> If you ever owned a vacant home, not only are you still going to have to pay all the usual bills, you'll be dealing with vandalism, squatters, and that undete

> If you ever owned a vacant home, not only are you still going to have to pay all the usual bills, you'll be dealing with vandalism, squatters, and that undetected roof leak that ruins the interior. Maybe! That said, the improvements on the land (namely, the house itself) are only one piece of the puzzle. Housing is usually modeled as an oligopoly, where there are relatively fewer sellers than there are buyers, and this model makes some interesting assumptions. The demand for housing is relatively inelastic, landlords have market power, dwellings are not fungible for seemingly myriad reasons, and the landlord is seeking to maximize profit over occupancy. For smaller landlords, the opportunity cost inherent in leaving a property vacant is often pretty high for the reasons stated here. Paying out obligations, remediating illicit uses, remediating undetected faults in the structure, etc. For these folks, leaving the dwelling vacant is a losing proposition[0]. However, for the more institutional landlords[1] that have a lot of dwellings and, possibly, own most of the rental housing that exists in a particular market? There's an incentive to constrain the supply beyond what, e.g., exclusive-use zoning and arduous design review processes achieve. By the oligopoly model, the fewer of those dwellings they rent out, the more they can command in the price of rent. Diamond cartels, for whatever it's worth, do the same thing. The same model applies. Welcome to market power. Housing is a little more fucked in that there's also an appraisal angle, and for rental properties, the comparatives are based on the expected rent. If rents go up, the appraised value goes up. If rents go down, the appraised value goes down. The appraised value has an outsized effect on the line of credit available to a landlord to continue their investments in real estate in that they have less to offer in terms of collateral on that leverage[2]. -- 0: The only real exception that I can think of is when the housing supply is so constrained that the value of the land itself wildly outstrips the value of the improvements to that land. At that point, the land becomes a speculation vehicle, the house on it be damned. California's Proposition 13 exacerbates this by artificially lowering the opportunity cost of keeping the dwelling vacant or otherwise not redeveloping the land it sits on. 1: Real estate investment trusts count. Chances are good that anyone's retirement fund includes one of these. 2: The real estate developer Donald Trump is a notable exception to this rule. Banks, for reasons that baffle the shit out of me, continued to loan him money. There was no due diligence undertaken for most of the loans he received, and it seemed to be based entirely on vibes.