People won't buy it because it comes with a tax burden. They might buy it to redevelop it if it didn't.

That does not seem like a realistic problem for very many places. If a jurisdiction contains land with so little value that it won't support the taxes required for upkeep of the jurisdiction, then the jurisdiction could dissolve. Which is what happens to a ghost town I would imagine. That is not likely to happen to New York City.

So over time the vacancy tax is increasing and the sale price is going down. Obviously the vendor needs to sell or redevelop before the price hits zero. If they fail to do so then they lose the property. Speculation sometimes fails. What's the problem?

Good, then it will go to someone who needs a house, not another rent-seeking parasite.