That’s one of the ideas of LVT actually: building apartments in land doesn’t increase tax burden, burning the apartments doesn’t lower it
Land's assessed value is based on what you could do with it. If can be rented at a profit, that's something you can do with it, and its potential matters. If it can't, then that is no longer a potential value of it.
That doesn't make lvt a bad idea, it's just that I think there's not enough acknowledgement of the trade-offs and limitations.
True, but an LVT is a cost. Changes in cost can change what is financially viable to do with a property, regardless of what is currently done with the lot, and thus can impact the land value.
The idea of cost-plus pricing is folk economics.
Tax incidence is very well understood in economics and has to do with relative supply and demand elasticity (supply of land is perfectly inelastic) and marginal costs which land value tax does not touch.
It's accurate to say LVT changes the price of land. But it doesn't change the profit maximizing productive use of land.
Other taxes that scale with production (sales tax, income tax, property tax) do change profit maximizing productive use.