What you are advocating for is the system that has gotten us to the point where nobody can afford housing.
You let rich interests create a situation where they make more and more money for doing nothing. In this case, sitting on downtown real estate. They use the money to manipulate the system to tilt the economy more and more in their favor. They kill off attempts to introduce rail. They fight against increasing capacity for housing or office space, because when demand goes up and supply stays the same they get higher rent for doing literally nothing but continue to own the same properties. They bribe politicians to force you back into the office downtown for no reason.
This is literally called rent-seeking https://en.wikipedia.org/wiki/Rent-seeking Landlords have been doing this for thousands of years to the point it is a fundamental economic principle.
Then, when they get in trouble, and they might lose some money, you have to bail them out or they will ruin your cities. They are going to ruin the cities either way. If you bail them out they will take the money and then do none of the things they were supposed to do in exchange. They are only going to do whatever puts the most money in their pocket, and they play a long game.
Here is a counter proposal:
- Tax any vacant building at a rate high enough that any owner will be forced to put the building into use or sell it to someone who will. This applies both to buildings that are 'abandoned' as well as just sitting empty due to lack of tenants.
- Tie property tax rates directly to the rate of supply. Whenever an action is taken that artificially increases property values, increase the rates to offset that increase. If the planning commission kills a new apartment building that would increase the number of beds in part of the city by 1%, increase tax rates by 1% (1% of the current rate). This will penalize existing landlords (and homeowners) for rent-seeking and NIMBY. This can be done at the state level and the funds can be earmarked for low income housing and job programs, or parks.
- Offer tax incentives for things that lower property values but increase quality of life. These would include housing programs, railroads and stations, high density housing, etc. This would help balance out the rent seeking behavior of landlords and de-align their group interests. For example, if I own a large apartment complex and there is a proposal to build another large complex next door to mine, I am opposed to it. More housing will lower my rents. However, if I get a permanent tax cut when the new complex is built, it will not take much of a difference in tax rate for my profits to increase (since the lowering of marginal rents will very small from one building and spread over a wide area, whereas the tax benefit is concentrated in the area where I benefit). Landlords would then be forced to use their influence to try to steer new development to be near their own properties, rather than using their combined influence to kill all development.