Janesvil
Jefferso
Johnson
JohnstowJonesbor
Joplin,
KalamazoKankakee
Kansas C
Kennewic
Killeen-Kingspor
Knoxvill
Kokomo,
La CrossLafayett
LafayettLake Cha
LancasteLansing-
Laredo,Las Cruc
Las Vega
Lawrence
Lawton,Lebanon,
Lewiston
Lewiston
Lexingto
Lima, OH
Lincoln,
Little R
Logan, U
LongviewLongview
Los Ange
Louisvil
Lubbock,
Lynchbur
Macon, G
Madison,
Manchest
Manhatta
Mankato-
Mansfiel
Medford,
Memphis,
Merced,
Midland,
Milwauke
Minneapo
Missoula
Mobile,
Modesto,
Monroe,
Monroe,
Montgome
Morganto Morristo
Muncie,
Muskegon
Nashvill
New HaveNew Orle
New York
Ocala, F
Odessa,Ogden-Cl
Oklahoma
Olympia,
Omaha-Co
Oshkosh-Owensbor
Oxnard-T
Parkersb
Pascagou
Pensacol
Peoria,
Philadel
Pine Blu
Pittsbur
Pocatell
Portland
Poughkee Providen
Provo-Or
Pueblo,
Racine,
Raleigh-
Rapid Ci
Reading,
Redding,
Reno-Spa
Richmond
Roanoke,
Rocheste
RochesteRockford
Rocky MoRome, GA
Saginaw-
St. Clou
St. Jose
St. Loui
Salem, O
SalisburSan Ange
San Anto
San Dieg
San Fran
San Jose
Santa Ba
Savannah
Scranton
Seattle-
SheboygaSherman-
Shrevepo
Sioux Ci
Sioux FaSouth Be
SpartanbSpokane,
Springfi
Springfi
Springfi
SpringfiSteubenv
Stockton
Sumter,
SyracuseTallahas
Terre Ha
Texarkan
Toledo,
Topeka,Trenton-
Tucson,
Tulsa, O
Tuscaloo
Tyler, T
Valdosta
Vallejo-
Vineland
Virginia
Visalia-
Waco, TX
Warner R
Washingt
WaterlooWausau,Wheeling
Wichita,
Wichita
Winston-
Worceste
Yakima,
York-Han
Youngsto
Yuba Cit
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Geographic Distribution of Long-Term Vacancy
Long-term vacancy varies much more by neighborhood.
Long-Term
Vacan
tAddresse
s(Log
Sca
le)
Occupied Addresses (Log Scale)
500 1000 2500 5000 10000
1
10
100
500
1000
2000
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Geographic Distribution of Long-Term Vacancy
Long-term vacancy varies much more by neighborhood.
Mean Mean + 1 Std. Dev.
0
.0
2
.04
.06
.08
-.02 0 .02 .04 .06 .08 .1 .12 .14 .16 .18 .2Long-Term Vacancy Rate in 2013
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Geographic Distribution of Long-Term Vacancy
Distribution by metropolitan area is much more symmetric.
Mean Mean + 1 Std. Dev.
0
.01
.02
.03
.04
.05
0 .01 .02 .03 .04 .05 .06 .07 .08 .09 .1 .11 .12 .13 .14Long-Term Vacancy Rate in 2013
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Characteristics of Tracts with High LT Vacancy
Characteristics of tracts can shed light on possible causes of long-
term vacancy.
Merge USPS data with tract characteristics from 2008-2012 American
Community Survey and the Census of 1990, 2000, and 2010.
Use principal component analysis to categorize tracts with a high
long-term vacancy rate into groups with similar characteristics.
Analysis generates 4 groups.
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Characteristics of Tracts with High LT Vacancy
Poor Inner-City tracts: Close to metropolitan area center
High density
High % multifamily housing
Low % owner-occupied housing
Low median income; high unemployment and poverty rate; high fraction of
residents without a high school degree
Net population decline 1990-2010
High vacancy rate in 1990
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Characteristics of Tracts with High LT Vacancy
Housing Boom tracts: Large % housing units built 2000-2009
High population growth 1990 to 2010
Far from metropolitan area center
Low density
High % owner-occupied housing
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Characteristics of Tracts with High LT Vacancy
Outlying tracts: Far from metropolitan area center
Large fraction of tracts in rural or micropolitan areas
Low density
% housing units built 2000-2009 not higher than average
Unemployment and poverty rates not that different from the typical tract
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Characteristics of Tracts with High LT Vacancy
Dense Suburban tracts: Average distance to metropolitan area center
Denser than the typical tract with less single-family and owner-occupied housing
Average population growth 1990-2010
Median income, poverty, and unemployment same as the typical tract, but alarger-than-normal fraction of college-educated residents
Vacancy rate in 1990 and 2000 not much higher than in the typical tract
Median house values and rents slightly higher than average.
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Characteristics of Tracts with High Long-Term Vacancy
Four groups have very different characteristics, so there is probablynot a single cause of long-term vacancy.
Poor Inner-City: characteristics of the population suggest that long-
term vacancy is related to poor economic conditions.
Housing boom: vacancy may be partly due to over-building during
the past 10 years.
Dense suburban: population characteristics not consistent with
poverty or urban decline, and not much evidence of overbuildingvacancy may be related to the severe economic recession.
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Characteristics of Tracts with High Long-Term Vacancy
Exact groupings of tracts depend on tract characteristics included,method of analysis, cutoff used to define a high long-term vacancy
rate.
In most cases, analysis identifies a housing boom group, an inner-
city group, and at least one suburban group.
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Where are Tracts with High Long-Term Vacancy?
Note. Map excludes metropolitan areas with fewer than 10 Census tracts.
High Long-Term Vacancy Tracts by Metropolitan Area
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Where are Tracts with High Long-Term Vacancy?
Note. Map excludes metropolitan areas with fewer than 10 Census tracts.
Outlying Tracts by Metropolitan Area
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Where are Tracts with High Long-Term Vacancy?
Note. Map excludes metropolitan areas with fewer than 10 Census tracts.
Dense Suburban Tracts by Metropolitan Area
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Long-term vacancy is not a large fraction of the aggregatehousing stock. Nor is it responsible for much of the increase
in the aggregate vacancy rate since 2001.
But long-term vacancy is concentrated in a small number ofneighborhoods with very high vacancy rates.
These neighborhoods are not concentrated in only a few typesof metropolitan areas.
The characteristics of these neighborhoods not all the same.
Some are locations on the edges of MSAs with a lot of constructionduring the housing boom.
Others are inner-city locations with poor economic fundamentalsi.e.low income and high poverty/unemployment.
And others are in dense suburban areas.
Summary
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In most neighborhoods, it is doubtful that a large stock of
long-term vacant housing is holding back the recovery in
prices or new construction.
But most metropolitan areas have at least a few
neighborhoods with a high long-term vacancy rate.
Because the neighborhoods that have high long-term vacancy
rates have diverse characteristics, the effectiveness of policies
aimed at reducing the long-term vacant stock will depend on
the type of neighborhood and metropolitan area being
considered.
Implications for todays housing market
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Thank You
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Gross Vacancy Rates Over Time
6
8
10
12
14
1950 1960 1970 1980 1990 2000 2010year
HVS AHS
ACS Census
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Year-Round Vacancy Rates Over Time
4
6
8
10
1950 1960 1970 1980 1990 2000 2010year
HVS AHS
ACS Census
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Characteristics of Tracts with High LT Vacancy
Fraction of
High Long-Term
Vacancy Tracts
Poor Inner City 35
Housing Boom 22
Outlying 20
Dense Suburban 18
Other 5