The key bit is that California is relatively unique here. There are a few other states that have Prop-13-like laws, but California's is the most restrictive and incumbent-homeowner-friendly. All those other states (and the ones with nothing similar) seem to get along just fine.

Of course, the solution to increased demand (driving increases in property market value) is to build more housing. Without Prop 13, a big chunk of the NIMBYs who are currently against more housing would likely change their tune if they had to choose between no new housing or much higher property taxes.

I think it would be reasonable and productive to phase out Prop 13 over time, rather than immediately getting rid of it. We could structure it so a property doesn't lose Prop 13 protection until the next time it's sold (and then it never has that protection again). We could completely remove the inheritance loophole (which was tightened up in 2020 but still exists). We could even set a date, say, 10 or 15 years in the future, when re-assessments at market value will start for everyone, regardless of whether or not they've sold. We could also phase in higher allowed assessment percentage increases over time (right now it's capped at 2% per year, but we could, say, add 0.5% to that figure every year for some number of years).

Hell, we could even leave Prop 13 in place as it is today, and just bump up the assessment increase cap to 5% or 10% or something like that. (Texas, for reference, has their own 10% yearly cap on assessment increases.)

There are so many ways to solve this, but all of them are politically unpopular. (Hell, we couldn't even reform Prop 13 as it applies to commercial properties.) As a homeowner in California, I get it, but I still support Prop 13 reform and eventual Prop 13 abolishment.

Most of the other states have not seen the rise in population growth and real estate values seen in CA. There are still places where homes are like 250k or less. There is also way more value drop off outside the metros in most other states with high cost cities such as MA or NY. You could be 30 mins drive from boston in a great 400k home. Try and find that 30 mins out from SF or LA. There just isn't really that fall off in california that you might expect from real estate markets elsewhere. It is like the rising tide has lifted all boats.