If you want to have a government at all, you must finance it somehow. Usage fees can go a long way, but you most likely also need some general taxation. Taxing land value is the least bad thing to tax, because the supply of land is fixed.

Yes, you can see this alternatively as the government renting out the land. And that's a fine view. Landlords pass on the land, but also put buildings on top. What you pay monthly for your apartment is partially for the land (which would go to the government, indirectly) and partially for the building and amenities and maintenance.