You can't undo the split. One of the caveats passed in the same vote states that you can't reduce housing density - so if you build two units, they can't be reunited into one lot again.

How does this work in law?

Can't I just own and use both lots at the same time? Would I need to technically 'reunite' them? Can't I just use both of them at the same time?

I'm assuming for future construction, you'd have to treat each lot as separate with regards to setbacks from the property lines. So no building a house that straddles the old property line, I suppose

Higher property tax, as the downside, for two vs one lot?

There is a non-zero chance—-very unlikely: it would require a 50%-60% decrease in housing prices—-that they could lose the backyard without making income. The weighted probability might lower the Expected Value 1k. That said, foreclosure would still be beholden to the profit split agreement should the lot be profitable.

As house prices drop, more people will try to buy full-sized single family homes and the least desirable houses fall faster. You could get a 10% drop in house prices, but these split lot houses could fall 50% or more, just like condo prices.

This happened during the housing crash of 2009. I know first hand, my own condo dropped by more than 50%, which I did a strategic default on.

Can you share numbers from completed projects?