[larsiusprime]

In California Prop 13 makes it so people who bought their properties decades ago essentially have their assessments frozen whereas people who bought more recently get assessed closer to market value.

This means that two side by side buildings can have assessed values differing by orders of magnitude. This has all the inequitable downstream consequences you would expect.

[rented_mule]

Yep, and that's one of many parts of the supply issues in California. We bought our house 25 years ago. The house right next door is half the size of ours and just sold. Their property tax will be ~3x what ours is.

We might consider moving to a looser market, and therefore opening up one more house in a tight market, but we're retired and a large increase in property tax (plus potentially larger increases every year if it's outside California) is a serious disincentive for us.

Prop 13 is friction that resists the smoothing out of conditions across regions. It reduces market efficiency.

p.s. - It doesn't help the housing situation that we have access to incredible natural features all around us, but that's more about California's demand side.