[mdlevinson]

Prop 13 affects the baby boomer point in California. Even with huge amounts of equity tied up in their homes, older people can't afford to sell because their tax bill when they downsize will dwarf the gains they make by cashing out. Also, the fact that their kids can inherit their tax basis (a grossly unfair dynastic tax benefit that should be repealed) makes people do whatever they can to stay in their homes. The result: that much less supply, higher prices, and the young subsidize the old and rich with their property taxes.