[nostrademons]

It's interesting to trace the impact that Prop 13 has had on further policy choices and subsequent culture.

Prop 13 caps property taxes at 1% and also limits the increase in assessed value to 2%/year. In a region where housing prices appreciate by ~7%/year and that filters down into the basic cost of living for most municipal workers, this makes it impossible for local municipalities to balance their budgets without a steady influx of new buyers. The only way they can bring their tax basis up is to ensure that new homeowners buy in at ever-increasing prices, so that the tax basis can be reassessed upwards on purchase and the new homeowners can subsidize old homeowners who are paying well below market rates on taxes. Local municipalities in turn control planning and zoning, and so they pass zoning codes and approve projects on the basis of what will increase assessed values and hence tax revenue the most. This further exacerbates the housing shortage, raising inflation and increasing the need for ever-increasing home values even more.

Basically CA voters enshrined a pyramid scheme into the state constitution in 1978, and it's filtered down into every aspect of the state's economy by now.