This doesn't make any sense. The value of a lease on these properties vastly outweighs any property tax deduction.
But, frankly, even if I'm wrong about that, the point of my original comment is that the OPs claims make no sense, because, again, the implication that they can come out better under the current regulations by keeping the units empty is incorrect. It is arithmetically wrong.
They would make much more money if they leased the units.
So whatever explains these empty storefronts, it isn't this:
> Fast forward to today, all of those stores and more are shuttered... the rent is still too damn high... and the absentee landlords that own these buildings are actually rewarded with property tax benefits for keeping them EMPTY!
Unless what OP means by "[they're] rewarded with property tax benefits for keeping them EMPTY!" is that they lose money relative to their other options.
I don't know why this explanation appeals to so many people; it doesn't survive a second of scrutiny.
the problem happens when an absentee landlord owns a dozen buildings on main street. if a third of their properties are empty and they lower the rent to the point where people will occupy them, it drives down the rent for the other two thirds of their portfolio. if they keep some properties empty to hold the rents artifically high, and they don't have to pay property taxes and management fees on the vacant ones, they can just hold the properties for free while the land value appreciates.
Ergo, lower rent is not always worth more than no rent, even all else excluded.
Example: you rent your property to a tenant for $100 / month, who does $5,000 worth of damage to the property, and declares bankruptcy when you sue them for recovery, in addition to the time you spent installing them + evicting them + dealing with recovery.
Keeping properties off the market for years at a time in order to mitigate the risk of actually having tenants is not a very good plan.
If lowering the rent by 10k a year lowers the value of the building by 100k, the building owner may have to add 25k that they don't have to keep the building from falling into default. If you have a completely empty building and you accept a lower rent in one of ten units, you could need to put down 250k it of you have many building under one loan they may want millions because of how it changes the loan valuations.
People don’t keep units empty for tax breaks. That’s absurd.
Property tax abatement depends on local laws, correct?
On the other hand, I assume you can claim the usual boatload of expenses (e.g. mortgage interest, upkeep, etc.) against vacant properties, thus generating a paper loss to offset income generated by other properties or activities.
The real lynchpin appears to be: vacant properties are allowed to contribute tax losses to their owner(s).
Whereas in reality, what we probably want is something more akin to "If you have not fully utilized (i.e. leased for a percentage of the timespan) a property in the last X months, you can no longer claim any tax expenses for value-based (i.e. mortgage, financing, property taxes) components of the property. You can still claim expenses related to the improvement of the property (e.g. maintenance, etc.)".