Nope. They can pass them to their kids, and it won’t trigger reassessment. > 60% of houses like that in the LA area are rented out for tax arbitrage reasons by the kids that inherited them.

They can buy multiple houses rent them out, and then let the kids live in them when they grow up.

Also, businesses can own multiple properties and sell them without reassessment (there is a well-known loophole involving shell companies that makes this possible).

Basically the only people that get hit by prop 13 reassessments this are young working families that need to upgrade, or want to buy into a stable housing situation to raise their kids.