In the case of housing, agglomeration effects play the biggest role. A single family house in the middle of nowhere is very scarce, but it also has limited economic productivity[0]. Notably, that lone house isn't enough to support commerce.

It's also worth observing that land supply is a fixed constraint[1], and a platted parcel is what everyone should be looking at. The more inhabitants we can keep on a parcel, the more potential customers and employees we have for the businesses adjoining that parcel.

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0: In some models, it's also said that this house has limited utility, but I'm reticent to put this front-and-center on HN. I've nonetheless left it here as a footnote to split the difference.

1: At least, it's fixed barring, like, land reclamation, which is extremely expensive.