If there are enough rights for a profitable building project on the lot, the land will increase in value by about the amount of the expected profits. The owner will be assessed for this higher value, and the city will benefit from higher taxes, before the first foundations are laid.
There are some paradoxes, though... If a city decides to "improve" all of its lots, it leaves nothing for the public sphere - parks, recreation, public buildings, even roads and paths. Not much of an improvement. The first goal of city planning is to set aside a percentage of the land for public use.
In new neighborhoods in Israel, 50% of the land is set aside at the beginning for public uses. This usually results in a sparse semi-urban environment with wide roads, ample parking and green space. Tel Avivians know it as Ramat Aviv.
Older areas of the city are denser, with only 25% to 35% apportioned to public use. These are the areas that have the most recognizable urban character.