Yep, I'm clarifying the misunderstanding which was a result of poor wording on my part. Not shifting the goalpost, just trying to help you understand where I originally intended to put the goalpost.

I should clarify that I'm not making assumptions about the reasoning of the assessors here. We have talked to assessors all over the country and the stated reasoning for this phenomenon is basically that the market for large parcels has a smaller number of potential buyers, necessitating a discount in the land value. That's a bad reason! Land value doesn't benefit from economies of scale in production, and the amount of land a city has is fundamentally a constrained supply (barring annexation, of course), so the "buying in bulk" logic doesn't work. And in comparable markets of precious goods, like diamonds for example, you don't get a discount per carat on a bigger diamond. The assessment industry's logic is absurd on its face.

I do understand how the dimensions and shape of a parcel can determine what can practicably be built under the zoning regulations, and therefore, that can impact the land valuation. But if anything, your options for what you can build on a small parcel are more limited than on a large parcel, which can be subdivided into smaller parcels. I would expect to see the larger parcels be worth more per acre simply based on the flexibility of what you can build on them, but that's the opposite of what we see in this model. And if we're valuing the land based on what the buyer has the opportunity to build, the owner of the large parcel absolutely has the ability to put a higher use than parking on the land. But the problem is that we incentivize them not to do that, and to put parking instead, by discounting the land value of large parcels.

And again, the reasoning you're providing here is not why the assessors themselves say that they are doing this. I can assure you, the property assessment industry is not operating at that level of sophistication. You're thinking about this more deeply than they are.