> I doubt there is any significant amount of housing that is just bought and left vacant. Why would you do that?
In high-demand areas property value often increases in value over time. You can literally “buy and hold” property, keeping it empty, doing nothing with it and expecting to sell it for a profit at some point in the future. It’s relatively safe and the rate of return can be significantly greater than inflation.
This ignores property taxes and costs of doing business of course. But there are also situations where you might want a reported tax loss on a profitable asset.
And zoning restrictions are part of the reason why housing prices "always go up." Constrained supply is exactly and precisely what makes housing a profitable investment.
One of many reasons. Supply is also constrained because people are buying it as an investment. It’s a feedback loop.
If I were extremely rich and had a lot of properties to rent in California, I’d look at relaxed zoning laws as an opportunity to buy even more properties.