They are likely approaching a known busy new-tenant season. It's not uncommon to see rent and housing prices increase as the summer approaches as there are many families who move during that time. School's out and maybe the family wants the children to move schools or don't want to interrupt the school year. People who found places to live right after graduation would have leases that end in May or June and they might be on the hunt for somewhere new.
You also don't specify how you know the complex as a whole is not doing well with occupancy. If other units are being rented out, and their total availability is declining, then it's only natural for prices to go up. (Thinking of a larger apartment complex in this scenario).
Maybe their cost of doing business has increased and they need to offset that and can't afford to have a unit locked in for a whole year at that rate. They might be taking a risk that they have a month empty, but 12 subsequent months at a higher rate than they would have.
Another theory could be that they found that their price point put them under more desirable renters. If someone is searching to rent an apartment and is looking for something in the $1,000 - $1,300/mo range, an apartment being rented at $850 might not hit the radar. Maybe the opposite is true and they're getting too many people applying that this is at the top or over their budget because they fall into the price range of people with lower budgets.
Or, Like RonJohn commented, maybe they're just foolish and don't know what they're doing. There are far too many variables for anyone to give you an actual answer without speaking to the landlord. Which brings me to this:
Ask them. Call the landlord up and say "I was researching apartments and found yours at $X amount, but I see now the price has gone up to $Y. Have improvements been made or has something been changed like including utilities? I would be interested in renting the apartment, but I was hoping to be in the $W - $X range. Would you be willing to negotiate?" Who knows, maybe you'll get to rent it for what you were looking for. Maybe you could offer a 2 year agreement or a higher deposit in return.