Why? Because apparently they need some more incentive to keep units occupied. Also, even though a property might be vacant, there’s still imputed rental income there. Its owner is just receiving it in the form of enjoying the unit for himself instead of receiving an actual rent check from a tenant. That imputed rent ought to be taxed like any other income.
I suspect a lot of it is an opportunity-cost fixation. If I rent this unit to you today at $900/month, what happens if someone comes in tomorrow offering $1300 and I have to say “sold out.”
I know with commercial space, the financing and valuation associated with the properties are dependent on specific rent levels, where it’s better for Wall Street to see an empty $4000 unit than a full $3000 one.