Every time they run a study it works out to a nominally small percentage, but it doesn’t take a large percentage to eat up the slack in any market. The bigger problem isn’t places left open for tax reasons, it is properties left open for financing reasons. A lot of commercial financing is based on the most recent rents and the refinancing process is where a lot of commercial developers actually make their profits. The rents are often spoken for through various financing structures and maintenance contracts. It is usually worth it to eat a moderately long period of some vacant units to make it to the end of a financing round and cash out at the higher value of the old rent, rather than fill the space at a lower rent and let some other player in the system get the money. Vacancy taxes can work, but only if they grow to an uncapped amount. Any fixed rate will just be bundled into the planned costs and the same vacancy incentives will apply. That would end up falling heaviest on the legendary small landlord and missing the big players.
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