The point is that home owners have the very strong and perverse incentive to stop all new construction under prop 13. Currently, their homes appreciate 15% each year while their taxes move less than 1%. They are minting money with no down side. New construction means they make less money, plain and simple.
| In fact, I would argue that more home ownership would be a lot better than rent control...
This may be the case, but its an experiment that will never happen. SF is at an extreme housing deficit, and refuses to build new housing commensurate to its population growth (1 unit per 10 new people for the past decade). Prop 13 is a large part of the problem - minus squeezing, home owners have no incentive to allow new construction.
Disclaimer: I don't live in SF or Bay Area, but visit for work often.
That said, I do live in a place that is fairly constrained on new development, but not as badly as SF. For my part, the lifestyle that makes both of these places so appealing includes a certain level of density, but not much more than that. It's hard for me to fault people who bought their properties for defending the lifestyle they bought into.
On the commercial use of prop 13, I would tend to agree that it's not the best idea today. I am entirely against means testing and such for personal uses, including non-primary residences.
A simple use case for non-primary residence non-commercial use is if one is taking care of elderly parents. Should the parents be forced out of their home because their child happens to own the property? This is not commercial use to me either, unless rent is being charged of course.
The problem with that line of reasoning is that 15% increase isn't immediately available to the homeowner. To turn that into cash, they have to move. I imagine many homeowners could simply just not afford an uncapped property tax hike.
Part of the attraction of homeownership is security, in that homeowners aren't subject to fluctuations in the rental market. Prop 13 helps to reinforce that security, delaying the property tax increases to the point where the homeowner would be able to afford them -- at moving time. It's certainly not perfect, but I'm not convinced repealing prop 13 is the answer.
Perhaps a hybrid approach: live-in owners are subject to prop 13 caps on increases, but rental properties are not? Coupled with a repeal or loosening of rent control would allow landlords to pass on at least some of that cost increase to renters, which I think is a reasonable thing. Again, not perfect, but perhaps an improvement.
| In fact, I would argue that more home ownership would be a lot better than rent control...
This may be the case, but its an experiment that will never happen. SF is at an extreme housing deficit, and refuses to build new housing commensurate to its population growth (1 unit per 10 new people for the past decade). Prop 13 is a large part of the problem - minus squeezing, home owners have no incentive to allow new construction.