It incentivizes multi-unit construction, as the more productive the land is, the less onerous the land taxes become. (Wheres currently, developing land normally increases the land tax.)

Increasing units per land both provides more housing, and reduces the tax/renter pass through.

It disincentivizes holding unproductive land as an investment, since unproductive land gets taxed as highly as productive land.

All these benefits probably accrue, from good economic alignment, because a land tax, instead of total property value tax, reflects that it is land, not its development, which is the finite resource.

Land is finite, yet we all absolutely need land, along with food, air, and water. (Finite in a soft way, given different land is more or less usable). We only "own" land in passing. So those holding it shouldn't be lightly excluding better uses of an absolutely necessary resource.