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Isn’t the real problem not enough units?

If there are enough units, there’s no need for extra taxation on vacant units as it becomes a self-correcting problem (or someone pays a whack of property tax while consuming less than the proportional services, meaning they’re subsidizing others).

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The algorithm would create scarcity by having some sit empty.

That only works when a single owner controls a massive % of them. In a healthy market with lots of smaller landlords, one individual owner won’t let their 1-2 apartments sit empty so that some other landlord can rent theirs for more.

What if an app allows landlords to easily coordinate on prices?

The moment one of them had their apartment left empty they would fold and drop their price rather than leave it vacant and take a loss.

That isn't what's happened with the RealPage case. Landlords are keeping properties vacant for months at a time under the promise that it will boost their long term profits.

The higher the margins, the more wealthy people will want to build houses to rent them out.

At some number of vacant houses the algorithm changes

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