Comment by adverbly

I would say that this is largely a feature not a bug :)

Let's look at what the author said about this:

> For instance, if a developer owns multiple adjacent parcels and decides to build housing or infrastructure on one of them, the value of the undeveloped parcels will rise due to their proximity to the improvements. As a result, the developer faces higher taxes on the remaining undeveloped land, making development less financially appealing in the first place.

> This creates a counterproductive dynamic: developers may hesitate to improve their land or invest in new projects because they know that any improvements will increase their tax burden on adjacent parcels.

This is exactly correct analysis, but this is good not bad! LVT is preventing hoarding land during development. Of course someone who acts according to the old system's incentives will lose in that model!

First, let's talk about why the existing model is bad though: right now, developers make a huge part of their money not directly from actually building, but from the increase in the land value that happens during construction. This means that developers need to acquire huge sections of land and then only build one house at a time. This is insanely inefficient! It literally prevents anyone else from building in parallel or at lower cost! There is zero competition!

In a world with LVT, a developer would be incentivized to acquire and start work in smaller increments, leaving the door open top more competition and for more companies to enter the space - lowering costs and increasing the speed of construction.