What makes the land valuable to the factory?  Serious question.  You have the factory there, presumably a big factory was the best available use of that land.  
Then people move to live around the factory.  Are you suggesting that houses suddenly become the best available use?  Because that doesn&#x27;t make a lot of sense.
Of course the value does go up, but thats because the factory now has ready access to a population of employees.  Did the factory build the houses around it that enabled that?  No!  So the amount the factories taxes go up from LVT is exactly equal to its net benefit from having a population near it ready to act as a labor pool.  In other words, it has lost nothing from the tax, but merely failed to gain economic advantage simply from controlling the land.