Example: If you bought a property at $500K 5 years ago, it would be eligible for a maximum assessed value (under Prop 13) of increasing by 2% per year. Any amount that it falls below that, it can drop to whether requested or granted without request.
Maybe some informal pron might be better:
max actual actual
assessable market assessed
value value value
year 0 $500,000 $500,000 $500,000
year 1 $510,000 $515,000 $510,000
year 2 $520,200 $490,000 $490,000
year 3 $530,604 $540,000 $530,000
year 4 $541,216 $540,000 $540,000
year 5 $552,040 $540,000 $540,000
Assessed value can go wildly up or down, but hits a ceiling at the max assessable value.
-IR2