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Just Released: The Destruction of Housing Capital: A Preliminary Exploration into Demolitions and Disasters

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Between 1999 and 2001, 1.5 million housing units in
the U.S. were irrevocably lost. A new study
commissioned by HUD's Office of Policy Development and
Research (PD&R) explores the underlying reasons for
this large-scale decimation of the nation's housing
stock.

Fires and natural disasters account for some of these
losses, but owners voluntarily demolished many other
units. "The Destruction of Housing Capital: A
Preliminary Exploration into Demolitions and
Disasters" explores this phenomenon and seeks to
answer three key questions: how much capital is lost
annually, what characteristics of these units may
predict whether or not they'll be lost, and what
motivates owners to destroy housing capital?

The reasons for the loss of housing might be disasters
such as fires or floods, or demolition resulting from
a loss in economic value, physical depreciation and
obsolescence, declining demand for residential
structures, or higher and better use. By analyzing
each national sample of the American Housing Survey
separately from 1985 on, the authors have investigated
which variables contribute to the likelihood of a unit
being demolished. The factors the authors examined in
their analysis fall into three groups:
characteristics, path of the unit, and causal
variables.  In each group, the authors looked at the
following factors:

CHARACTERISTICS
o Region
o Metropolitan status
o Structure type
o Structure size

PATH
o Tenure
o Vacancy Status
o Physical Condition
o Maintenance Effort

CAUSAL VARIABLES
o Age
o Value and Changes in Value
o Neighborhood Quality

Units appear to pass through stages on the way to
demolition. Ones that were rental or vacant had a
higher probability of demolition, as did older units.
However, the characteristics variables were most
important in explaining demolition. The authors found
that demolitions may be more prevalent in non-
metropolitan areas, and more likely for single-family
detached units.

"The Destruction of Housing Capital: A Preliminary
Exploration into Demolitions and Disasters"
is available as a free download from HUD USER at
https://www.huduser.gov/portal/datasets/ahs.html.
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