&gt;you&#x27;ll still have speculators speculating on the value of the buildings<p>Congratulations, you just defined &quot;fighting over scraps&quot;.<p>&gt;Which brings up a good question. There are plenty of places where there is a 50-unit ten-story apartment building on a lot of about the same size as the surrounding single family homes, e.g. because the houses have yards and the apartment building fills the entire lot. So what is the assessed value of the &quot;land&quot; supposed to be then?<p>The assessed value of the land of your next door neighbor will be similar to yours.<p>If you&#x27;re asking how it&#x27;s calculated, check the wikipedia page (the answer is multivariate analysis using property sales).