>> A building sitting empty for 5 years is a massive cost even if it’s later filled.

Don't look too closely at NYC, Vancouver, london, or any of the other hot markets. Whether for historical preservation scams or investment trickery, it is not unusual for a building to sit empty for many years. Given the effort that it takes to oust tenants, and the length of time necessary for zoning/planning, many owners would rather a building sit empty for years pending redevelopment rather than the hassle of filling it.

Google "Calgary new horizons mall". From the owner/developer's perspective that mall is technically full and, at least for them, profitable.

US national vacancy rate is ~6.9% and NYC sit's well below that at under 4%. Much like the unemployment rate these things don't hit 0% for various reasons. But, that's very different from building a 11th building when your first 10 are all at 90% vacancy.

"Vacancy" is something above a building being empty. Vacancy is a building that has space available that hasn't been filled. It does not cover buildings deliberately left empty by owners. A building waiting years to be demolished and replaced isn't vacant, nor a condo kept only as an investment and never lived in.

That mall in Calgary isn't vacant either. Each store/stall is technically occupied by its owner. There just aren't any flesh and blood people in the mall.

NYC has ~60,000 buildings. Less than 1% of them are deliberately left empty by their owners. It’s a very different situation in a city which can make use of that space as demonstrated by the low vacancy rate.

That mall does have people shopping in it. In terms of retail square footage it’s underutilized but a long way from empty. Good or bad investment they are not building 3 of them next to each other while the first is far from full.

Really, you have some edge cases with people trying to time the market, deal with zoning or lawsuits etc. But, that’s different from seeing 6 empty apartment buildings and saying let’s build another one.

For dense urban areas land cost could exceed building cost. However for ghost cities land cost (defined as an opportunity cost) is low to begin with. While building material may have alternative use, if the labor used to build buildings don't have a lot of alternative use then the true economic cost of building a building may be below the headline cost as well.