&gt; The value increases. It&#x27;s just gathered as taxes.<p>In other words, from the perspective of the land owner, the land value doesn&#x27;t increase because the added value goes to the tax collector instead of the land owner. Which is true for both the owner&#x2F;seller and prospective buyers of the land, so the value (meaning market value) of the land doesn&#x27;t go up. Assuming the tax is perfectly calibrated and the land value estimate is correct <i>before</i> the existence of the tax reduces the market value of the land.<p>Here&#x27;s the problem right now. Rents are too damn high and people can&#x27;t afford to live in the city. You pass the land value tax and land market values decrease accordingly because property buyers won&#x27;t pay as much for land they can&#x27;t collect as much rent from. But the rents are still too damn high, they&#x27;re just going to the tax collector instead of the land owner. And people can&#x27;t build new housing to alleviate the high rents for the same reason they don&#x27;t already, because zoning regulations prohibit it.<p>Suppose instead we change zoning regulations to allow builders to build several dozen new 50 story skyscrapers full of residential housing in the city. Supply goes up, price goes down. So property values go down and rents go down and now people can afford housing. How is that not better? It gives the &quot;rents&quot; to the tenants instead of the tax collector.