> One implication of what you write seems to be that every property owner is incentevized to NIMBY any improvements to the area that they don't care about. For example, if I am "child free" I will now oppose the building of schools and playgrounds on the basis that they make my LVT go up with no benefit to me.

This already happens just with more economic inefficiency under a property-tax regime. People already vote against improvements that would cause their taxes to go up.