Land value tax often goes hand in hand with lax zoning.
In your example, if the grandma's house went from 200k to a 1million, then she isn't poor anymore. She is very rich.
She doesn't have to leave the neighborhood. She can give her house away for redevelopment into a condo. Get the nice penthouse flat and a pretty penny on the same land. Now, she has enough liquidity to pay the land value tax, which is also lower per person because it's distributed over the whole condo.
This is happening in India right now. Apartments are redeveloped into towers. Old residents get 2x the floor space and decent relocation $$ for the construction period. No one is being kicked out of their house. Most people move to another spot within a 10 minutes walk from their home for 3 years and then come back when the building is done.
In my country, a previously ~100k condo apartment now costs 500k+... sometimes even less than that before (city center, no easy parking, lots of noise) and more now (airbnb).
In your example, if the grandma's house went from 200k to a 1million, then she isn't poor anymore. She is very rich.
She doesn't have to leave the neighborhood. She can give her house away for redevelopment into a condo. Get the nice penthouse flat and a pretty penny on the same land. Now, she has enough liquidity to pay the land value tax, which is also lower per person because it's distributed over the whole condo.
This is happening in India right now. Apartments are redeveloped into towers. Old residents get 2x the floor space and decent relocation $$ for the construction period. No one is being kicked out of their house. Most people move to another spot within a 10 minutes walk from their home for 3 years and then come back when the building is done.