alt Hacker NewsThere's a couple of "ifs" there and the scenario seems implausible. If I look at the prime real estate in a city it tends to be a lot of skyscrapers rather than very large homes (with occasional exceptions like say a Buckingham Palace). But it looks like the economic equilibrium is lots of cheaper apartments rather than large homes for rich people.
> ... and even investment properties occupied by nobody ...
Not much of an investment. Something is wrong if that is happening, probably manifesting as a lack of supply. Otherwise what is the point of an "asset" that doesn't generate income, degrades over time and could easily be rented out at a profit rather than sitting unused?
Whatever scenario there is where it makes sense to have an empty property, assuming a sane policy backdrop, it'd always be better for the owner do what they were going to do anyway but also rent it out.
People don't want to rent those homes out because once you're doing so it's difficult to evict a long-term tenant. You just lose out a lot on flexibility - even if you try and manage that risk by leasing out housing e.g. on a yearly basis, landlord-tenant law often overrides that since there are strong ethical reasons for not evicting someone who has since come to treat that rental space as their home.
Short term rentals are better on that score: no one sensible forms a long-term expectation that they're going to live in an Airbnb that they've rented for a few days. (If you think short-term rentals are "bad" for the long-term market or have negative side-effects on the neighborhood, then tax them to manage that tradeoff. But banning them altogether is unconscionable and just leads to houses sitting empty and unused.)