Saturday, April 4, 2009

Where Do Tenants Go in a Down Market?

Everyone knows multifamily vacancy rates increase during a recession. Where do these tenants go for housing?

I’ve not seen any studies on this topic, but the obvious explanations are they move back in with families (children back to their parents, parents and grandparents move in with their children), and doubling up (unrelated households combine to share space). And, some drop out of the housing market altogether. Here are some links to stories which explore what’s happening this time around:

Rooms for Rent. From the Seattle Times, In tough times, the rented room is resurgent:

Because most of the arrangements are informal, it's hard to assess just how many people now share their homes with strangers for money. But as the economy plummeted during the past year, mortgage foreclosures soared and layoffs became common, the ads for people seeking roommates increased by more than 70 percent nationwide on

Homeless Shelters. From TimesOnline:

Joan Burke, director of advocacy for the homeless charity Loaves and Fishes, said: “The folks we deal with typically are the working poor. But right now the economy is in such turmoil that it is affecting a new layer of middle-class earners - construction workers, farm labourers, retail workers, restaurant staff.

Shantytowns. From the New York Times, Cities Deal With a Surge in Shanty Towns:

While encampments and street living have always been a part of the landscape in big cities like Los Angeles and New York, these new tent cities have taken root — or grown from smaller enclaves of the homeless as more people lose jobs and housing — in such disparate places as Nashville, Olympia, Wash., and St. Petersburg, Fla.

Squatting. From Slate, Homesteaders in the HoodSquatters are multiplying in the recession—what should cities do?:

As the current recession picks up speed, we are again confronted with the ingredients for a squatting boom. Unemployment is closing in on double digits nationally, and homelessness is on the rise. Between late 2007 and late 2008, the number of families presenting themselves at homeless shelters in New York City increased by 40 percent. In Massachusetts during the same period, the statewide increase was more than 30 percent. At the same time, housing vacancy rates are at all-time highs. According to the Census Bureau, about 15 percent of housing units in the United States were vacant during the last quarter of 2008. That's 19 million homes sitting idle, largely in the hands of banks. The difference between the 1970s and today is that the crisis last time was focused on the urban centers, while this time around the suburbs are the site of the greatest mismatch between people without homes and homes without occupants.

And so, the squatters are squatting.