Houses without people and people without houses: an Italian paradox

According to basic economics, when vacancy rates rise, house prices should decrease and vice versa, responding to supply and demand mechanisms. However, previous studies (Hoekstra & Vakili-Zad, 2011; Vakili-Zad & Hoekstra, 2011) have observed that, before the economic crisis, this was not the case in countries like Spain and Malta. It has been questioned whether this paradox is a Mediterranean phenomenon or simply the result of isolated cases of malfunctioning housing market. The objective of this paper is to contribute to this discussion by reviewing the pre-crisis market of a third case study: Italy. As in other Southern European countries, vacant housing is a serious problem in Italy, both in major cities and in rural areas. A welfare regime perspective will be used to analyze the paradox and methodological issues with regard to the definition and measurements of vacancy will be addressed. Moreover, the paper will attempt to explore the consequences of the high Italian vacancy rate within a context of severe housing shortages and affordability problems, providing recommendations for further research. We argue that a better understanding of the characteristics and implications of vacancy in different contexts is necessary in order to implement sustainable housing and planning policies.