Out in the grassland, 50 miles from any existing center, a farmland is indeed a more productive use of the hectare than paving it over and building an uninhabited-but-dense urban center there.
The owners of the land will be considering alternative uses for their land by how much additional revenue they could produce.
If the owner of a hectare of remote farmland decides to do something else with it other than tilling it as a flat field, it is far more likely to be building greenhouses, or burying drainage tile, or installing center-pivot irrigation and planting windbreaks, or just changing to a higher-margin crop rather than something like erecting a mid-rise AAA office building. Even building a vertical farm is unlikely.
If the hectare is in the middle of the fastest-growing city in the state, selling out or converting to a different use is increasingly likely, as the marginal increase in revenue over the marginal cost of making the improvement rises.
Consider also that a hectare in the suburbs is likely not directly producing any revenue for the owner at all. Its worth is almost entirely derived from opportunity costs. The owner of that land might decide to grow a vegetable garden in response to a tax, or raise rabbits or chickens in the back yard. Or they might decide to lease their mother-in-law apartment in the basement or garage. or they might just work a little harder elsewhere to pay the cost of not improving their land.
The owners of the land will be considering alternative uses for their land by how much additional revenue they could produce.
If the owner of a hectare of remote farmland decides to do something else with it other than tilling it as a flat field, it is far more likely to be building greenhouses, or burying drainage tile, or installing center-pivot irrigation and planting windbreaks, or just changing to a higher-margin crop rather than something like erecting a mid-rise AAA office building. Even building a vertical farm is unlikely.
If the hectare is in the middle of the fastest-growing city in the state, selling out or converting to a different use is increasingly likely, as the marginal increase in revenue over the marginal cost of making the improvement rises.
Consider also that a hectare in the suburbs is likely not directly producing any revenue for the owner at all. Its worth is almost entirely derived from opportunity costs. The owner of that land might decide to grow a vegetable garden in response to a tax, or raise rabbits or chickens in the back yard. Or they might decide to lease their mother-in-law apartment in the basement or garage. or they might just work a little harder elsewhere to pay the cost of not improving their land.