Assuming this lot is located in a high-rent, heavily regulated area like SF or NY, why would you assume that a lot zoned for SFR would be assessed at the same rate as MFR, and especially high-rise development?
That's not a pure LVT anymore is it? Nevertheless my point stands that if you build a larger development on the same land you would put a greater strain on public services without contributing more.
Now you probably want to encourage building more housing on the same land to alleviate the lack of housing (which is why an LVT is so often proposed) but local taxation first and foremost has to fund local public services, or there really is no point. You can additionally penalize leaving land undeveloped, but that should be a secondary tax (or penalty) on top of a basic one that scales with the cost of providing those services, not the primary source of funding for local government.
Now you probably want to encourage building more housing on the same land to alleviate the lack of housing (which is why an LVT is so often proposed) but local taxation first and foremost has to fund local public services, or there really is no point. You can additionally penalize leaving land undeveloped, but that should be a secondary tax (or penalty) on top of a basic one that scales with the cost of providing those services, not the primary source of funding for local government.