An empty space in an urban area is always a cost to the public, by way of providing zero utility, yet everyone having to expend time and energy to commute around it. The owner is squatting on it, waiting for other people to work to make the surrounding area more desirable, at which point they can enjoy the higher rents.
Basically, the owner gets something for nothing, which is tantamount to rent seeking.
How does that prevent the owner from renting out the building now? Why don't they rent out the building for a lower rent now and for a higher rent later, when the area is more desirable?
And how are they getting something for nothing? Would you say the same about all ownership? Like when someone owns stock in a company or owns pension rights?
Renting involves risk. Risk that you pass up a higher paying tenant in the future, risk that your property is damaged, and is just extra work in general. Based on the amount of empty parcels and storefronts we see for years and years, many landlords clearly don’t care about smaller amounts of profit today.
> And how are they getting something for nothing?
Because they didn’t do anything. They didn’t do the labor of developing a structure, renovating it, operating a business, or even managing a tenant if they left it empty. Yet they will get protection from the police and courts and military for their property, and a higher price when they do sell.
> Would you say the same about all ownership? Like when someone owns stock in a company or owns pension rights?
Depends how the company earns money. Is the company doing something now, or taking advantage of excessive protections granted by the government. For example 100+ year long copyright terms, or recurring charges for structural monopolies without improving infrastructure (Comcast, etc).
On a societal level, one can see the elderly population who cannot provide for themselves depends on rent seeking as a whole (whether via sophisticated financial agreements or simply traditions that oblige children to take care of older generations).
Which isn’t a problem in and of itself, but excessive amounts of it is, because it will sap the younger generations’ rewards too much such that they won’t be incentivized. And this leads to the problems experienced by societies with flattening population histograms around the world.
Basically, the owner gets something for nothing, which is tantamount to rent seeking.