If you buy a block of land with 10 filled apartments on it, and then you demolish it and leave it vacant, the land still has value.

In theory, it still has whatever value the optimal use would provide.

In reality we don’t have an optimal land use oracle, and valuation techniques would take the vacant lot as a data point suggesting that the area is bad. The assessed land value might decrease a tiny bit – along with that of your entire suburb, and similar regions. But it’s not going to zero.

Similarly, if you take a block of land, put 10 apartments on there, and fill them with renters, you’ll create property value where there was none, but the land value isn’t going to go up 10x.