If land values have truly doubled in 8 years it isn't like the family involved is out of pocket. They've made a small fortune. The idea they can make a small fortune and prevent land from being used is also morally gross. The only justification is that a large hurt is diffuse where the small hurt would be concentrated. That is a defensible philosophy but it is also one where eventually everyone is worse off. And it isn't like this is an erosion of property rights; they are being taxed on benefits that they are not responsible for creating. 1.5% land tax so people have to re-buy the land once a generation is as good an idea in tax law as any I've seen.
I agree that having to change a lifestyle because of taxation is pretty awful and the system should strive not to do it. But I've visited places like Hong Kong and seen the density of living there. We're talking an order of magnitude more people. The number of people who come out ahead from that sort of property development is so overwhelming we can't process it using intuition and positive stories about individuals.
This can be done by borrowing against the house from a financial institution or we can have the government place just place liens on the property if you can't pay.
Further, it creates a legal and financial risk in the entire system where property becomes subject to the whims of whatever governing authority therefore discouraging investment and real ownership.
The Kelo decision was despicable, let's not encourage it.