High land prices don't "unlock" capital, they drain it away from productive use. All other things being equal, it would be far more preferable to have cheaper land - in fact, urban renewal often occurs in cheaper areas, with negative gentrification setting in later as land prices spike upwards due to speculation.
High land prices don't happen in a vacuum and then just magically drain productivity, they reflect demand. And demand from people with lots money generally means an area that is already currently productive - so wishing a productive area could have lower land prices is a bit of a non-starter. The limiting factor for the prices isn't policy, it's the availability of land (here Texas cities have a big advantage over coastal California ones that have to deal with mountains and oceans). DFW airport is over half the size of the whole city of SF, and larger than Manhattan. That sort of excess of availability is how you end up with cheaper land.
They unlock capital for homeowners by giving them something to borrow against.
In my 1980 built neighborhood there are three kinds of homeowners.
1) Low income longtime owners who can't renovate and are being replaced
2) Long time middle income residents who can't cash flow remodel but who can afford to borrow thanks to high appreciation.
3) New, affluent owners who buy houses that have been renovated or buy a house and cash flow renovation or take a massive mortgage (again largely backed by the high land value) and renovate.
If your community's land prices haven't appreciated significantly then a lot of the capital you would access for refurbishment isn't available. That removes in place renovators and your community faces two fates. Slow blight as original owners exceed their most productive years or replacement as affluent buyers move in.
