Anything that affects the cap rate also affects the marginal conversion of that building from rentals into owner-occupant usage (especially in jurisdictions where there's a homestead or owner-occupant partial abatement of taxes).
It may not seem like there's a direct effect because Unit 2 on 123 Main Street is still a rental for the same price after a $50/mo tax increase. But, some other unit ends up being sold to an end-user (or a condo-conversion developer) instead of staying as a rental. Across the body of rentals, I believe that tax increases show up in rent over the long-run. Landlords aren't in the business to give renters breaks. (Nor are they evil Scrooge McDucks; the good ones are just smart businesspeople who can do math and put up with people... :) )
It may not seem like there's a direct effect because Unit 2 on 123 Main Street is still a rental for the same price after a $50/mo tax increase. But, some other unit ends up being sold to an end-user (or a condo-conversion developer) instead of staying as a rental. Across the body of rentals, I believe that tax increases show up in rent over the long-run. Landlords aren't in the business to give renters breaks. (Nor are they evil Scrooge McDucks; the good ones are just smart businesspeople who can do math and put up with people... :) )