In the past 50 years, China has built around 500 new cities. The country’s sprawling new urban areas have been instrumental to its economic surge, but it’s not all rosy. In fact, a lot of these new buildings are empty.

By 2021, over 17% of the urban homes built in China since 2001 remained unoccupied. Although official data is lacking, that figure has undoubtedly only grown since 2021. By some estimates, there are between 20 million and 65 million empty houses in China, enough to house entire countries. This is a big problem, both economically and environmentally

A new study published in Nature Communications estimates that these unused homes collectively release 55.81 million tons of carbon dioxide annually — a staggering 6.9% of all emissions from China’s residential sector, or more than countries like Portugal or Mongolia.

Building, but for who?

China’s economic boom and urbanization have been truly impressive, transforming the country into the world’s second-largest economy and lifting hundreds of millions of people out of poverty. Between 2001 and 2020, the country constructed 11.47 billion square meters of urban housing — nearly half of the world’s total over that period. The vast majority of these houses were in cities, as China wanted to bring people from rural areas into big cities.

This also led to a boom in real estate investment which in turn, has had a predictable (but problematic) side effect: people started to see housing more as an asset than a place to live.

We’ve seen this story before. In countries like the United States before the 2008 financial crisis or Japan in the 1980s, speculative real estate investment created massive bubbles that eventually collapsed, leaving economic turmoil in their wake.

However, in the new study, researchers didn’t look at this. Instead, Hefan Zheng and colleagues from Tsinghua University, Beijing, looked at the environmental impact of these houses.

Why unused houses are bad for the environment

Unused homes are not just an economic inefficiency — they are a major environmental liability. The carbon footprint of these empty homes stems from two main sources. The production of cement, steel, and other materials used in these buildings accounts for much of their environmental impact. Each square meter of newly built housing emits hundreds of kilograms of CO₂.

The other source is heat. Even when unoccupied, many of these homes consume energy. In northern China, where central heating systems operate city-wide, many empty homes still receive heating, wasting vast amounts of energy. In 2020, these unused homes produced about as much CO₂ as a mid-sized country.

This is not based on accessible, public data. The researchers developed a deep-learning-based methodology to estimate the volume of unused housing in urban China. They collected data from a major online housing listing platform, analyzing 1.2 million property listings across 56 major cities between 2020 and 2021. Using a supervised deep learning algorithm (ResNet-50), they classified properties as occupied or unused based on indoor photos uploaded by sellers, distinguishing between fully furnished, partially furnished, and completely vacant homes. To refine their estimates, they adjusted for potential biases, such as differences in selling probabilities between occupied and unused homes.

Their findings revealed that by early 2021, 17.4% of all homes built between 2001 and 2018 had never been occupied.

Other countries have unused houses, but China is unusual

China isn’t the only country to have a vacancy crisis for its homes. Many countries struggle with high vacancy rates, for different reasons. The U.S. has an overall housing vacancy rate of around 11-12%, though this includes seasonal homes and temporary vacancies during turnover. Japan has millions of vacant homes due to an aging population and declining demand in rural areas. Meanwhile, several European countries (like Spain and Italy) have large numbers of second homes that remain unoccupied for most of the year.

Yet China’s situation is different because so much of its unused housing was built recently. In contrast to places where vacancy results from demographic decline, China’s problem is a direct consequence of excessive construction. Plus, China needs the houses as its urbanization continues to unfold.

The scale of unused housing in China results from a mix of policy incentives, economic speculation, and urban planning misalignment. In particular, some of the investments seem to have been misguided.

The prevalence of empty homes is far more common in smaller cities. . While Beijing and Shanghai have single-digit vacancy rates, cities like Xi’an and Chongqing see more than a quarter of homes sitting empty.

How this problem could be addressed

In addition to the economic ticking bomb that empty houses pose, the houses also pose an environmental conundrum. If China is serious about decarbonizing its residential sector, reducing unused housing should be a priority.

The most straightforward approach could be a tax. Introducing taxes on empty properties would discourage speculative holding and push owners to rent or sell unoccupied homes, making the entire system more efficient. Some cities could offer incentives to convert unused apartments into affordable housing or public rental units.

This won’t be an easy fix, however. Yet it can be done.

The findings of this research present both a challenge and an opportunity: If China can tackle its unused housing crisis, it could make significant progress toward a more sustainable urban future.

However, if inaction prevails, these ghost homes will continue haunting China’s real estate market and its climate ambitions.

The study was published in Nature.