Here's where I think you're going wrong: the unimproved land value of Alice's land does kinda change? If you try to do it specifically at the lot level, you go

Here's where I think you're going wrong: the unimproved land value of Alice's land does kinda change? If you try to do it specifically at the lot level, you go crazy. Do it at the neighborhood or block level on a per square foot basis, and you'll be able to levelize the value of two lots next to each other. And this handles someone building a private road or a subway or something: them building it increases the land value of the entire neighborhood, including the property the improvement is on, but the value of the improvement isn't included. It's having access to a subway, or having a hotel nearby, or a restaurant nearby that improves values, and they stack. There might be some adjustments on a lot level, but that's due to things like: water access might increase the value of the lots that have it, but not on the other side of the street that doesn't have access. And here's the thing: cities already calculate the value of the land separately from the stuff on top. I do look at my property taxes, and they break it into the two values.