Even as housing prices have risen over recent decades, the United States has built substantially fewer homes. In some metropolitan areas, this has resulted in persistently low vacancy rates, making it difficult for many families to find a place to live.
Housing availability varies not only between metropolitan areas but also within them. Even metropolitan areas with abundant housing may have some very in-demand neighborhoods and others with little demand.
To better understand these patterns, we examine the neighborhood distribution of vacancy rates across US metropolitan areas. We explore not only where vacancy is most common, but also how close vacant areas are to one another.
This neighborhood-level view can help policymakers better understand local housing affordability concerns and determine where to increase housing supply, where to improve neighborhood conditions, or both.
Neighborhood vacancy levels vary widely within metropolitan areas
Using census tract data from 1990 through 2020, we examined housing supply and demand in the 107 US metropolitan areas with populations above 500,000 in 2020. Focusing on tracts in census-classified urban areas in 2020, we combined owner and rental vacancy rates—including dwellings that the US Census Bureau reported as vacant and for rent, for sale, or sold or rented and not occupied—into a vacancy-balance index and classified metropolitan areas and tracts as relatively tight (needing more homes to meet demand), balanced, or in surplus (having more than enough homes).
Our analysis confirms that broader patterns often hide significant variation within metro areas. The Birmingham, Alabama; Houston, Texas; and Youngstown, Ohio, metropolitan areas all have plentiful available housing, but more than 20 percent of neighborhoods have low vacancy rates, making it hard for new residents to find housing.
The reverse is also true. Boise, Idaho; Portland, Maine; Portland, Oregon; and San Francisco each have very low vacancy rates across their respective metropolitan areas, but more than 10 percent of neighborhoods have high vacancy rates where more housing is readily available.
The location of vacant housing differs within and among metropolitan areas
Next, we calculated neighborhood vacancy distribution within metro areas. To avoid skewing our results, we included only tracts within 10 kilometers of the center of each metropolitan area.
We found vacancy rates are concentrated differently across regions. In the Syracuse, New York, metro area, high vacancy rates cluster in the center of the city, and its suburbs have low rates. On the other hand, high-vacancy neighborhoods in the Seattle metropolitan area are more dispersed.
Source: Authors’ analysis of 2020 US Census Bureau data.
Notes: To account for differences in the mix of rental and owner housing, we calculate a vacancy balance indicator. It compares actual vacancy with benchmarks of 7 percent for rentals and 1.5 percent for owner housing. We don’t include dwellings classified as second homes, farmworker housing, or vacant for some other reason. Values above the benchmark indicate surplus housing; values below it indicate a tight market. Low vacancy tracts have vacancy rates at least 20 percent below that balance; high vacancy tracts have vacancy rates at least 20 percent above that balance.
Nationwide, high-vacancy neighborhoods are more clustered in metropolitan areas in Rust Belt and southeastern parts of the country and less clustered in the Northeast and on the West Coast. Greater clustering of these neighborhoods could signal more concentrated neighborhood disinvestment, while low-vacancy neighborhoods generally show the opposite.
We also measured the typical distance between low- and high-vacancy neighborhoods. Certain large metropolitan areas like Chicago, Miami, and New York City have relatively shorter distances between neighborhood types, while areas like Birmingham, Boston, and Minneapolis have more separation between neighborhood types.
This measure shows how easily housing demand can shift across neighborhoods. When low- and high-vacancy neighborhoods are close to each other, demand in high-demand areas could spill into nearby neighborhoods with more available housing.
Source: Authors’ analysis of 2020 US Census Bureau data.
Notes: To account for differences in the mix of rental and owner housing, we calculate a vacancy balance indicator. It compares actual vacancy with benchmarks of 7 percent for rentals and 1.5 percent for owner housing. We don’t include dwellings classified as second homes, farmworker housing, or vacant for some other reason. Values above the benchmark indicate surplus housing; values below it indicate a tight market. Low-vacancy tracts have vacancy rates at least 20 percent below that balance; high-vacancy tracts have vacancy rates at least 20 percent above that balance. Clustering is determined by calculating the average distance between each tract and the closest five other applicable tracts, as appropriate (i.e., a low-vacancy tract’s distance to the closest five other low-vacancy tracts is the input for our low-vacancy concentration index), weighted by number of housing units in 2020. For each metropolitan area, we examine only tracts within 10 kilometers of the “low-vacancy heart”: a contiguous cluster of low-vacancy tracts (vac_balance < 0.9), linked using a 5-kilometer centroid search radius, large enough to contain at least eight tracts or 3 percent of the metropolitan area’s tracts, whichever is greater. Map shows only the 107 largest metropolitan areas.
Interestingly, some metropolitan areas, including areas south of Central Park in Manhattan and downtown Miami, had high vacancy rates in neighborhoods with high housing values. Because our vacancy measure excludes homes held for seasonal or occasional use and other units unavailable for sale or rent, this pattern cannot simply be attributed to wealthy owners leaving second homes unoccupied.
Instead, it may reflect the special dynamics of high-cost housing markets. Units may sit vacant while owners or managers find buyers or renters, new units could be awaiting occupants, or luxury prices may limit households that can afford them. In these cases, high housing values and high market vacancy are not necessarily contradictory. The former indicates strong demand for the location, while the latter may indicate friction or excess inventory in particular segments of the local housing market.
Policy responses should reflect local vacancy patterns
Vacancy is only one measure of housing availability, and it does not always directly affect housing affordability. But it can help policymakers understand the housing challenges different metro areas and neighborhoods face and then tailor solutions accordingly.
Metropolitan areas like Seattle often have low-vacancy neighborhoods surrounded by pockets of high vacancy that may attract developers, investment, and land speculation. As demand increases in these neighborhoods, they will likely see an influx of residents over time, rising housing costs, and increased gentrification and displacement. To help current residents stay in place and benefit from neighborhood change, policymakers, planners, and advocates can consider strategies like public and nonprofit housing ownership and policies that encourage housing development, including upzoning, limitations on unit splits, and public direct investment. Combined approaches are often more effective than any policy alone.
Metropolitan areas like Syracuse, where high- and low-vacancy neighborhoods are far from one another, face different challenges. Persistent population and housing loss because of disinvestment discourage people from moving in or staying. In these cases, state and local policymakers should consider investing in new amenities like parks or cultural spaces to improve quality of life for existing residents and to attract new ones.
Though Syracuse and similar metropolitan areas may not need much new housing overall, their low-vacancy neighborhoods often provide access to excellent public services and amenities that should be available to lower-income people, who are often segregated into neighborhoods without those benefits. After all, the Fair Housing Act remains in effect, providing that every community has a responsibility to “affirmatively further fair housing.” Zoning reforms and public investment—particularly affordable rental housing—can help reduce spatial inequality and advance fair housing goals, even if they aren’t important strategies for increasing metropolitan housing supply.
