Especially when those 2nd, 3rd, + properties are being used as passive short term rentals. Observing the state of the housing situation “Hmm there aren’t enough homes for normal families to each have a chance, I should turn this extra property of mine into a vacation rental.” does this make said person a POS?
I see what you mean, that makes sense.
You could probably sell it as an incentive thing. Rent your property, pay less property tax on it.
But I’d say the tax on rent should still be there, and be proportional to it. Since the property tax would also be dependent on the value of the property, what you say could still be true.