It's the land value tax that incentivizes more efficient use of land. A property tax is levied on both the land and the improvements built on top of it. By only taxing land, the land use tax incentivizes maximizing the improvements-to-land ratio.

Improved land tends to draw more from community resources. If we just tax the land, someone builds a huge apartment building, then it really sucks for the local schools.

Additionally, much speculation is in post improved land...e.g. apartments; they have to do something with their property also, not just build it up. Otherwise its a drain on the economy and distorts the real estate market.

An appropriate land value tax is proportionate to what improvements the community expects to be present on the land on average -- that is, how desirable the area is as a whole. That should scale pretty well on a school district level.

As for discouraging speculation, property and land tax schemes can both be used. However, in an environment in which other landowners are improving, the tax burden of a speculator just sitting on their property goes up under a land value tax.