Why did Californians even allow the passage of Mello-Roos? (Oakland: homes, to buy)

[majoun]

Originally Posted by i_love_autumn

It sounds to me like Prop 13~ GOOD.....Mello-Roos~BAD

Why would any citizen feel ok about a 'back-door tax' slapped on them immediately after a proposition to restrict taxes is passed? I don't get that!

If not for Mello-Roos Prop 13 would have been repealed by now. It will be repealed eventually. I don't think Mello Roos will ever be repealed

[i_love_autumn]

Originally Posted by BRinSM

i would never live somewhere with mello roos either. the good news though is that as neighborhoods age, the mello roos will begin to disappear.

That's good to know,thanks.

[pacific2]

The devil is in the details and a rigid ideological stance against something can be costly.

A Mello-Roos home may be heavily discounted compared to a comparable house in a neighboring community. Both communities are upper-middle class and most kids from each city go to the same well-regarded high school. The more expensive home is then permanently saddled with higher property taxes and a higher mortgage.

Buyers should look at the actual Mello-Roos fees before deciding; and that's what's done by many purchasers. They crunch the numbers, while many others bypass Mello-Roos homes without looking at the details.

For example, this 3,400 sq.ft./5 bd/4.5 bth home is just 10 minutes from the beach, and has a canyon view. Still, it is only listed, taking the region into consideration, for $1,088,000.
48 Endless Vis, Aliso Viejo, CA 92656 | MLS# OC14028023 | Redfin

The person who buys it will be lucky, since he will pay far less than he would have in a neighboring "non-Mello-Roos" community; and the annual Mello-Roos tax of only $772.61 expires in 2 years.

[tygayolo415]

I don't like taxes anymore than the next person but Prop 13 and its subordinates didn't fix anything. Instead of higher property taxes, we have higher taxes on other things. So now we have ridiculously high real estate with lower than average property taxes. There's no free ride. Everyone pays one way or another. So many people will stick their fingers in their ears, close their eyes, and yell before being willing to see the truth of this matter on the basis of ideology.

I'll bet dollars to donuts that Prop 13 and its subordinates will be unwound in due time. All of those other taxes that were made higher to make up for the shortfall probably won't be adjusted downward to compensate.

[majoun]

Originally Posted by cim303

I don't like taxes anymore than the next person but Prop 13 and its subordinates didn't fix anything. Instead of higher property taxes, we have higher taxes on other things. So now we have ridiculously high real estate with lower than average property taxes. There's no free ride. Everyone pays one way or another. So many people will stick their fingers in their ears, close their eyes, and yell before being willing to see the truth of this matter on the basis of ideology.

I'll bet dollars to donuts that Prop 13 and its subordinates will be unwound in due time. All of those other taxes that were made higher to make up for the shortfall probably won't be adjusted downward to compensate.

If we didn't have low property taxes our real estate prices would be less outrageous.

The tax revolt would have done better for the state and its people if it had gone after sales taxes instead of property taxes.

[Ultrarunner]

I guess anything is possible... this is California.

The politicians said Prop 13 would never pass and it did with a groundswell of support way back in 1978 and with almost every politician against it!

I was too young to have voted for it...

I was not too young to remember people I know getting double digit tax increases... taxes in many areas were totally out of control AND several tax assessors ended up in jail or committing suicide for sweetheart deals for bribes.

Prop 13 eliminated volumes of assessment legalease... property values were no longer the subject of Assessor opinions or guesses of what their property might be worth... a few simply paragraphs replaced all that and it was called Prop 13.

Any examination of Prop 13 has to start when the State took control of local property tax dollars for public schools under the 1971 and 1976 California Supreme Court rulings in Serrano v. Priest.

It was one thing to pay higher taxes in support of local schools and quite another for local tax money to fund schools hundreds of miles away.

Love it or Hate it... Prop 13 works... if for no other reason than it requires voter approval for new Property Taxes/Assessments and the voters of my city have been very generous... my tax rate is 60% higher than straight Prop 13

As to the choice of higher sales taxes, income tax or property tax... give me higher sales or income tax.

I control what I buy and food isn't even taxed and the same for most services... so I choose with my buying dollars the sales tax I am willing to pay.

As to higher income tax... many pay little or no income tax... maybe if we all paid income tax we would all have skin in the game.

Property Tax was incidious pre Prop 13... it just happend and there wasn't a darn thing a person could except pay it or leave.

PS... there never would have been a Prop 13 if the State would have simply indexed the Home Owner Exemption. At one time the exemption was about 50% of a modest home and now it might be 1%

[USDefault]

Originally Posted by nightlysparrow

You know this, right?

"Special taxes and bonds used for Mello-Roos financing can only be issued by counties or districts in which two-thirds of the voters in the area have voted in favor of becoming a Mello-Roos district."

Get a clue. "Voting" in Mello-Roos districts is a total farce. A pure sham. You'll have one or two developers cast a "vote" in an undeveloped area and boom, Mello-Roos district. Laughable you would rely on this "vote" ruse.

Don't take my word for it, you'll find many reports if you do the research. Here's one:

Mello-Roos Law Allows Vote Of One To Decide On New Taxes

On Nov. 21, 2000, Harlan Friedman marked an "X” on a ballot giving the city of San Diego the power to issue $25 million in bonds and charge hundreds of homeowners thousands more in property taxes. Friedman was the sole voter in that election. At the time, he was a consultant for Black Mountain Ranch, a developer in north San Diego.

A state law, the Community Facilities Act, commonly called Mello-Roos, gave Friedman the power to solely decide whether the city could levy the new tax.

Friedman's vote has so far impacted 346 property owners in Del Sur, an upscale development in Community Facilities District (CFD) 4. . . .

A landowner vote versus a public vote is standard in forming Mello-Roos districts, according to an inewsource analysis of county voter registration records. It's a typical -- and legal -- sidestep around Proposition 13, the tax-limiting law passed by the voters in 1978 that mandated all new local taxes designated for specific purposes, like schools, are subject to a public vote.


Here's how Mello-Roos works:

Let's say a developer owns vacant land somewhere in San Diego and wants to build 1,000 new homes. The city requires the developer to pay for the roads, water and sewer lines and other infrastructure needs. The school district in the area can also ask the developer to help build a school.

California's Legislative Analyst Office lists what type of vote is required to raise taxes.

Mello-Roos allows the developer to form a CFD with either the city or the school district or both. A CFD can issue bonds and collect special taxes that will pay for the new roads and schools. And it requires a vote.

But most proposed developments don't have residents, and the Mello-Roos law says if there are fewer than 12 registered voters in a district, then only the landowners vote. Sometimes it's a single landowner, or the landowner's agent, like Harlan Friedman, who casts the only vote. . . .

In total, there were 244 requests mostly from cities and school districts for voter information for new or expanded CFDs. Of those, 209 had no registered voters in the district. Only 10 had more than 12 voters.

If the CFD is formed with only a landowner vote, the registrar is no longer involved and keeps no further record of the CFD process.

There are currently 232 CFDs collecting taxes in San Diego County. inewsource was able to trace voting records to at least 120 of them. Of those, 113 had no registered voters when the request for voting information was made.

Mello-Roos Law Allows Vote Of One To Decide On New Taxes | KPBS

[i_love_autumn]

Originally Posted by USDefault

Get a clue. "Voting" in Mello-Roos districts is a total farce. A pure sham. You'll have one or two developers cast a "vote" in an undeveloped area and boom, Mello-Roos district. Laughable you would rely on this "vote" ruse.

Don't take my word for it, you'll find many reports if you do the research. Here's one:

Mello-Roos Law Allows Vote Of One To Decide On New Taxes | KPBS

[tygayolo415]

Originally Posted by Ultrarunner

Love it or Hate it... Prop 13 works... if for no other reason than it requires voter approval for new Property Taxes/Assessments and the voters of my city have been very generous... my tax rate is 60% higher than straight Prop 13

As to the choice of higher sales taxes, income tax or property tax... give me higher sales or income tax.

I control what I buy and food isn't even taxed and the same for most services... so I choose with my buying dollars the sales tax I am willing to pay.

As to higher income tax... many pay little or no income tax... maybe if we all paid income tax we would all have skin in the game.

Property Tax was incidious pre Prop 13... it just happend and there wasn't a darn thing a person could except pay it or leave.

PS... there never would have been a Prop 13 if the State would have simply indexed the Home Owner Exemption. At one time the exemption was about 50% of a modest home and now it might be 1%

Prop 13 doesn't work in the context of property taxes putting downward pressure on RE values.

This is because property tax levels have artificially had the normal feedback loop short circuited whereby RE values and property taxes inform each other.

Had the market been allowed to exert its influence, the government would have been forced to make changes. That's how the feedback mechanism of a marketplace works. When the mechanism is fiddled with to benefit certain cohorts, mal effects are a result. In this case, high RE prices.

You stated it - people could pay it or leave. Enough people would have left and the government would have been forced to find the proper balance. Had people paid it, they would have been informing the government that the price was worth it to enough people who wanted to be here. There's an implicit assumption in your comment that somehow people leaving would have been a bad thing.

[Ultrarunner]

Originally Posted by cim303

Prop 13 doesn't work in the context of property taxes putting downward pressure on RE values.

This is because property tax levels have artificially had the normal feedback loop short circuited whereby RE values and property taxes inform each other.

Had the market been allowed to exert its influence, the government would have been forced to make changes. That's how the feedback mechanism of a marketplace works. When the mechanism is fiddled with to benefit certain cohorts, mal effects are a result. In this case, high RE prices.

You stated it - people could pay it or leave. Enough people would have left and the government would have been forced to find the proper balance. Had people paid it, they would have been informing the government that the price was worth it to enough people who wanted to be here. There's an implicit assumption in your comment that somehow people leaving would have been a bad thing.

I believe Government should not be in the place of displacing people simply due to the actions of others.

I've seen it first hand in Washington State where taxes went up 80% in one area simply because some fool paid a huge price for some waterfront land with big plans... it affected everyone in the area... sad thing is the guy lost it all when the bubble burst in Real Estate... it's almost like arbitrage.

Think about it... cars are taxed on value at the time of purchase... makes no difference if the value increases... the tax declines.

People have a choice to buy at a price or not... why should real estate be different and my home be subject to the whim of others?

Besides... people are able to move and downsize and retain Prop 13... so people are not locked into a home just for taxes if they retire and desire to downsize.

Even with Prop 13... homes in my part of East Oakland dropped as much as 75 to 80%... the home next to me sold for 510k in 2007 and in 2009 the bank sold it for 105k and in 2011 it sold for 200k.

Without Prop 13... my 250k assessment would have doubled to 510k because some fool was willing to pay that with almost 100% financing...

I'm thankful each day that those that came before me passed Prop 13 and the US Supreme Court has upheld it.