Raising rents so high that tenants leave seems counterproductive. Now you have no income from the property. So why do landlords do it?
One of his videos speculates that real estate is being used to store money and the building owners don't want to rent out anything:
https://www.youtube.com/watch?v=Yavgfk0IjdM
Another video speculates that the owners of some buildings have made claims to banks and investors that their buildings are worth more than these buildings are actually worth. In this situation, if the buildings' owners lowered rents they would be admitting that the building is not worth as much as they claim. This could trigger contractual obligations they have with their mortgages and investors:
His rants were prompted by his failed attempts to rent out specific vacant storefronts in NYC and that those exact storefronts have sat vacant for more than 10 years at the time he made his videos.
This is similar to my experience living in a smaller city where there are similar vacant and rundown properties a short walk away from where I live. Notably, these vacant properties are owned by commercial landlords who have a reputation for refusing to sign leases, or quoting "fuck off" prices, with small businesses.
Therefore, if you want local bookstores you need enough supply of commercial real estate to keep the rents at a level the bookstore can afford, or they'll get replaced by chains.
It's that something like a coffee shop can do a ton of business in a high traffic area, and so can pay a higher rent than a local bookstore. So if you only have enough rental units for one of them, the coffee shop is going to bid higher. Which means if you want to have both, you need enough units to exist for both.
Also, you're not actually trying to lose the coffee shop. You want to have both.
It isn't a secret. It is well understood by anyone with experience in commercial real estate.
The evil thing the landlords do is go to the planning and zoning boards and lobby to prevent anyone else from increasing the supply of local rental units.
> I’m in Metro Detroit and either a building is a totally dilapidated wreck in an area that has theft problems, or it’s going for $1~3 per square foot per month on triple net terms
That makes a certain amount of sense. If a building is completely wrecked then the landlord would have to spend a lot of money to improve it, but isn't going to do that if it's in a bad area that couldn't command higher rents even if it was in better condition.
> Worse than that, none of the places anyone lives are anywhere near anything available
Again what you would expect to happen if they weren't purposely withholding units; units in higher demand areas are all rented out and the vacant units are vacant because nobody wants to be there.
> At the same time, I can’t build a decent thing as a “garage” on my 2.1 acres due to zoning in my municipality from 25 years after my house was built
Again consistent with the evil thing landlords do being to lobby the government to prevent competition, rather than not renting out units they could profitably rent out.
> At the same time, there’s a bunch of buildings sitting empty with no rent paid.
But you have yet to establish why. Are they units nobody wants for some reason? Are they "empty" but actually rented out, because some company signed a long-term lease before COVID and now they're WFH so nobody is there, but the lease doesn't allow subletting?
The inverse of the latter could also explain a lot of it for commercial real estate. Companies typically use long-term leases with defined terms because if they move in they're going to have significant expenses to install office furniture, wire up all their computers and cameras and things, put up walls where they want them etc. They're not going to do that in a place that could jack up their rent a year after they move in, so they demand a long-term lease with a defined rent.
Now the landlord has a problem. WFH is still a thing and it's harder to find commercial tenants, but they don't want to provide a new tenant with a huge discount in a long-term lease if they're predicting WFH will go away and they'll be able to demand higher rents in a year or two. And maybe that's cope, but it could still be why they're doing it, at least until they've sacrificed enough income to realize that WFH isn't going away.
Or it could be something else, but "landlord with twenty buildings thinks they can significantly increase city-wide rent by not renting out some of their units" is still nonsense. If it's happening at all it's only because those landlords are the proverbial fool and their money, not because they've devised an evil plan to profit from screwing people, because that evil plan screws the landlord doing it more than it screws the tenants.
Again, their actual evil plan is to prevent other people from putting more units on the market, by lobbying for zoning restrictions that inhibit new construction. Not by foregoing their own profits on their existing units.
One of the serious possibilities is that they're dumb. Lots of idiots exist, some of them buy real estate. They're asking for more because they erroneously think they can get it and then they're wrong so the unit is empty. They eventually either figure this out and lower the price or they run out of money to pay the mortgage and the bank comes for them, but either of those could take an arbitrarily long period of time.