Special Assessments in California

The use of special assessments in California is one of the longest value capture experiences in the United States. In this paper Dean J. Misczynski describes this instrument and related financing devices such as the Mello-Roos Act that have financed parks, open space, gymnasiums, swimming pools, landscaping, rail transit, and other public facilities.

Due to the rapid expansion of special-assessment districts, use of special assessments in California has had issues. The passage of Proposition 218 in 1996 added new requirements for special assessments to the state’s constitution. Because of ambiguous language in Proposition 218, special assessments are now subject to a wide range of interpretations. In some situations, it is almost impossible for public officials to deploy this instrument, because they cannot adequately define and distinguish the special and general benefits of their proposed projects. In other cases, when the distinction can be made explicitly, special-assessment projects have renewed legitimacy. Misczynski predicts that it will take much time and many lawsuits to define the range of permissible uses of special assessments in California.

This paper was presented at the Lincoln Institute’s annual Land Policy Conference in 2011 and is Chapter 5 of the book Value Capture and Land Policies.