Presumably, the aggregate effect of local municipalities coffers increases improves the local area, making it more desirable/valuable, which is increased value.

Presumably, the aggregate effect of local municipalities coffers increases improves the local area, making it more desirable/valuable, which is increased value. You could indeed realise that value: by selling your house and buying one in an area with the same desirability that your current house had when you purchased it. So you can either hop around similar places and profit, or stay in one place that improves over time, and also pay more taxes over time.