I don't disagree, but...

> Property taxes could be cut, or decoupled from property values (e.g. poll tax), but that never happens.

Couldn't the total property tax take be set to be proportional to incomes, shared between households in proportion to property price?

> If the risk really is high, there is no practical insurance available, and all purchasers are rational, then the price may go to zero.

Rational purchasers might reason that:

1) they need a home

2) unless they own a home they'll have to rent

3) even an uninsurable home could be expected to be habitable for a while

4) if rent for the duration of expected habitability exceeds transaction costs and property taxes for some uninsurable home, it could be worth a nonzero amount