While reading someone else’s work, I recently ran across an article by David Cay Johnston of the New York Times, claiming that overseas oligarchs turning apartments all over the world into unused “ghost apartments”. In this article, Johnston writes: “In Paris, for instance, one apartment in four sits empty most of the time.”
This claim struck me as so astonishing that as to be implausible, for the simple reason that in other “global” cities vacancy rates are much lower. For example, in New York only 9 percent of housing units are vacant, and most of those units are currently for sale or rent.* Even this vacancy level should not be particularly astonishing, since cheaper American cities often have higher vacancy rates. For example, Houston has an 11 percent vacancy rate, and Atlanta has an 18 percent vacancy rate.
After googling “one in four paris apartments vacant” I found an article claiming that 26 percent of apartments in four Paris arrondisements (neighborhoods) is vacant- a much narrower claim, comparable to an assertion that one in four midtown Manhattan apartments is vacant. One would think that a journalist as distinguished as Johnston would know the difference between “Paris” and “some parts of Paris.”
A more recent article claims that only 7.5 percent of Paris apartments are vacant- a lower vacancy rate than that of New York. Moreover, we don’t know what the local media means by “vacant.” Does this category limited to apartments that are unused 365 days a year? What about units that are rented out now and then through Airbnb? Or units that are currently being advertised for rent or sale? I suspect that the true number of “ghost apartments” is far lower than 7.5 percent, since in London (another “global city”) less than 1 percent of housing units are entirely empty.
Why do I care about how many oligarchs own unused apartments in Paris? The “ghost apartment” claim is a common theme of NIMBY activists. Anti-housing commentators argue that new infill will always be bought by foreign oligarchs who will not actually use the apartments; as a result, new housing will never lower housing prices. Of course, this claim contradicts other NIMBY arguments (such as that new housing is terrible because it congests the highways and/or subways, or leads to gentrification by bringing nonpoor people into a poor area).
*For detailed statistics, go to the Census American Factfinder site, and click the “Housing” box for New York City.