Holding costs of land are far from $0 in any major metropolitan area. Sitting on it involves its own form of risk.
Vacant land that's desirable is often held back from development due to zoning or infrastructure issues.
> Vacant land that's desirable is often held back from development due to zoning or infrastructure issues.
Nah, it's mostly speculation. Zoning/infrastructure issues get baked into the price. If you cannot build anything on a plot of land, its price falls.
Only at point of buying. If you buy some land and the mayor suddenly implements rent control then the value goes down.
Sitting on it is a predictable cost, while building means a costly chaos which may or may not turn out the wished profitability. So when you are used to "old profits" you maybe rather wait on the predicted do-nothing-cost, and hope for the tide to turn again in your direction.