I'm a property owner, but I don't really like the system. I also don't like how mismanaged the property taxes here are, but that's another thread.
So can rent-controlled rents, believe it or not.
And 2%/year increase isn't inconsequential.
Consider that the average inflation rate is 3-4%/year[1][2], and houses generally tend to increase in value at roughly the same rate as inflation[3]. Thus, your property taxes are expected to get cheaper in real cost every year, assuming the housing market is relatively stable.
Of course, in SV, the situation is much much worse than this, because housing prices have grown much faster than inflation due to the booming economy.
[1] https://en.wikipedia.org/wiki/Inflation#Measures [2] http://inflationdata.com/Inflation/Inflation_Rate/Long_Term_... [3] http://observationsandnotes.blogspot.ca/2011/07/housing-pric...