This is a question I get asked, alot, especially from: 1) First time home buyers and 2) buyers NOT from California. Now, like most of you, I would try to circumvent a buyer from buying in a Santa Clarita Mello Roos district because I also couldn’t understand WHY would anyone want to pay MORE to live in a similar Santa Clarita community. I’ve had a 360 degree turnaround since. Let me tell you why.
First…..The term Mello-Roos derived from the names of its co-authors, Senator Henry Mello & Mike Roos. It’s also known by the term Community Facilities District Act (CFD). The CFD started when people in California voted for Proposition 13 in 1978 to limit property taxation. Therefore, new initiatives were considered to finance public constructions and improvements. In 1982, the California State Legislature made Mello-Roos legitimate. But, we didn’t see it commonly until the building of the Stevenson Ranch neighborhood in the late 1980’s. Bonds are issued to help fund the community infrastructure (such as: police services, schools, roads, ambulance and fire protection services, utility connection, sewer lines, and streetlights). Once Mello-Roos is established, residents must repay them in order to fund ongoing projects. A special tax is assessed to the homeowners as the repayment method and levied yearly. When you get a property tax bill, you will see near the bottom the break down and a “CFD” which is the Mello Roos amount.
- -Advantages of a Mello-Roos: New schools, parks, recreation centers, and more can be built and funded using the revenue generated from the Mello-Roos income. And more housing inventory will be created when undeveloped locations are built up.
- -Disadvantage of a Mello-Roos: Housing cost may be increased because of the tax, possibly limiting the amount of prospective buyers when it comes time for resale.
- -How Long Does Mello-Roos Typically Last? The length of time varies. 15-25 years from the original build date is somewhat common. Rarely does it extend beyond 30 years.
Tripp Jones Real Estate for Santa Clarita and San Fernando Valleys, Call 661-733-4555 or 818-527-6292