What Is Mello-Roos All About?
Many new home neighborhoods are located within a Mello-Roos district or Community Facilities, which is established to provide for essential community facilities like schools, parks and roads within a specific area. The name is taken from the Mello-Roos Community Facilities Act of 1982.
Why Do We Need Mello-Roos?
Mello-Roos districts were created as an equitable way of funding these essential community facilities without having to raise new home prices in a particular area.
Prior to the passage of Proposition 13, California cities paid for most public facilities to serve new residential neighborhoods out of the property taxes to cover the cost of these improvements, it has become the responsibility of new communities to absorb the costs. Before Mello-Roos, these cost were added on to home prices, making homes unaffordable for many families and often making it necessary for those who could afford the new homes to wait until large numbers of homes had been sold before parks, schools and other facilitites were built.
How Does A Mello-Roos District Work?
Mello-Roos Community Facilities Districts are formed by local public agencies such as cities and school districts, which then sell bonds to fund construction of public facilities and ongoing services. With this advance funding, schools and other facilities can be built early in the life of a new community, rather than years after families have moved in. Assessments levied on every property owner in the district - except tax exempt property owners like schools and churches - provide the money to pay off the bonds over a specific period of time.The Playa Vista Mello-Roos tax is usually included the property tax bill and the tax stays in effect as long as needed to repay the principal and interest on the special bond along with any reasonable administrative costs, but it's limited to 40 years.