One Young (née Mayfair Hotel) | 5 fl | Complete

[darts]

I don’t find this too compelling because, in a lot of cases, vacant properties are owned on speculation. The owners are often hoping that activity on neighbouring properties, undertaken with other people’s (and the public’s) capital and other people’s risk, will increase the value of their own through no contribution of their own. It doesn’t seem like good policy to reward this with a lower tax rate, or to incentivize what we do not want (properties lying fallow) with the same.

While I agree that you shouldn't have tax policies forcing someone to build something to make economic use of the land they own, at the same time I think it's more important that you don't provide a perverse incentive to a landowner to demolish what's there (a currently vacant building, perhaps) to put in place a land use with a lower tax burden. This is how some depressed downtown areas have gone from old reusable building stock to parking lots.

If there is a building in place they would rent it out though, property taxes are usually paid by the tenant as part of the lease agreement and they would be eligible for a vacancy exemption to reduce their property taxes while they try to get a new tenant.
Tearing it down is usually left as a last resort and usually if only the building is already in bad shape. I think an empty lot would be preferred to a boarded up building.

I would wager that the old reusable buildings in other downtowns were not in a good shape to be reused, it is a lot more expensive to renovate a building than to build new in a lot of cases. Only recently in Kitchener  due to software companies having a preference for older buildings has there been demand.  Previously the buildings just kind of lumbered on marginally being used like the building that houses Adventure Rooms or Len's Mill Store. After going up to the second floor I would question how safe that building really is.