Prop 13 causes all sorts of issues. Many people want to move (kids moved out, changed jobs, etc.) but they can't because they would not be able to afford the huge jump in property taxes.
It's just another thing that creates artificial scarcity.
The people who want to move but can't afford to are the exact same people who would be forced to move without prop 13. At least with prop 13, people are not forced out of the homes they have purchased.
The problem is not with Prop 13. It's with property taxes at all. I'm not fundamentally against a wealth tax of some kind, or against cities raising income, but if you base this on assessed values of real-estate, a highly illiquid asset for most people, you are guaranteed to generate these problems, not to mention undermining the very notion of property.
The problem is not prop 13. It is that something else should be taxed instead of property.
It's just another thing that creates artificial scarcity.
Note this also affects commercial real estate!
http://en.wikipedia.org/wiki/California_Proposition_13_(1978...