Your benefit from building a thing on your land is far larger than the effect of that on your LVT, as much of the value spills onto neighboring land (your mall makes places nearby more valuable). Similarly if your neighbor builds something valuable you have to pay more taxes, encouraging you to put your land to its most valuable use or sell to someone who will.
Every individual landowner still has a very strong incentive to put their land to good use, and their doing so will push neighbors to do the same. It helps development and funding of public goods (the LVT pays for a decent fraction of government revenues), it doesn’t hurt it. All those vacant lots will be pushed into service, inefficient land uses like parking lots or inefficient businesses or undersized apartment buildings will be pushed into renovations and rebuilds or more valuable uses. Your neighbors may not be pleased about your improvements as it ups their taxes, but we just need to defang them and put an end to all methods NIMBYs use to coerce people and prevent them from doing as they like with their own land.
Every individual landowner still has a very strong incentive to put their land to good use, and their doing so will push neighbors to do the same. It helps development and funding of public goods (the LVT pays for a decent fraction of government revenues), it doesn’t hurt it. All those vacant lots will be pushed into service, inefficient land uses like parking lots or inefficient businesses or undersized apartment buildings will be pushed into renovations and rebuilds or more valuable uses. Your neighbors may not be pleased about your improvements as it ups their taxes, but we just need to defang them and put an end to all methods NIMBYs use to coerce people and prevent them from doing as they like with their own land.