California housing crisis: Why do San Francisco homes go vacant?

The fact that San Francisco had a census-estimated 38,651 vacant homes in 2018 sounds like a surefire recipe for outrage. There’s a housing crisis and thousands of people live on the streets—are we really letting millions of dollars worth of real estate go to waste?

Potentially, yes. But investigating the numbers reveals that there’s no easy answer to that question. Whether vacant homes are a betrayal or just part of the ordinary makeup of a housing market depends greatly on our expectations.

Why does it matter?

Moms 4 Housing, an Oakland-based housing activist group, allege that the number of empty houses in the Bay Area is proof that the homelessness crisis could be resolved simply using existing housing stock.

In fact, Moms 4 Housing claim that the West Oakland house they’re currently occupying has been empty and off the market for years. And indeed, the number of vacant homes in the Bay Area’s most populous cities outstrips the estimated number of homeless residents.

At the same time, NIMBY interests sometimes wield statistics about housing vacancies as supposed evidence that more housing development isn’t needed (although this argument ignores the practical fact that, by definition, vacant homes aren’t helping relieve housing shortages).

The catch is, not all vacancies are created equal.

What is a vacant home?

Some people will tell you that almost all vacant Bay Area homes aren’t vacant at all, and that they’re simply the result of “churn,” which is when homes on the market linger for new buyers or tenants.

This is not true. But “vacant units for rent” and “vacant units for sale” are indeed two of the ways that the U.S. Census defines a vacant home.

Other definitions include “vacant units rented or sold”—i.e., homes with legal tenants or owners that are for some reason empty anyway—and ”occasional use” homes that include timeshares, many Airbnbs, or just second (or third, or more) homes that owners live in less than half the year.

Perhaps most critical of all is the broad “other vacant” category that includes some legitimately fallow units but also a dizzying variety of other uses/non-uses ranging from foreclosures to uninhabitable homes in need of repair to homes being used simply for storage.

Why are so many homes vacant?

Economist Tendayi Kapfidze crunched vacancy numbers nationwide in March at the behest of online lending site Lending Tree. His report concluded that San Francisco, along with San Jose, has one of the lowest vacancy rates in the country.

Kapfidze based this off of 2017 census data, at the time the most recent figures available. Of the approximately 100,000 homes he identified as vacancies, roughly 28,000 were on the market.

Another 20,000 were “occasional use” homes. And more than 37,700 homes fell into the broad, opaque category of “other vacant.”

When sites like Lending Tree say “San Francisco,” they’re talking about the larger San Francisco metro area, which includes San Mateo County and all East Bay counties as well. So what about the city of San Francisco itself?

In 2018, Paige Dow, a master’s student at UC Berkeley—the school’s Terner Center For Housing Innovation singled Dow’s work out as “exceptional student work that connects to our mission and research agenda”—dissected SF-specific vacancies in a report for the San Francisco Planning Department.

Using census data from 2015, Dow noted that seasonal use and “other vacant” were the fastest growing type of home vacancy in SF, with both doubling as a percentage of overall vacancies since 2000.

Dow also says that the number of vacancies due to homes currently listed for sale or for rent is relatively low in SF—a combined total of fewer than 8,000 for that year, out of more than 30,000 empties citywide.

However, Dow also cautions that the reasons for various types of vacancies are varied and difficult to track.

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Courtesy SF Planning

Also in 2018, the San Francisco Planning Department’s “Housing Trends and Need” report found that as recently as 2005, the combined “for sale/rent” metrics made up a plurality of SF vacancies; by 2015 both had declined to only a few thousand units.

Noting the wide growth in “rented or sold, not occupied” homes, planners said that potential explanations for these vacancies include recent deaths and foreclosures, and added, “An increase in major renovations to properties may be part of the cause of the increase in these types of vacancies.”

In 2014, SPUR studied the city’s supply of “non-primary residences.” Of the 9,000 or so “occasional use” homes in the city at the time, SPUR noted, “There has been some public discussion as to whether housing units in San Francisco are being held off the market as investment properties.”

At the time they could only find four such units out of nearly 2,000 surveyed. However, a significant number of condos—13 percent in most buildings, and up to 36 percent in those offering more services and amenities—were homes described as “pieds-à-terre” and unoccupied most of the year.

Value judgements about home vacancies tend to turn on certain points of view. Vacancies from renovations and repairs might be just inevitable hassles, some might argue. Or they could arouse suspicion of rampant gentrification or landlords using renovation as a cover for eviction.

“Occasional use” homes might be a practical reality of free markets—or an indicator of decadent wealth hoarding critical resources. Homes empty from foreclosure might be necessary evils that, unfortunately, help make the American Dream possible—or a symptom of predatory lending and the ghosts of the most recent recession.

One way or the other, a lot of homes are probably going to waste. But few parties will agree on what the nature of the waste actually is.

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