Why? Because apparently they need some more incentive to keep units occupied. Also, even though a property might be vacant, there’s still imputed rental income there. Its owner is just receiving it in the form of enjoying the unit for himself instead of receiving an actual rent check from a tenant. That imputed rent ought to be taxed like any other income.
I wouldn’t be so sure about that. Landlords should be legally compelled to keep their properties up to snuff and if that’s too much to ask then they need to get out of the business. As for renovations, if they have to do any that would make a unit uninhabitable for a period of time then that would probably warrant a temporary reduction of the taxable rent, which could be addressed in the permitting process. If renovations take longer than what was permitted, authorities could investigate to make sure the owner isn’t actually warehousing the unit, which would be a violation. In any case, tax on the imputed rent of the land would still be owed, so there’s always an incentive to complete renovations quickly.
Edit: as I replied here, I’m not a fan of land value or other property taxes.