It has to do with selling the apartment complex. Most developers are not long term owners of the real estate (so they dont want to raise rent because as you say it takes time). They develop the project, lease it up and then sell it. In order to maximize value when they sell, they want to lease up each unit for the highest price so they can convince the next buyer that more people will lease units at that high price too. So if you can lease up 80% of the units at $2000 or 90% of the units at $1800 (so the total cash flow is slightly greater in the 90% scenario) the short term holders will choose 80% at the higher rent as the 20% that is vacant is still "worth" more if the next buyer believes that they can lease those units out. So effectively you have to balance the two. There are times when rental rates are increasing that buyers will pay more for a vacant unit than a leased one (at below market rates). If that seems counter intuitive then you dont have a bunch of others people's money you need to invest in order clip some fees off it