I think the idea is those roads and sewers have the same capacity downtown whether next to an apartment building or a surface-level parking lot. There will be the same number of lanes, street lamps, sidewalks, etc.

I would go further and actually argue that you need more road and sewer capacity because someone inserted a blank patch of land between dense areas.

The tax is an incentive to develop when the land's value is high. The city is basically saying that you have an obligation to build something useful or sell the land to someone who will.

I'm interested to see what happens. I'm hopeful that it will be good for urbanization.

Surrounding towns will probably not do LVT, which will also be interesting.

It’s system length that’s the bigger cost. If people are disincentivized from developing land, then the result is sprawl, with far greater infrastructure costs due to the enormous system lengths. Same goes for road costs, police, fire, schools, etc.

The rest are different, but in the several US localities I've lived in, water and sewer are paid as separate metered services. (Only the water is metered, the sewer is billed proportionally to the water usage.)

It's easy to charge a use fee for wastewater (my city bills based on water consumption). If the demand for a service increases dramatically, it's likely practical to make more of it available.

Of your list, only police and schools are (probably) driven by people rather than land area. Fire stations are decided by distances to stations, which is why any actual fire sees enormous overkill response (finally a chance to use the toys!)

Surface streets are obviously proportional to land area. So are water and sewage infrastructure, and they're massively more expensive than streets. As others have pointed out, water treatment and supply are handled by usage charges.