Government Gain

Dennis Sundstrom’s Speaking Out was interesting as far as it went. However, his credibility might be suspect if all of his comments are as incomplete as his statement on the Mello-Roos Act.

For example, it is true that the Mello-Roos Act requires a two-thirds vote. But in most cases where it has been used, the developer files an application with the county under the act and since he owns all the land, he has three-thirds of the vote! It is my understanding that where Mello-Roos has been put to a vote of the people, it has been voted down.

I have found that after discussions with representatives of developers/builders and two different county assessor offices, where Mello-Roos does apply and thus the various facilities mentioned by Sundstrom are financed via bonds rather than by the price to the home buyer, there is no one who can verify that the price of the house is less than it would have been without application of the act. The word is that once Mello-Roos applies, this latter aspect will be “monitored by the market.”

Sundstrom’s article asks who’s to blame for high housing prices. Of course, he is a developer and he wrote the article as chairman of a nonprofit organization of the real estate industry, set up to educate the public. Education should include all aspects of a subject. Do we always have to have the fox tell us how many chickens are in the henhouse? Maybe we need a HUD-type audit of the entire industry.

Why no comment on builders who allocate a number of new houses to their employees, who may well be in the speculation business?

Why no comment on speculators as contributors to the new-house price?

Why no comment on builders who increase the price of new houses with each release of each new phase, even where releases are but a few weeks apart, when the land has been owned for some time, the facilities ae in (or at least the costs are included)?

I know, free enterprise! But don’t put all the blame on taxes. (Proposition 13, developer fees, etc.)

Rather than beat this badly maimed horse, I’d ask this question: Is the house to which Sundstrom would apply Mello-Roos going to be cheaper to the consumer than the house where the “developer is charged for” such facilities (though we realize the cost is in the price of the house to the consumer)? If not, why is this mentioned as a big factor in the cost of housing?

GEORGE A. ABBOTT

Laguna Niguel