I moved to SD from Ohio in 98 and remember seeing then a lot of developments touting “No Mello Roos!”, so my assumption is that the builder can pay it off and use the lack of MR as a marketing incentive to sell homes.
I think that they pass those costs onto the buyer in an up market when they know they can get away with it and people will pay it. But the builder will absorb the costs in a down market when they know that they can not get away with it and it is a detraction for buyers.
I bet as the market gets worse for new homes, we may see builders reduce or remove mello roos. Hopefully . . .
