Vacant houses increase while homelessness gets worse

As the band Chicago would say: It's a paradox - full of contradiction.

The percentage of vacant homes in America has reached a new record. Some 2.9% of homes now sit empty. That's because there's more houses in foreclosure, and it's harder to find buyers for homes.

Yet homelessness has also increased. So have housing costs (even relative to wages) and the proliferation of multiple families having to share too small of a space.

What's wrong with this picture? We let the marketplace decide (to borrow the chaosmongers' phrase), and there ends up being a lot of empty houses and a lot of people who need these houses but can't afford them. Sounds to me like the all-knowing marketplace has set the prices a little too high.

It doesn't help when corrupt city governments seize small houses and turn the land over to developers to build mansions and luxury condos nobody can afford to live in. This swindle happens in my area too. There's so many million-dollar riverfront condos sprouting up around here that there's not a chance in hell they're ever going to fill them at the current rate.

It's clear what the problem is: Houses sell for too much. With so much demand for housing, more of the supply should be used up. But it isn't, because the marketplace sets prices artificially high (with collusion from right-wing city governments that actively try to banish low-income residents). In pursuit of profit, the industry is violating the basic economic law of supply and demand. It's no different from if they tried to build houses that floated in midair in defiance of the law of gravity.

(Source: http://news.yahoo.com/s/nm/20080428/us_nm/usa_housing_vacancies_dc)