But what local governments tend to do is declare a redevelopment zone to susidize - typically housing - development.  The new property taxes go to subsidize/fund the development through the local redevelopment agency, and the local governments have to slap a Mello Roos tax on the property to keep up funding for police, fire, schools etc. to maintain fiscal neutrality. This mello roos is on top of property taxes, and makes the housing even more expensive. I'd really like to see a good, strong, source for what you've heard.