We live in a ghost town. I, at least, already live on a ghost block.
In the last two to three years, three of the 20 houses on my block (counting both sides of the street) have become "ghosts." At that rate, my entire block will be ghost in 6.8 years.
There's no reason to believe my block is special, so I project Palo Alto will be a ghost town within seven years. Global warming and rising seas are going to flood the town? No worries, no one will be here when it comes!
A "ghost house," you may know, is one that is typically bought for far over the asking price by presumably wealthy buyers who then do not live in the house but leave it empty, albeit well-cared for. Not to dance around the subject, the buyers are often from China. (See tinyurl.com/PAWghost2015.)
Now, before I'm accused of racism, let me just say that I am not complaining about the presence of anyone. I am complaining about their absence: Please come live with us! We're really pretty nice people if you'd get to know us!
Maybe we should all feel flattered that we live in a place desirable enough to be a "second home" destination. After all, just what is my beef with the ghosts? They pay taxes. They're probably driving up the eventual resale value of my home. They appear to keep up the properties, even if they do seem to be using an unconscionable amount of water on their grass (and, often, the lights are on). I don't envy their wealth. I'm not convinced by those who say the houses might be a security problem, attracting burglars.
So just what is it about them? I think it's this: There's no denying that their emptiness makes a social hole in our neighborhood. For years I've organized the block party for our street; I remember the people who used to live in those houses. They had children; they had lives there.
Perhaps it's because I'm aging and being nostalgic, but it's the emptiness itself that assaults my sense of community. The architect Le Corbusier famously said that a house is "a machine for living" -- it is designed and built to be lived in. Not living in it perverts its purpose, its reason for being. And no house truly stands alone. The organic whole of a town such as Palo Alto is composed of its pieces. If you empty out enough of the pieces, the whole will be hollow.
I guess I can't really blame the ghosts. If I were in their shoes I would probably buy a house in Palo Alto, too (wait, I did buy a house in Palo Alto!). And I can hear the mercenary real estate agents now: It's a free market; get over it. But free markets do have unpredictable and sometimes undesirable consequences.
In fact, a global real estate market is producing an economic phenomenon of staggering scale. Your local ghost house is a drop in a flood of an estimated annual (in 2014 and 2015) one-half trillion (yes, 500 billion) dollars of mostly cash foreign-capital flow into the U.S. real estate market, with Chinese spending one-third to one-half of that amount. (See tinyurl.com/housing-irvine09-15.) According to Juwai.com, a Hong Kong-based property search engine, California is the most popular U.S. destination for these buyers.
The result in some local markets is price inflation and narrowing of market access such that one has to wonder if the term "market" even applies any longer. It's more like a trading club with relatively few members.
And this is not just a U.S. phenomenon. Credit Suisse reports that a surge of foreign buyers in Australia has caused housing prices to become "decoupled" from local income levels to the extent that "a generation of Australians are being priced out of the property market. Many face a lifetime of renting."
So what, if anything, can be done?
Australia has a raft of old and newly proposed laws regarding foreign buyers. One of them prohibits "temporary residents" from buying "established properties" for investment only and requires them to use the properties "as their residence" in Australia. This apparently doesn't apply to new construction, or to "established properties" that are deemed uninhabitable and can be demolished, so it's unclear just how much the law is preventing "ghosts." But as far as I can tell, the three ghost houses on my block are "established properties" under such a law and thus would have to be lived in. (See tinyurl.com/AFIP-379.)
This is obviously a touchy issue, involving nationality/race, free market capitalism, and American ideals such as offering opportunity to immigrants. But it's conceivable that "ghost" property could reach a level at which our community really would begin to feel hollowed out. Again, I'm not being a Trump-ian nativist here -- I want the home buyers to live in my neighborhood. So if we could craft a law that would pass constitutional muster and make that happen, why not discuss it?
But if law can't or won't make that happen, what's the alternative? Maybe the best we can hope for is "friendly ghosts." Sellers and real estate agents should encourage buyers to meet the neighbors and be honest about their intentions. They should introduce their "house watcher" if there is one; make it known how often they will live in the house, and what their long-term plan is; exchange contact information. If the buyers are going to live in the house part time, neighbors should take the opportunity when they have it to get to know the buyers as well as they can. None of this really fills the "social hole" that a ghost house makes, but it would be a start.