You&#x27;re assuming that the tax is so onerous as to make rental housing unprofitable. Not just <i>less</i> profitable, but a flat-out cash drain. That&#x27;s a pretty big assumption.<p>If you assume that it just captures a fraction of the profit, then the existing stock would remain, because it&#x27;s still profitable. New build rentals would be affected, and would probably push towards more land-efficient form factors.<p>Take your example, with the added assumption that the landlord is netting out $200&#x2F;mo after expenses, repairs, vacancy, etc. If the land tax was 100&#x2F;mo, he&#x27;d still be taking home $100&#x2F;mo. ROI is cut in half, but it&#x27;s still positive, so it will probably stay a rental. Certainly some of the marginal units will get turned into for-sale housing, but not all of them, and probably none would be abandoned.