American Construction

This was hanging from a construction site in Madison, one night while Mr F couldn't sleep so I was taking him for a ride.

In 2004, there were 2,070,000 building permits issued for construction in the United States. That number fell each year by about 1/3, bottoming out in 2009 with 583,000 building permits issued the entire year -- or just over 1/4 of the 2004 peak.

Going back more than half century, the only years in which more than 2,000,000 building permits were issued were 2004 and 2005, and then all the way back to 1972. 1972 was the high-water mark for permits, at 2,218,900 that year.  2009 was the lowest point in that span.

During that time, annually about 1% of all homes, and 6 to 7% of all rental properties, were vacant at any one time. Those numbers stayed pretty constant during the recessions in the 70s, 80s, 90s, and 2000s.  They peaked, of course, during the Great Recession in 08-09, rising to 3% and 10.5%, respectively.  

3% isn't much, it seems, until you remember that there are about 124,600,000 households in the US, so in 2008-2009 there were 3,738,000 vacant houses.

What's striking about all that data is how different 2008-2009 were from prior economic downturns. Building permits stayed steady through all the prior recessions in the past 50 years; housing vacancies stayed steady, too. But in 2008-2009, building permits dropped by 75% from the high just 5 years earlier, while vacancies tripled.

Here's a question: what happened to all those vacant houses?

Here's an answer: most of them are still vacant. 1,500,486 properties were "zombie" properties in 2015: they were not being lived in but were not being actively marketed. They're just there.

Here's another question: where are all those people?

We count the homeless by counting people in January and estimating the numbers from there. In January 2015, 564,000 people were estimated to be homeless on any given night. That, at least, is the official government number put out by the Department of Housing and Urban Development. That may not count all the people; the National Coalition for the Homeless notes that many homeless families "double up" with someone else, living in their house for a while. The Coalition estimates that there are about 1,200,000 children who are homeless.  (That HUD estimate was in a HUD press release touting how much HUD is doing despite decreasing funds to help the homeless.)

Obama, in 2010, started a program to help "end homelessness" by 2017 -- meaning that anyone who ends up homeless will quickly get help and shelter. So far it looks like what they've accomplished is collecting data; while the government claims homelessness dropped as much as 11% in the first five years of the program, it also admits that the methods of counting the homeless are unreliable.

No catchy summations here, or ironic closing remarks. Just some stuff to wonder about.  Above all, wonder about the question, why was the Great Recession so much different than the prior ones? I'm sure it has nothing to with the fact that tax rates are at an all-time low, which because we won't ever consider raising taxes at all has led to decreased funding across the board, thereby concentrating funds in the hands of a relatively small percentage of people.