Same in San Francisco. My old landlord never rented out my old place when I left (3 unit building). She was getting close to retirement and had gotten advice that the building would fetch 2-3x if fully unoccupied. So she was just waiting since giving up $40,000/yr in rent for a $500,000 higher pay off is an easy trade off.

People forget that you can always “price in” regulatory changes. Then you just see which path maximizes profit. What may seem ridiculous (leaving a unit empty) actually makes a lot of sense based on the rules.