In California, property taxes are assessed only when the property is sold. So people have an interest in seeing their "investment" become more valuable. Their taxes are the same either way.
In Canada, property taxes are assessed as a fraction that results in the city budget being met within constraints. Rising house prices for YOU vs. everyone else would result in higher property taxes, but a rising tide lifts all boats. The city budget and the relative worth of your home to your neighbors' determines your fraction.
Now, inflation on the other hand, they now have a vested interest in, as it makes the loan easier to repay.
This all goes out the window if you're buying a new house every 3 years, of course.