[bvinc]

I read this entire article but I’m still confused. What exactly is the financial motivation for keeping units empty? And is the concern the fact that the units are empty or are they concerned about the conditions of the empty units?

[Uhhrrr]

It's because of laws against charging the market price, which unsurprisingly has led to perverse outcomes. From the article:

Landlord groups don’t dispute that thousands of rent-regulated apartments are vacant, and blame 2019 changes to state rent laws that severely limit how much they can charge new tenants for after longtime renters move out.

[goda90]

The financial motivation is in keeping rents high. The units are empty because no more people want to pay as much as they are charging. Then it becomes a balancing act. An empty unit might cost you X, but to find a tenant for it might require you to lower rent by Y. If X * # of empty units is less than Y * # of occupied units, then it makes more sense to leave them empty.

[JoshTriplett]

As noted elsewhere in the thread, that simplified model assumes all the units must have the same price.

[Qwertious]

No it doesn't. It assumes some of the units have correlated prices, because units are, to some extent, fungible - if there are no one-bedroom apartments in the price range, then you'll drive up the price of pricier two-bedroom apartments due to the increased competition.

[richbell]

It isn't just a hypothetical. Landlords use companies like RealPage to collude on pricing and keep units vacant.

[JoshTriplett]

I wasn't suggesting that the net result was false, just that the model suggested in the comment I was replying to wasn't accurate, because landlords do sell the same model of apartment to different people at different prices based on when their lease started.

[vinyl7]

You make more money by raising prices higher even when that means pricing some people out. More people will pay the higher price than will get priced out.