[alvah]

-can't get permission to build due to massive amounts of red and green tape

-the only economically sensible option is to let the building fall into disrepair bad enough that the government lets you demolish

-governments close this "loophole" by seizing your property

and the problem is "the owners behave this way"? FMD.

[vkou]

It's entirely possible that there's non-loophole ways to solve this problem, but when a lot of money is at stake, why would landlords (or anyone else) make effort to be compliant with the spirit of the law, when they can cut corners, and abuse the letter of the law?

[pjmlp]

Well, the owners still have a couple of strikes before the city hall decides to fully take action.