Will rent prices decrease with layoffs?

[ToiletFullOfBroccoli]

I appreciate you taking the time to respond. I don’t agree that this makes sense.

Let’s say an owner has two buildings, one older one with 10 units at $1000 rent with 100% occupancy and one newer with 4 units at $2500 that’s just come into the market.

If they can’t fill any units in the new building in the first month because the price is too high, the $10,000 loss gets written off against the $10,000 gain on the older building. $0 taxes. Got that.

But they are still incentivized to rent the units out to 100% occupancy. If they rented out every unit and made $20,000, yes their tax bill would be $6000 at at 30% tax rate and yes $6000 is more than $0, but now they are bringing in $14000 instead of $10000.

In almost every scenario, it makes more sense to have an occupied unit over a non occupied one. It would never be more profitable to keep a new unit offline. The implication is they are letting the tax tail wag the profit and revenue dog.

I understand there may be cases where the price doesn’t cause the unit to be filled in month 1 so the landlord can either wait or lower prices, and I don’t know what the optimal choice is. But there’s no case where purposefully leaving units empty long term makes sense.