By "rapidly" I mean on the span of a few years. If your neighbor subdivides their lot, the smartest thing for you to do is subdivide yours (after all, it will turn your $1M into $2.5M, no?). It will have a domino effect because the last house in the neighborhood full of subdivisions will have the lowest sale value (and the first house to subdivide will be the most valuable).
The intent is good but the system needs a moderating factor to prevent runaway.
The intent is good but the system needs a moderating factor to prevent runaway.