> Some might say this is all simply market Darwinism, just with more cold-pressed beet juice. But it’s interesting that the free market exists only on one side

> Some might say this is all simply market Darwinism, just with more cold-pressed beet juice. But it’s interesting that the free market exists only on one side of the equation. Since California passed Proposition 13 in 1978, property tax rates for those San Franciscans who owned property back then have been severely capped. Owners may pay Nixon-era property tax rates, while renting out those spaces at rates that have exploded in the last 40 years. They, too, can afford to let buildings sit empty. Tax policies play a big role in setting up market distortions like those happening in San Francisco. It's not just the rate, but the basis. Strong Towns has a discussion of the idea that taxing land, not improvements leads to better outcomes: > A parking lot in a bustling downtown is the classic example of a property where nearly all of the value is in the land itself, not the asphalt on top of it. In a rising market, you can hold onto the land and watch its value go steadily up (thanks to all the things your neighbors are doing to make the place more productive and successful). You can collect enough in parking fees to cover the taxes, and cash out when you're ready to cash out. Your property tax bill will be relatively low, because it's based on the sum of land value and improvements. The land may be in a central, prized location, but the "improvements" on the property (that's tax-assessor speak for any sort of structure built on the land) are worth next to zero. https://www.strongtowns.org/journal/2019/3/5/whats-with-that-empty-lot-in-the-heart-of-the-city https://www.strongtowns.org/journal/2019/3/5/whats-with-that... This line of thinking may also apply to empty shops in SF. As long as the overall property is covering expenses, why bother making the improvements needed to attract new tenants (and thereby adding the tax burden) when you can just sit back and watch real estate prices head to the moon.