You are conflating non local and local government. Your town doesn't levy capital gains but your state or nation may.

Do you understand where that "built wealth" comes from? It doesn't appear from the ether - it's transferred from one person to another. In this case, it's transferred from a legitimate useful business to a rent-seeking investor who creates no value but holds value hostage. And if the amount of "built wealth" is too high, no business exists that can afford to pay it, and so it doesn't get "built".

Wealth is zero sum?

Even worse, wealth is vacuumed up.

Wealth from land ownership is zero sum.

Doesn't this assume land can't become more productive over time? Like was Las Vegas real estate as valuable when it was barren desert?

That wealth comes from using the land, not owning it. The landlord has nothing to do with it - he only takes as much of the wealth someone else created as he can get away with.

Traditionaly as in since what post redlining ban downzoning in the 1960s? No peasant was expecting their hovel to be an investment vehicle where they’d replace the doorknobs with cheaper furnishings and 10x their investment and somehow their peasant kids working peasant jobs would afford that.

I mean isn’t the whole rub the cost of housing is outpacing wages? Goes to show how short our historical perspective really is.

> No peasant was expecting their hovel to be an investment

It is not:) There was a fortunate coincidence of factors like economy, demography, immigration from EU countries which enabled it. Now that's all over, it's gone.