Mello Roos In San Francisco: What Buyers Need To Know

Buyers in San Francisco focus generally on price, HOA fees, and property taxes. Very few ask about Mello Roos. 

What Mello Roos Actually Is

Mello Roos is a special property tax assessment authorized by the Mello Roos Community Facilities Act of 1982. It funds public improvements and services in designated areas called Community Facilities Districts, often referred to as CFDs.

This tax appears on your property tax bill separate from the standard 1 percent base rate under Proposition 13. The amount, structure, and duration are set when the district is formed and vary by location.

Mello Roos is a special tax tied to financing infrastructure and public improvements in specific districts. In a city that builds up more than out, some newer developments fall within these districts and carry meaningful additional costs.

Why It Exists

Proposition 13 capped how much property taxes could increase. While it protected homeowners, it also limited how cities could pay for new infrastructure.

Mello Roos provided an alternative. Local governments and developers can issue bonds to fund roads, parks, utilities, transit improvements, and other public facilities. Property owners within the district repay those bonds through annual special taxes.

In San Francisco, Mello Roos is most commonly tied to large scale redevelopment areas rather than traditional residential neighborhoods.

How Mello Roos Is Calculated

There is no flat statewide Mello Roos rate. Each Community Facilities District sets its own “Rate and Method of Apportionment.”

Common calculation methods include: 

• Based on lot size or unit square footage 

• Based on parcel characteristics defined in the CFD documents

• A flat amount per parcel or per unit

And Mello Roos is not tied to market value. Two condos with similar prices can have very different tax bills depending on whether they fall inside a CFD.

Some districts have fixed assessments. Others allow for annual escalations. Most CFDs are structured to last 20 to 40 years, depending on how long it takes to retire the bonds.

How Long Mello Roos Lasts

Mello Roos stays in place until the underlying debt for the infrastructure has been paid off. Once the bonds are retired, the special tax can expire.

The timeline is district specific, so it is important to confirm how many years remain on a particular property’s obligation.

Where Mello Roos Shows Up in San Francisco

San Francisco is not like suburban master planned communities where Mello Roos is widespread. But there are specific pockets where it materially affects ownership costs.

The most notable is the Transbay Community Facilities District, created to finance major infrastructure and redevelopment tied to the Transbay area.

Some newer condo buildings in South Beach and Yerba Buena fall within this CFD and carry significant annual special taxes.

San Francisco Condo Buildings Commonly Associated With Mello Roos

Buildings frequently associated with the Transbay CFD include:

• The Avery, 488 Folsom Street 

• Mira, 280 Spear Street 

• 181 Fremont

• One Steuart Lane

The exact Mello Roos amount varies by unit based on size, building characteristics, and the district’s calculation method.

South Beach Condo Buildings That Generally Do Not Have Mello Roos

This is where buyers often get confused. South Beach includes both CFD and non CFD buildings, sometimes just blocks apart

Well known South Beach buildings that are generally outside of Mello Roos districts include

• The LUMINA, 338 Main Street and 201 Folsom Street

• The Infinity, 338 Spear Street and 301 Main Street

• The Metropolitan, 300 Beale Street

• The Harrison, 401 Harrison Street

• One Rincon Hill

• The Brannan

• 200 Brannan

These buildings are often attractive to buyers who want full service amenities or newer construction without the added layer of CFD taxes.

FAQ

Q: Will Mello Roos increase my total tax bill

A: Yes. It is additive to standard property taxes and any voter approved bonds. It should be included in monthly cost planning.

Q: Does Mello Roos affect mortgage qualification

A: Yes. Lenders factor recurring tax obligations into debt to income calculations.

Closing Thoughts

Mello Roos is not inherently bad. It funded real infrastructure that made many of San Francisco’s newer neighborhoods possible.

And it is a real cost that many buyers overlook. Bringing this conversation into the due diligence phase, before writing an offer, leads to clearer decisions and stronger negotiating positions.

Understanding how Mello Roos is calculated and where it applies helps buyers compare properties accurately and avoid surprises after closing.