&gt;The difference in rents between a single family house and a multi-story apartment building is &quot;scraps&quot;?<p>No, but if the land is densely populated and high value the potential stream of rental income from building an average house will be lower than the land taxes and you&#x27;ll lose money building it.<p>&quot;Scraps&quot; is what speculating over the value of that housing will get you when the only rents to be derived are from the value you create as a property developer.<p>&gt;And you couldn&#x27;t even calculate it using the fact that someone paying money for land indicates that it&#x27;s under-assessed, because if that was expected to work then no one would ever pay more than $0 as the value of unimproved land<p>Well, that&#x27;s the point isn&#x27;t it? If somebody does pay more than $0 for unimproved land (or land with buildings that are worth $0), that&#x27;s a data point that you can use to adjust your model.