>> "What if the city builds infra near my land that makes it effective now to develop? Should I pay more tax now?"
> Yes, you should.
Doesn't this make NIMBYism even more tempting? I've got to be against any changes near my land, because it's going to increase my taxes and push me to move. In addition to not liking change in general.
A rational economic actor would not be a NIMBY under these conditions, because the increase in land values exceeds the increased tax they would pay, and so they could always sell their property for a profit and buy another one farther away from infrastructure if they don't like it.
In reality, people are change-averse and irrational for a variety of reasons, chief among them emotional attachment. So it wouldn't surprise me if people resist development in practice. A lot of NIMBYism is already of this vein - upzoning a property usually increases its value (because it can be redeveloped into more units), but is also frequently fiercely resisted by existing residents who won't sell at any price.
Note that a system can be rational even if participants are not - capitalism is, because actors who are irrational eventually go bankrupt and are forced to work for actors who are economically rational. That doesn't stop it from being unpopular, which, again, capitalism is. Many of the political issues getting an LVT adopted stem from this.
How is the value of unimproved land determined in places where there is no nearby unimproved land to compare with. For example, how would I determine this value in lower Manhattan?
You run a regression on the value of all the improvements, then subtract that from the sale price to get the value of the unimproved land. Smooth that over the per-square-foot value of neighboring properties and you can have a pretty good estimate of for the unimproved value of the land.
If you have a hundred thousand properties to collect data on, you can get a pretty good idea of "a 3BR unit increases the value of the property this much, a 2BR unit increases it by this much, X feet in height result in this change in value, per parking space the value increases by this much". Sophisticated real-estate investors and the banks that fund them are running this calculation anyway, that's how they know which properties are good deals. Once you have a formula for this, you plug in the stats of the property in question to figure out the value of the improvements, and then the unimproved value of the land is everything left over.
> Yes, you should.
Doesn't this make NIMBYism even more tempting? I've got to be against any changes near my land, because it's going to increase my taxes and push me to move. In addition to not liking change in general.