Empty homes and price crisis: how does the market react?

A newly finished residential tower at night. Forty floors, hundreds of windows, three lights on. Ten minutes away, one family has spent months on a public housing waiting list and another shares a flat with two strangers because the rent is out of reach. The buildings exist. They are built, registered and connected to the grid. Nobody simply lives inside them. That image contradicts everything we are told about the housing problem, which is almost always explained as a shortage of supply. The question holding this video together is simple and disconcerting. Why are there homes without people and people without homes at the same time? Start with the mechanism, which is financial before it is urban. A dwelling can generate a return in two ways. The first is renting it out and collecting a monthly income. The second is simply holding it while its price rises. If expected appreciation beats what renting would yield, keeping a flat empty stops being carelessness and becomes a strategy. A tenant means wear, management, taxes, regulation and less liquidity when selling. An empty flat sells tomorrow and shows immaculately. Put differently: for part of the stock, housing is not a service being provided, but a store of value being kept. From this follows the first uncomfortable answer to another common question. Why does building more not automatically lower prices? For three concrete reasons. First, new construction almost always enters at the top of the market, because expensive land forces expensive product. Second, filtering, the process by which a dwelling ages and cheapens until it reaches middle incomes, takes decades rather than electoral terms. Third, and decisively: if part of demand is investment demand, building more does not satisfy it, it feeds it. Every new development is also a new asset available to capital looking for somewhere to sit. There is evidence about what happens when a city tries to correct this. Vancouver applied a specific tax on unoccupied housing. The results are clear and instructive. The vacancy rate fell from around one percent to roughly half that, the number of empty flats dropped below a thousand for the first time, and the tax raised close to two hundred million earmarked for social housing. An independent academic study estimated several thousand dwellings returned to the market that would otherwise have stayed shut. But the same study found something worth underlining: average rents did not fall. Availability improved and affordability did not. They are two different problems. Now look at the Spanish figures, because they explain the paradox better than any theory. The latest census identified around three million eight hundred thousand vacant dwellings, roughly fourteen percent of the total stock, plus another two and a half million in occasional use. It sounds like an obvious solution: there are homes to spare. And here comes the counterargument, probably the most important figure in this whole video. Around forty five percent of those vacant homes sit in municipalities of fewer than ten thousand inhabitants, where barely a fifth of the population lives. In cities above two hundred and fifty thousand inhabitants, home to almost a quarter of the country, only about a tenth of the total is found. In other words, Spanish vacancy is mostly a symptom of depopulation, not of hoarding. A shuttered flat in a village of three hundred people does not compete with a flat in a pressured district of a major city, nor can it house someone who works there. Anyone claiming that mobilising the vacant stock would solve the crisis is adding apples to oranges. And a consequence follows that often unsettles the critical position: in genuinely pressured areas, vacancy is low and the shortage of supply is a real problem. Building does matter. Building in the right place matters even more. It can still be argued that the counterargument does not close the debate either. That vacancy concentrates far away does not remove the fact that, inside pressured cities, a growing share of the stock has been withdrawn from permanent residential use. It is not always empty: it is let by the season, handed to visitors, reserved for occasional use, or bought by companies holding it in portfolio. The practical result is identical. That housing exists physically and is unavailable to someone who needs to register an address, enrol a child in school and sign a multi year contract. The scarcity in those districts is not of buildings. It is of accessible housing on stable terms. The editorial opinion is this, and I flag it as such. The mistake is treating housing as one market with one price. In reality two logics coexist: the household seeking shelter and the capital seeking yield and refuge. As long as the second can outbid the first for the same square metre, no rate of construction will ever catch up. That is why the policies that wor