How are you calculating the value it had when “we” bought it

Literally how much you were willing to pay. That's it's. (Technically also how much the previous owner/builder was willing to sell for; but that's also how much they would pay in an indirect sense)

if you reduce prices

And if prices reduce on their own? I've sold for less than purchase twice. It sucks. But I could have rented and not accepted that risk.

and some will get killed.

If you get killed, it's because you tried to invest in something that shouldn't be an investment?

You know who really gets killed? People who buy a home, and then that home has major defaults, and the repairs are 50% of the purchase price 5 years in, and insurance doesn't pay because it's a building fault, and the builders down pay because they rotate companies every year, and maybe you'll be able to sue the city who neglected their inspection duties or the insurance of the builders and architects but that file is still ongoing 4 years later, and even if it is successful will maxed at an amount that will only cover 30% of the work.

But that's a risk of home ownership, and I could have rented to avoid those risks.

I policy like this may ignore them, but housing prices can reduce on their own without any government intervention...

I've sold at a loss twice. It sucks. But that's a risk of ownership. I could have avoided that risk by renting.

Your house is only worth however much the next person will pay for it. They are under NO obligation to pay you more than you paid.

Artificially reducing building supply while people cannot afford to rent or purchase is pretty fucking shitty. "Oh hi Bob, it really sucks that you are spending 60% of your income on a place to live; but the ethereal value of this thing I bought keeps going up, and I would love for it to continue going up, even though the future is completely speculative and the whole thing could go tits up and skyrocket again no matter what we do; so I'm going to keep supporting policies that keep the line going up"

Bonus point for undertaxed homes, and suburban regions that survive on pushing the ponzi scheme further out or leeching on city core taxes; for LVT is a whole other kettle of fish.