LVT doesn't encourage infinite development on all land - it encourages the efficient use of land.

If you replaced property taxes with land value taxes and held revenue equal:

For rural areas, not much would change. Land is cheap and taxes would remain low.

For suburban areas, there would be a moderate shift in tax burden. People with homes on large plots of land would pay more; people with homes on smaller plots of land would pay less.

For urban areas, the changes would be drastic. Because land is limited in urban cores and appreciates in value every year, there's an absurd amount of speculation. An LVT would discourage this by making it costly to hold onto undeveloped or underdeveloped land just for future price gains. As a result, we could expect a surge in the development of vacant or underutilized plots, leading to a potential increase in housing availability and a decrease in rental prices. This would both alleviate housing shortages and reduce the speculative bubbles that can distort urban real estate markets.