[mahyarm]

Prop 13 makes houses a net negative on city budgets, so there is a financial incentive for cities to reject new housing units, while encouraging development of hotels and commercial properties which are net positives.

Prop 13 also induces people to not sell their property, or convert properties into more units like you, so there are less available units on the market, which increases prices even further.

For example go look at SF or LA vs Miami on Redfin and see the stark difference in how many units are for sale at one time.

Higher property taxes encourages people to sell their properties if it's not economically worth it anymore to hold the property and give it to people who would actually use it. And it also encourages them politically to build more housing so their property tax bill does not go up too much.

[soft_serve]

"Housing" and the housed population that lives within my city (Sunnyvale) is not a net negative.

[mahyarm]

So your saying that they don't lose money on new housing units, but gain it?

If the city doesn't make enough money, then it become bankrupt. Roads, schools, sewers and police can't function properly anymore. The money has to come from somewhere!