Given the scale the only sane way to unwind it is to grandfather all sales before a certain date. Otherwise you’ll have masses of people forced out of their properties and chaos.
I mean, there are many solutions to this which aren't an immediate hike in property taxes which would cause much market disruption. But its important to acknowledge that the California Housing market is indeed a market distortion on an Epic Scale. There is just no way that everyone can get the prices they're asking for. And this is perhaps the major reason why I won't personally invest in the CA housing market even though I love the state otherwise.