From the halls of Congress to City Hall’s across the country, people are talking about housing costs and the un-housed. As a former real estate agent I can tell you that the current problems with housing costs and the lack of housing are complex and multi-faceted. Because there are multiple contributing factors, no one solution will fix it. And it can be fixed. But in my opinion we don’t have a Housing Crisis, we have a Population Problem.
The images in the media of tent encampments or city streets lined with dilapidated RV’s are common of late. Municipalities across the country are struggling to address the issue of the un-housed. In my new home base of Vancouver, Washington they are opening tiny home villages and safe-haven RV parking lots. Places where people can live temporarily, with available bathroom, showers and access to public assistance and counseling services. In places like Florida, the state legislature enacted a state wide ban on public camping. As though by making it illegal to be homeless will somehow make the problem go away.
Housing Crisis Myth
The popular cause of homelessness espoused by many is a Housing Crisis. That we don’t have enough housing. Let me start by clarifying that I am a Liberal Democrat. That said, I don’t believe that across this country we do not have enough housing for everyone who wants to be housed. The lack of desire to be housed is a separate issue that I won’t address here. I believe that nation wide we have enough housing, I’ve seen it.
During World War Two, people moved from rural areas to the cities to support the war effort working in factories and shipyards. Homes were sub-divided to create rentable space for these new arrivals. The end of the war and the GI Bill, which sought to help our returning veterans own their own home, saw a surge of new sub-urban homes. By the 1950’s big cities started to see residents moving away to these new developments.
The 2008 recession accelerated this flight away from some big cities. The decline in automobile sales hit hard places like Detroit, Michigan. People moved out of Motor City in search of work. With no one to buy their vacant homes, owners often simply abandoned their properties. Since 2011, the city has foreclosed over 100,000 homes, 1-in-4, because of unpaid property taxes. Detroit saw their population drop from 1.4 million to 700,000. In 2011 the city of Baltimore, Maryland, had over 100,000 vacant properties. Baltimore once made up 40% of the states population where today it comprises only 10%.
Abandoned America
As an early retiree, my wife and I travel the country in an RV half the year, spending the warmer months in Vancouver playing with our granddaughter. It had been a few years since we’d traveled, this past October started a 7 month sojourn. Starting in Washington and down thru Oregon and California, then over to Arizona, New Mexico, and finally Amarillo, Texas. From here we turned West and are heading through Utah and Nevada on our way home.
As we travel from place to place, town to city to town, I am surprised by the number of vacant homes I see. Hundreds, even thousands of them, and those are just the ones visible from the highway. Turning down side roads and along the frontage streets in little towns you find more. Just this past week as we drove into Portales, New Mexico I saw not only dozens of vacant houses but also several boarded up motels, each with dozens of rooms. Why could these not be transformed into transitional housing I thought. And yet the other thing that I noticed driving through these cities and towns was a lack of homeless encampments. And perhaps that is the point.
Location, Location, Location
There is an old adage in real estate, that when buying or selling property the three most important considerations are the location. In 2000 when my wife and I were house shopping we had a list of communities that we were specifically looking at. Ultimately selecting a home in our desired neighborhood with the desired school. It was the ‘location’ that sold it.
Both Detroit and Baltimore have tried with little success to sell these properties. In Detroit, they are trying to sell them for as little as $500. Baltimore is now trying to sell homes for just $1 for people who fix them up and live there for 5 years. Both cities have demolished tens of thousands of homes each in the last 15 years. There are still 68,000 vacant properties in Detroit, 15,000 in Baltimore. Demolishing these homes has been a huge expense but there is also a cost to the city to maintain these properties, in 2023 Baltimore spent over $100 million on vacant buildings and lots.
So if we have hundreds of thousands of vacant properties nation wide, why then do we have so many unhoused people? One piece of the answer is simply ‘location.’ Driving around Portland, Oregon, I often see tent encampments along the highways. With a vacancy rate of 1.7%, the city is in need of more housing. Yet in the town of Portales, NM, where we are staying this week, their rental vacancy rate is 9.6%. And after a week here have seen no homeless encampments. No downtown streets lined with dilapidated RV’s.
With a median rent of $763, Portales, NM, is 60% cheaper than Portland. Yet even with low rent and a 9.6% vacancy rate, there isn’t a line of people trying to move to Portales. So maybe our problem isn’t a housing crisis, but simply that we have too many people moving to certain cities.
Finding Solutions
As I said, the problems regarding the unhoused are varied as will be the solutions. You can’t force the unhoused to move to cities with vacant properties like Baltimore or Detroit, at least until the Republicans come to power. Though it would be cheaper than Trump’s plan to build internment camps for homeless people.
Converting empty office buildings into apartments is another solution, but that is expensive and time consuming. In Los Angeles the 55 story Ocean Plaza building has sat empty since 2019 when the developer abandoned it. It could be converted into hundreds of low-income apartments, but would take several years and hundreds of millions of dollars to complete. California has also implemented a new short-sighted program that abolishes local ordinances preventing the construction of additional units on residential properties or which previously prevented garage conversions to rentable space.
Eliminating short-term rentals in the U.S. would put some 2.25 million homes back on the market for sale or long term rental. Many local communities have tried to regulate short term rentals, but there is only so much that the government can do because property owners have rights. In Arizona, the Republican controlled legislature passed a law which prevents local communities from regulating or restricting short-term rentals. So much for the Republican idea of ‘limited government.’
Remote workers could be incentivized to move to towns with vacant homes and a lower cost of living. Cities like Tulsa, Oklahoma, even started paying people $10,000 to move there. The problem of surplus housing in remote areas is not just an American problem. Remote villages on the Italian island of Sicily have been selling abandoned homes for as little as $1 to get people to move there. Japan is selling abandoned homes for $500 to get people to move into remote villages. In China and Malaysia they have brand new cities that no one wants to live in.
In my view, the perceived national ‘housing crisis’ is really a regional population problem. Housing needs to be where people ‘want’ to be. Either we need to find a way to encourage people to move to where the housing is, or we need more housing where the people want to be.