Forget older Californians, you can get priced out of your house just from property value increases in the last decade! Also keep in mind that there's no great system for appraising houses. As someone who has bought two houses and sold one, the appraisal system comes down to "can I find a few houses in this neighborhood that have roughly equivalent room count and square footage that have sold in the last 6 months." So now you hate your neighbors for moving out, you hate the new neighbors for paying whatever market rate is, and you start having to figure out how to move to Sacramento and whether or not you'll be able to get a teaching, policing, fire, nursing, etc job there -- all this despite the fact that you may not actually be able to sell your house for even 80% of what the appraised value is.
What Prop 13 did was to say "the best indicator of the value of your property is the amount the market settled on at the last transaction". It also tries to cover some edge cases (the biggest of which is the McMansion remodel -- look at Palo Alto where $2M gets you a teardown and then you build a $6M house on the lot). Still seems reasonable to me, although of course it's not perfect.
Locking in the property tax rate is a reasonable policy for reasons you explain. But it should not have been extended to non-residential, non-owner-occupied properties, and also it should not have been transferrable.
But, being non-transferrable would exacerbate the low-turnover problem by preventing those retirees from downsizing for fear of a big property tax increase.
The problem is the last transaction might have been decades ago. This leads to some people paying several times as much property tax as their neighbors who own houses of similar market values, simply because their neighbors bought their homes years earlier. That's not reasonable.
It also means you could sell your home, move across town into a home that costs the same as the one you sold, and your property tax could quadruple. That's not reasonable either.
Both of those things sound imminently reasonable compared to the alternatives, at least to me. Both of those things are a product of choices that a market-participant made. The alternative pre-Prop 13 was that a non-participant was financially affected by the behavior of their neighbors. In the scale of reasonableness, this is less reasonable than life under Prop 13.
Homeowners are market participants. They benefit from increased home equity caused by increased market prices. They get to capture that equity when they eventually sell their homes, and in the meantime they get to borrow against it. And the homeowners who rent out their properties get to charge more.
Listen, no offense, but you're not going to convince me that it's cool to price people out of the homes they live in simply because they've been in them for 10 years and the market has moved that much. There's an older minority couple that live across the street from us who have been in the neighborhood for over 30 years now. Community like that is part of why we bought here. If my wife and I moving in means suddenly everyone has higher property taxes, I'd have a serious problem with that.
To me a "great" system would be independently verifiable. As in, you appraise your house and you then find you can sell it within 5% of that number. This is not how it actually works, though. The appraisal is often spot on the offer you got for your house, because the appraiser clearly knows the number they need to hit for the loan to go through.
Maybe the system is great for some slice of the market, but for owner occupied detached homes it's pretty shitty.
>The appraisal is often spot on the offer you got for your house, because the appraiser clearly knows the number they need to hit for the loan to go through.
You're talking about the appraiser hired by the lending bank (at your expenses). Their job is not so much "blindly come up with an independent valuation", their job is more to justify the selling price already agreed upon to the lending bank. It also makes sense to take into consideration a price both interested parties already agreed upon - that's important information when trying to determine what something is "worth."
The appraiser's real job is to protect the bank's money by ensuring that the house is sufficiently valuable to serve as collateral for the loan you are taking out.
What Prop 13 did was to say "the best indicator of the value of your property is the amount the market settled on at the last transaction". It also tries to cover some edge cases (the biggest of which is the McMansion remodel -- look at Palo Alto where $2M gets you a teardown and then you build a $6M house on the lot). Still seems reasonable to me, although of course it's not perfect.