It costs as much to maintain the streets and pipes, and to have the police and fire trucks travel past vacant lots as those on which people are working or living. And, because most of our taxes now come from workers, buildings and the products they make, these unused and underused sites mean lost revenue for cities. They also mean less jobs and housing. They receive no income from their ownership at all. If they sold their properties and put the money in the bank, they would receive interest.
Any income is better than none.
However, many people find that the annual increase in the selling value of their land, even after the property taxes are paid, is greater than the interest they would receive by selling the land and putting the money in the bank. Even during a recession, while land prices are falling, many people believe that in the long run, the selling price of their land is their best financial asset. As a result, they hold the land out of use, and this creates lost revenue and a shortage of housing and jobs. It costs little to hold onto land, and the resulting scarcity of land simply raises the cost of sites for business. What starts out as small pockets of inactivity, waiting to see what market demands will be in their future, often manifests in the degeneration of a whole region of the city.