Earlier quoted context omitted.
The inhabitants don't lose. Play your scenario out. A bunch of poor people buy 100 acres of land for $1, and they turn it into a paradise. It becomes cool, so rich hipsters wanna buy up chunks to Instagram it. The first person sells a patch of land he bought for $0.01 for $1M. Suddenly, property tax on everyone's $0.01 parcels shoots up from $0 to $12,000 per year. These people have no jobs, so they can't afford $12,…
The value you put on living around your family and friends in this scenario is zero. That's not how normal people value those things.
Same would not hold for commercial or nonresidential property ownership. Presumably not by trust (e.g., shielded / non-person) ownership.