[ethbro]

And to bear specifically on the sub-point that blights the Bay Area -- by removing increasing property taxes, you are removing market pressure for highest and best use.

Another way to think about property taxes is that they're annual nudges to encourage best use of the property.

Without that pressure, as TulliusCicero notes, why would I ever sell before retirement? And furthermore, why would I even try to make money off the property (say, by renting)?

That's probably not in the city's (as in, all the people living there) best interest to have a substantial portion of homeowners so disengaged from the actual market.

PS: Which isn't to say there aren't gentrification and affordable housing debates to be had. Simply that Prop 13 doesn't really help with that -- it just removed risk from those who are already homeowners.