By and large, renters don't rent unimproved land. They typically rent dwellings. Those dwellings are typically funded by loans taken out for the purpose of a profit-making endeavor, meaning they are tax-deductible loans (just like when an airline buys an airliner or an automaker builds a factory).

It's the provisioning of those structures that LVT dirctly inentivises.

I've provided you seveal refeences, please do read them. The Wikipedia article explains and diagrams the dynamic very clearly.

I've read a fair amount about land value taxes. I have no objection to them as a means to efficiently raise property tax revenue.

This thread is about the deductibility of mortgage interest for owner-occupied vs rented properties.