Not only has the builder abused this but also have the city and county. The builder passes the costs on to the buyer and city and county happily have taken the increased tax revenue even though, as you pointed out, the infrastructure cost basis has not increased proportionate with the home prices. And as many of you have pointed out, the buyers were enablers and willingly paid and allowed it to happen.
To my knowledge, unfortunately there is no mechanism in place to curtail this abuse by the builders/city/county. And they will continue to do it and get away with it as long as the market will bear it. As has been demonstrated previously in the 80s/90s and again today, builders will either pass on the mello roos or absorb it based on the state of the market and a buyer’s willingness to pay it. We are in need of real estate tax reform!
It is apparent that Pardee is not selling these homes at a loss and has enough margin to cover the $150K or $200K in mello roos and still turn a profit. Otherwise they would not do it, they will act in whatever manner best serves their financial interests.
Bill, I am no mello roos expert, but my understanding was that you always had the option to pay all of the mello roos up front and it should have been made available to you. I do not know the legalities or regulations around this. But you and the other buyers should look into it. Track down all of the filings for your Mello Roos assessment and the fine print. Pardee and/or the city and county may have acted illegally or bent the rules to best serve themselves. You should further peel the onion.
