Pardon <i>my</i> ignorance, but property owners have the most fixed supply possible - they&#x27;re selling <i>house space</i>, it&#x27;s literally nailed to the ground. To paraphrase the root comment, the prices are set by how much tenants are willing&#x2F;able to pay. Higher property taxes mean investors take less profit from housing, which means it takes longer for them to save enough rent money to buy <i>more</i> properties to lease. And therefore less money with which to drive up the bidding war prices.