But what if they don't want to leave? Many of these people have lived here their whole lives. If they must leave due to the market, I'd argue that's being forced out. Even if they do make a tidy profit.

Anecdotal, but I've heard this is happening in Hawaii now with vacation home prices skyrocketing, causing natives to get stuck with property taxes they can no longer afford.

So random contrived example based on appriasals I've seen around here (east bay). House paid off a while ago, paid $250k who knows when, property taxes $4k/yr (prop 13), house currently could sell for $1.7M. Person is 65, kids have long moved out. Without prop 13 lets say they would pay $17000 property taxes, maybe less since it would be equitably distributed. So that's $13000 they need to find to not get kicked out.

You say they don't want to move out, can't they simply refinance? Take out $1M against the house. Then draw down on that money to cover the excess taxes you owe and pay the mortgage, this should get you 20 more years in the house, maybe more depending on how the market plays out, could be less if there is a recession but then you the alternatives are you lost the house already since you couldn't afford the higher taxes or the current system where all the new comers/people who relocate are covering for you.

It's sad. But it's also for the greater good. Capitalism automatically makes the most efficient use of land through the use of property taxes. It's also the only reason we have cities at all- all development necessarily displaced people living in lower density structures.

Cities change. It's inevitable. If you can't make use of the resources your city or town provides and someone else can then you are forced out. That's a good thing for society overall and it benefits you too.

That's weird - I was just in Kauai, and every third house has a "for sale" sign on it, which would indicate a strong buyer's market - i.e. downward pressure on home prices. Probably folks who bought with the intention to rent out to vacationers, but there is a glut of vacation rentals due to AirBNB.

The solution there is to restrict operation of vacation rentals to certain neighborhoods, limit total percentage of housing stock allowed to be converted to vacation rentals, extra property taxes on vacation rentals (versus regular rental properties, which still contribute to housing stock). If you make vacation rentals more expensive to own, you drive down the ROI on them and make them less attractive to investors.

But if they have family or regional business networking connections, they would make money on the house and have a life reset everywhere else.... all to sell a house at market prices that are just has high as the other high priced properties. I'm skeptical that the added turnover will do much more than shift the demand curve by a negligible amount while putting people out of their homes.