It's not like income tax where your tax bill only goes up when you get more money to pay it with.
If the value of your house goes up because you remodel the kitchen, then it seems fair that you should be able to pocket that value. You did the work, so your taxes should not increase.
If the value of your house goes up because the government opens a new light rail station nearby, then you did nothing to earn this, so it seems fair that society should be able to get higher taxes from you.
In a speculative bubble, you did nothing to earn the extra value, but---arguably!---neither did the government, so it is less clear cut.
I assert it's a problem with a non-trivial solution.
If you have a house built in 1902 in the middle of a big city, you're paying minimal taxes and find yourself surrounded by high-rises, it's very inefficient land use. Your lot could provide housing for hundreds if not thousands of people if another high-rise was built there.
Thus, you should either pay for your privilege (in taxes) or sell the lot (for a lot of money, presumably) to let other people use the space more efficiently.
However, I must say that a property tax itself is a wicked one and should be replaced by land value tax. Land is more valuable in the centre than in the outskirts of the city, so when properly taxed it creates the tendency to increase density of the highly taxed land and allows for more liberal land use where nobody else wants to build.
In contrast, land value goes up in the average if a lot of people keep building desirable buildings in what turns out to be a desirable district in the city. That promotes what people like. Consequently, inefficient land uses move further away from the desirable areas.
Implementing neither property tax nor land-value tax is not straight-forward in general and there are corner-cases that need to be sorted, but in general land use is what ultimately provides its value. Often property tax codes already incorporate parts of land-value taxing, but the intrinsic value of property to be taxed is debatable: what is the value (to the community) of a small, low-taxed detached house in the downtown versus a huge, high-taxed mansion outside of the city? The opportunity cost of taxing property might be huge.
Since you want them to move out so bad, why don't you have the government pay them to move out? I never see these local governments offer to pony up $10k or so for the moving expenses for people priced out of their houses to move out. These people bought a house in a town thinking it'd be a good place to settle down, not that they'd be forced out of their house in a decade or two. It's really no better than forced relocation, which is a form of genocide.
Being priced out of a market is not the same thing as genocide.
Population transfer is a different thing from gentrification is a different thing from eminent domain is a different thing from genocide.
You only get more people living and working in the area if you build more houses. If you do that, then of course you're going to have more property tax, even if the existing house values don't change at all. New houses = new property taxes. That's how you pay for the extra policing, not by soaking the existing residents.
1% is less than the inflation (even more so is the real estate is shooting up), this means that city spending will increase by more than 1% and that other younger citizens will have to pick up the slack.
The police can get their money from the property tax for any new residents who have built new houses.
If there's no new houses, then there's no net increase in population, and there's no need for more police, or more police buildings.
The City of New York is just building a new police station in an area that's been fully built up for roughly 150 years. http://www.dezeen.com/2016/02/01/big-bjarke-ingles-new-york-... I expect the Vancouver police department also ends up paying its officers extra to cover the boomtown rents.
(Not just police, of course. All public services.)
When my car wears out and I need a new car, I don't go to my boss and say "hey, I need money for a big down-payment on a new car, so I need you to give me a big raise." And then, 5 years later, come back to my boss and say "I need yet another new car, so I need yet another big raise to pay for it."
Instead, I save money over time so that when I need that new car, I have the money already saved up for it. In fact, I've saved the money because, over time, my old car has gotten cheaper to own (lower insurance, lower registration fees, loan paid off), and I've budgeted for transportation expenses over all that time so that the new car cost isn't a big surprise.
So please explain to me why the existing taxes for police services aren't enough for them to save up and budget and buy new buildings as necessary.
As for boomtown rents, that's not a problem either. The boomtown means that property values are skyrocketing, which means that property tax revenues are also skyrocketing, so they're already making more money without even having to raise taxes. So why do they need even more?
Perhaps the town of Starnberg is an instructive example. It's a small town in Germany which hasn't grown much in terms of population, but its property market has boomed, BOOMED, enough that the city's employees had problems. Rents increase, their salaries don't.
Last time I was there the local newspaper reported that for several years, the only police officer who worked there voluntarily was the chief. The force hadn't had a single application to any of its job postings for years, and all the old police officers had gotten better-paying work or moved to lower-rent towns. German police can be ordered to serve for a while, and the Starnberg city police force was composed of newly educated police officers who had been ordered there by the state, lived on 10m² while they had to, and who left Starnberg as soon as they were legally able to.
I understand the city council was trying to find some way to solve this. To pay the employees a sizable extra to compensate for the high cost of living. (Haven't followed the news there.) Anyway what employees said wasn't "I need another new car, so I need a new raise", they said instead "I need another new car, so I got a better-paying job, goodbye" or "I need another new car, so I'm moving, goodbye".