Not sure I agree. The extent of the increase is certainly up for debate, but in a place like California where we have a housing affordability crisis, packing m

Not sure I agree. The extent of the increase is certainly up for debate, but in a place like California where we have a housing affordability crisis, packing more housing units onto the same lot absolutely increases the value of the lot as a whole. Now, certainly each individual house will be worth less than a single house on the lot would be. But the value of the lot+improvements will likely go up quite a lot. Also consider that the value of the lot, unimproved, doesn't just magically go up once you get approval to build your friend compound. To get that $1M -> $2.5M increase in value, you probably have to invest a cool million into building the rest of the homes.