Sometimes people want to sit on underdeveloped-for-the-location land not because it's a low-effort way to ride capital gains but for non-economic reasons.

Examples include conservation projects and urban farms, but the big one is empty-nesters ageing in place (while the city has grown around them).

If you've seen the start of the movie Up you'll recall that Mr. Carl Fredrickson owns a detached home which now has apartment towers going up on all sides. As a widower his house holds extreme sentimental value to him; he isn't selling. Under an optimal land tax regime, he'd be paying quite a bit of land tax reflecting the increased desirability of his location, and would potentially be forced to sell up as a result.