Special County Taxes on New Housing Take Effect

A once-controversial Orange County plan to levy special taxes on new housing to pay for roads, schools and other improvements took effect without opposition Wednesday.

The Board of Supervisors, following a public hearing in which no one got up to testify, voted 5 to 0 to levy special assessments on new homes in the proposed Rancho Santa Margarita development in south Orange County.

Assessments will range from $315 to $775 per household, with an escalator clause providing for annual increases of 4% to retire an estimated $41.2 million in bonds.

“We are going into important new territory as to how we are going to finance infrastructure,” Supervisor Bruce Nestande said of the massive residential and commercial development planned north of El Toro and Mission Viejo.

The community will be the first in the county to begin financing roads, schools, sewers and other public facilities through special assessments.

Assessments will vary depending on the density of homes within the huge development. Single family homes on large lots would have the highest assessment, beginning at $775 annually. Assessments for multiple-family residences ranged from a high of $630 annually for medium-density developments to $315 annually for high-density developments.

Commercial properties would be assessed at the rate of 30 cents per square foot. Owners of undeveloped property would also be assessed a special annual tax of $2,000 per acre, plus administrative costs.

According to law, special taxes on such development above and beyond regular property taxes must be disclosed to buyers before sale or resale of the property.