Mello-Roos in OC

Our discussions of property taxes in Class 5 reminded me of a local tax district that I recently learned about. Some of my cousins have been getting married and recently bought houses, so when I went home for break, I learned about the reasons why they chose to live (or not to) in certain cities. One of the important factors was the Mello-Roos tax. Mello-Roos, or community facilities districts, are a way for developers to avoid paying upfront costs of constructing infrastructure by having a public agency bond pay for said infrastructure. Homeowners then pay off the debt by having additional fees attached to their property tax. I do not know the full extent to which these districts are used, although I do know they are relatively common in South Orange Count, CA. These taxes contributed to the sprawl of the county, as developers could use these districts to get infrastructure like roads and water to places that had been previously undeveloped. This differs from the special service districts we talked about in class which levy additional taxes that fund services to existing communities. In class we talked about how property taxes help fund things like schools, trash collection, etc. and that a reflection of good services can potentially be seen through higher property values. In this article from a few years ago, the sun-setting of some districts was projected to lead to an increase in home values. While many factors go into this, I think it reflects the difficulty in trying to collect taxes when residents are not seeing newer benefits and/or services from them. The infrastructure funded by the tax helped to initially attract people to neighborhoods (whether this is good or bad is another discussion), but the long term periods of the debt act as a disincentive and direct people to other similar neighborhoods in adjacent communities without it.