> The land will not disappear, it will always be there.

The land might not disappear, but it can very easily be rendered unfit for purpose through misuse or neglect.

Let's put this in concrete terms. Say we have a plot of land which is suitable for various kinds of development. We have a prospective buyer who is looking to build a house. They like this property the best but there are several other suitable options; let's say they'd be willing to pay $25k, but not $30k, to acquire this land as the site for their home. The home will be worth perhaps $250k (not counting the land itself) with an expected lifetime of at least a century with proper maintenance, and effectively can't be moved once build.

Development trends in this area suggest that in perhaps ten years' time there will be demand for some sort of commercial development—office space, retail, services, whatever. They aren't here yet, but if trends continue then 10 years from now someone would be willing to pay up to $100k for this piece of land. (The other sites that the first buyer was considering for their home would not be suitable for this purpose.) However, they're not going to pay $250k extra for a house that they're just going to have to tear down to make room, even if the owner of that house were willing to uproot their family and move somewhere else.

Without speculation there is no reason not to sell the property to the first buyer for $25-30k and let them build their house. However, this represents an economic loss of at least $70k ten years later (the $100k value to the future developer minus the $30k maximum value to the residential buyer) since the land is no longer available at that time for the commercial development. To make it available at that point would cost around $250k just to offset the value of the house, plus the cost of tearing it down, never mind the hassle of moving the family.

With speculation, there is someone bidding say $75k for the property and the residential buyer picks one of the other available properties instead—perhaps not their first choice, but a good enough alternative. The speculator limits the use of the property to such things as can easily be removed in ten years to make way for the anticipated commercial use. Perhaps that means leaving it empty, though it could also be turned into a park, short-lease retail space or transient housing, something that could easily be cleared up to make room when the future demand materializes. Then, if all goes well and they predicted the market correctly, they sell the vacant property for $100k and make their well-deserved profit.

Of course, it may not all go well, in which case they'll be forced to take a loss. Speculation only pays when you make the right predictions.

> Government on behalf of the community can hold it just as well without the incentive of preventing others of using it.

If government correctly anticipates that the land will have more value in the future, they can act like a private owner and buy the land and hold it until that use materializes. Where this breaks down is that the government isn't risking their own capital in the process; if they are wrong and the value of the land decreases instead it's not the government that pays the price, but rather the public. Which means they have less incentive than a private owner to accurately predict the future value of the property, and are more likely to lose money on average. When they do lose they don't go bankrupt; they just take more money from the public via taxes. This is merely an inefficient, socialized, and corruption-prone version of private speculation fueled by public funds.