Housing Shortage and Vacant Lots in America

Former Miami Mayor Francis Suarez recently highlighted that Miami’s consumer price index has surged by 36% since 2019, surpassing even New York City’s costs. He discussed pressing issues such as middle-class housing affordability and the challenging situation in Cuba.

A new study from Zillow suggests that over 300,000 vacant lots could play a significant role in easing the housing shortage in the U.S. Specifically, Zillow reported 300,242 available lots of five acres or less, which made up 17.4% of total sales in June.

If one home were built on each of these lots, the national housing deficit could decrease by 6.3%, reducing it from approximately 4.7 million units to around 4.44 million units. The average lot is about 0.57 acres, with a median asking price of $79,000. Many of these lots may be large enough to accommodate multiple homes, suggesting that the estimates could be on the conservative side.

According to Kara Ng, a senior economist with Zillow, “The more than 300,000 land units currently for sale are the lowest hanging fruit in addressing a 20-year housing shortage.” She noted that loosening zoning regulations, making permitting easier, and improving financing options could decrease the costs and uncertainties related to construction.

Florida leads the states with the most available vacant land, having 42,601 lots for sale, followed by Texas with 40,907, California at 18,508, North Carolina with 14,226, and Georgia at 10,334. Interestingly, vacant land represented the largest segment of condominiums in North Dakota at 45.9%, with South Dakota and Alaska following closely.

The concentration of vacant land tends to be higher in rural areas, which accounted for 25.3% of all properties, while suburban and urban markets represented 13.6% and 9%, respectively.

When it comes to cost, rural land was found to be the least expensive, averaging around $75,000 per acre. In contrast, suburban and urban lands are significantly pricier, with averages of over $181,000 and about $500,000 per acre, respectively.

Zillow also indicated that expanding access to manufactured housing could alleviate the housing shortage as these homes can be assembled more quickly and at lower costs compared to traditional constructions.

Furthermore, Zillow is engaged in a 12-week federal initiative under the U.S. Census Bureau’s Opportunity Project, which aims to enhance access to small mortgage loans in rural areas and to ease the process for buyers wishing to purchase or develop vacant land.