[QuarterReptile]

Land being more expensive than the improvements atop it is a great milestone that your restrictive zoning is truly out of control, and that your area has probably bumped up against serious geographic constraints.

Which is to say, what you've described is a signal to demolish and build higher intensity, while the filtering happens elsewhere.

[seanmcdirmid]

No, at some point you tear down the old structure and build a new expensive one. Or in the Japanese extreme, you tear down and rebuild the house whenever it changes hands (since no one wants to live in a second hand house).