> Problem being, a lot of people would get absolutely screwed by that, and end up losing their home.

Would there be many? Certainly, there were some cases pre-prop 13, but prop 13 wasn't narrowly focussed on protecting homeowners. Those were exploited as pretext, they weren't the motivation.

And you could make it protect homeowners while fixing the local government incentives by providing a refundable state income tax credit for 100% of the property tax due to assessed value increases beyond the existing Prop 13 limits. You could do this without or without, modifying the 1% fixed rate.

If you don't want that big of a subsidy, you could just allow homeowners to defer without penalty the excess amount until transfer of the property. Still stops people from being priced out of their homes.