It's interesting to me that such a universally easy sell as, "no new taxes" can result in such a distorted and, IMO, grotesque unintended consequence.
It's even simpler than that. Had a conversation with a man who owns some tiny 60's vintage apartments on an ocean-view lot. He turns down market-rate offers from developers looking to put in family-size units because with his Prop. 13 tax tailwind, he makes out well enough despite the lower rents.
Nothing to do with density, although there are numerous county and local laws on density zoning (which is not Prop 13)
Of course, it has been 1973 when this happened and I think only twice has the state government tried to changed it by “stealthily titled” proposition and failed.