alt Hacker NewsYou are right that the units sit empty because the banks have loan covenants with the landlords that minimum rent is XX, which is higher than the unit is currently worth.
It isn't so much extend and pretend, its landlord CANT lower the rent without violating their loan.
If you get government involved, this will just get more expensive. We need to wait it out until the landlord can't pay the loan anyway and is forced to sell the building at a massive loss. Then the new owner will have a new loan with a new price floor and the dance can start over.
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This is exactly the case. On my Canadian high street the redevelopments are either empty or exclusively high cost businesses. I looked at the rent arrears notice posted on one failed shop and the rate would exclude anything not a money mill. They'll be no lutiers or second hand bookstores in the shiny towers on my street.
What if you had a rental agreement where you pay $x for y% of the property but the landlord lets you use the whole thing and x/(y*0.01) > minimum rent?
Or you pay minimum rent but your landlord gives you some of it back?
Idk, there's probably room for creativity here
> It isn't so much extend and pretend, its landlord CANT lower the rent without violating their loan.
IANAPropertyGuy, but IIRC the banks don't really want to foreclose on it anyway, because that means recognizing that they made losing loans and they don't want to have to figure out what to do with the building that can't be sold off for much.
Hence strategically looking the other way when landlords off "first X months free" deals in lieu of an officially-lower rent.