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Do You Pay Extra Property Taxes? Mello-Roos: Who’s Paying What (Video)

Are you paying Mello-Roos?

Aired 5/29/13 on KPBS News.

One in 10 San Diego property owners pays an extra property tax ranging between $35 and $8,700 a year. Find out if you're one of them.

— Unless you're paying it, chances are you don't know a lot about a tax called Mello-Roos. It's an odd sounding name for what has become a growing revenue source for developers, school districts and cities in San Diego County.

Special Feature Mello-Roos Database

Enter your address to find out whether you or your neighbor pays Mello-Roos.

Named after two legislators, Henry Mello and Mike Roos, the extra tax on property can range from as little as an extra dollar a year to nearly $100,000. The average is $1,826.

According to an analysis by inewsource, the amount collected in Mello-Roos taxes has grown in San Diego County from $106 million in 2004 to more than $195 million in 2012.

The tax was created in 1982, as a way around Proposition 13, to generate revenue for basic infrastructure needs in new neighborhoods, especially schools. Under Proposition 13, property tax increases are restricted and new local taxes are subject to a two-thirds vote of the people. But Mello-Roos landowners, usually developers, do an end-run around the public vote and partner with school districts or cities to form Community Facilities Districts (CFD) that can levy taxes. This usually happens with only the developer's approval because in most cases, the land in the CFD is not developed and there are no registered voters. Once the homeowners move into the newly developed neighborhoods, they are subject to the new tax for decades.

The amount must be disclosed when you buy a house and it’s reflected on your property tax bill.

Homeowners in Mello-Roos districts pay widely varying amounts from neighborhood to neighborhood, even homeowner to homeowner.

inewsource collected data from about 100,000 county properties paying the tax and created an interactive map detailing Mello-Roos payments house by house.

You can find out whether you pay Mello-Roos and whether your neighbor pays more or less by searching our database. Be patient, the search function takes about 45 seconds to find a specific address.

Evening Edition

Comments

Avatar for user 'collegegrad'

collegegrad | May 29, 2013 at 8:05 a.m. ― 1 year, 2 months ago

I don't think this is a fair and full characterization of Mello-Roos. When 100 new homes are added to a community, there is an instant burden to the existing infrastructure: schools, fire, police, roads, etc. Rather than having all of that increased cost imposed on developers as fees (which would add to the selling cost of that new home) developers made a pact with the devil and had the legislature create this new law allowing the infrasturcture burden to be passed directly to the home buyers as taxes for the next 40 years. Win-win for developers and the local government! Oh, somebody actually has to pay? For 40 years? Oops...

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Avatar for user 'duluoz'

duluoz | May 29, 2013 at 8:30 a.m. ― 1 year, 2 months ago

Homeowners are going to pay one way or another for the impact of new homes on infrastructure. Either the developer is going to pre-pay his fees and roll that into the cost of the new home or form a CFD, sell the home at a lower cost and then have the Mello-Roos sit on top of the new owner's property tax. Another way of looking at it is that Mello-Roos is long-term financing for developer fees that would otherwise be built into the new home price.

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Avatar for user 'CaliforniaDefender'

CaliforniaDefender | May 29, 2013 at 11:11 a.m. ― 1 year, 2 months ago

Mello-Roos was written by two Democrats in 1982 and Democrats have the responsibility of repealing that terrible mistake today. But will they?

The cost should be built into the home price. That will force developers to pay a greater share when the home's price exceeds market value.

But then Democrats are just as much in bed with developers as Republicans. So why should they? Proud of your government? There it is.

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Avatar for user 'sandiego92064'

sandiego92064 | May 29, 2013 at 12:43 p.m. ― 1 year, 2 months ago

Fair? These people have a choice to not pay Mello-Roos. They just don't purchase a house that has that tax. Of course, that means they will probably not have the upgraded, services, schools, etc. that come along with the additional debt.

I don't think any of these people are being forced to purchase homes in these areas....are they?

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Avatar for user 'CaliforniaDefender'

CaliforniaDefender | May 29, 2013 at 1:44 p.m. ― 1 year, 2 months ago

sandiego92064,

The issue is not the buyer, but the developer. They have a responsibility to fund infrastructure that their development needs/impacts. They can then pass the expense on by increasing the final price of the home.

The buyer can then negotiate the price. They can't negotiate a tax.

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Avatar for user 'sandiego92064'

sandiego92064 | May 31, 2013 at 8:22 a.m. ― 1 year, 1 month ago

I reiterate. Potential home purchasers have a choice to buy in areas with no Mello Roos. Of course those areas generally are not to the standard they are looking for in community, education, public services (that the developer is obligated to provide prior to pulling one building permit).

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Avatar for user 'benz72'

benz72 | May 31, 2013 at 9:31 a.m. ― 1 year, 1 month ago

If the rates are disclosed up front and they don't change I find it hard to complain about this. Read the contract before signing.

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Avatar for user 'philosopher3000'

philosopher3000 | June 8, 2013 at 8:43 p.m. ― 1 year, 1 month ago

At least Mello-Roos is a "VOLUNTARY TAX" based upon where you choose to live, but the reason such taxes exist is because 1978 Prop13 defunded state and local infrastructure, and protected land-holding corporations (such as Family Trusts) from paying their fair share of the costs of infrastructure (i.e. schools, hospitals, libraries, and other services). It is a way for the rich to get richer at the expense of the poor. Land-owning rich use corporations to hide their identity and avoid accountability for the costs of their impacts, passing on any taxes to consumers as a cost of doing business, while reaping the benefits of increased equity in their commercial holdings without actually doing any work. This is the definition of 'unearned income' and should be heavily taxed, as it is essentially free money given to the rich for buying up land first.

Why doesn't KPBS do a story on these truths? Because rich family-trusts are the biggest funders of "public" media.

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Avatar for user 'Grammie1991'

Grammie1991 | June 17, 2013 at 11:29 p.m. ― 1 year, 1 month ago

Mine is a nightmare. We moved here from out of state....never heard of Mello Roos, I was never told of them by the developer. They told my husband, but never disclosed the ammount - my husband was dumb, and never asked further. But you know, HOW would you know about something like this. Our Mello Roos are $46,500.00. We bought our home for $425K. I found out much later that our MR is this: About $4K per year, with a 5% interest rate. The payment increases 2% per year, and the payments go for 30 years. If I add all this up, I come up with over $130K "extra". Where on God's earth, would you EVER expect to pay something like that??? Where. And with virtually no information given to us. Its buried in our paperwork we signed when we purchased the home. People say, you should have done research. How in gods name would I EVER think of something like this, that is soooo out of this world high. We came from out of state and did not know about this. We only looked at homes in my sons city - we live in Lincoln, near Sacramento. And on top of all this, our city never put our parks in, or the school - and now all we look at is empty fields with weeds.

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