Not in California. https://en.wikipedia.org/wiki/1978_California_Proposition_13
The limit of 1% of the property value looks to be a deal killer here. Cities have an incentive to zone for very low density.
The limit of 2% increase per year is also a huge problem, but not specific to small lots. If inflation ever goes above 2%, disaster strikes all California cities.
Well, there is one other way. Forget about property taxes. Set them all to 0%. Get the required 2/3 majority vote to raise income taxes, then grant a big chunk of that to the cities based on the number of people living there. Perhaps a UK-style council tax would also work.
I'm not an expert, but I would think that holding period for smaller, less expensive, 'starter' homes is shorter than larger homes. If that's the case, you want to zone for that. But, zoning is more about not upsetting voters than grand fiscal planning, in my understanding.