1) That's why I listed two points, rather than just one. :)
2) According to the Alameda County Assessor's office, the situation is not as grim as you seem to paint it (for every situation except the "building flattening" situation):
"Only the portion of the property which was newly constructed is subject to reassessment at market value. For example, if a family room is added to an existing home, only that portion is reassessed and the existing home will retain its previously established Proposition 13 base year value." [0]
This might partially explain all the damned San Francisco apartments with funky vintage 1970's-era single-paned windows. :P
> To the extent that they could, where would the sense be in that?
To encourage the build-out of housing in an area that has roughly between three and ten new people move in for each new housing unit constructed annually?
1) It's not like SF is currently starving for cash.
2) In the -very, very unlikely- scenario that only the ultra-wealthy, pensioners, and property "investors" occupy San Francisco, what happens to the tax base? What happens to the character of the city?
[0] https://www.acgov.org/assessor/about_property_assessment/new...