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Old 06-14-2018, 02:42 PM
 
2 posts, read 1,089 times
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I'm in the city limits of Houston- and receive city of Houston utilites. So why the hell am I paying MUD taxes?

And I looked it up & all the MUD income is going to pay back developer "loans"

Is this legal?!? Or is it just a way to get money for developers- so they have all profit-no risk?
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Old 06-14-2018, 03:06 PM
 
8,275 posts, read 7,949,093 times
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MUDs are a way for developers to limit the amount of money they have to invest upfront for infrastructure because the developer can issue bonds instead. Theoretically, it keeps house prices down, but the trade-off is higher property taxes for decades.

They are also a way for attorneys to make a lot of money. While MUDs are ostensibly run by a board, in reality almost all of them are opaquely operated by law firms.
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Old 06-14-2018, 05:58 PM
 
Location: Dallas/Ft. Worth, TX
3,072 posts, read 8,417,498 times
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Quote:
Originally Posted by ChillyDane View Post
I'm in the city limits of Houston- and receive city of Houston utilites. So why the hell am I paying MUD taxes?

And I looked it up & all the MUD income is going to pay back developer "loans"

Is this legal?!? Or is it just a way to get money for developers- so they have all profit-no risk?

Yes they are legal and you should have been advised during purchase that the home is serviced by a MUD. The Texas Commission on Environmental Quality permits/regulates MUD's and you can read about them here along with a nice interactive MUD mapping system.


https://www.tceq.texas.gov/waterdistricts
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Old 06-15-2018, 10:43 AM
 
2 posts, read 1,089 times
Reputation: 10
I read the law- it is to bring utilities to areas that don't have the infrastructure. To encourage building. But if all my utilities are through the city- I don't get it.

p.s. I have friends in MUD districts & their water & sewer is through the MUD.
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Old 06-15-2018, 11:15 AM
 
Location: Austin
7,244 posts, read 21,814,092 times
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Many times it's because the city doesn't necessarily want to pay to bring the utilities to that area of their own city, so the MUD has to be formed in order to pay for the utilities to get there.
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Old 06-15-2018, 05:01 PM
 
738 posts, read 765,888 times
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MUD is because cities stopped funding new infrastructure out of utility payments so it's a developer cost. If you want to know why watch the movie Chinatown. It was the most corrupt part of government since you could campaign donate your way to rate payer funded large increases in property values.

The Developer can pay for utilities outright and roll it into the cash price of the lot or home or set up a MUD issue bonds and have it show up on the bill of the owners after they've already bought. In other words it's a way to make your house seem cheaper than it is. Houston agreed to provide services but didn't agree to assume your debt.
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Old 06-15-2018, 08:52 PM
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Location: Ohio
17,107 posts, read 38,116,197 times
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Quote:
Originally Posted by ChillyDane View Post
But if all my utilities are through the city- I don't get it.
The MUD tax is paying for the water and sewer PIPES that service to your neighborhood, because your developer didn't want to pay for them.
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