CDD's - Can someone please explain what they are? (Tampa: HOA, houses)

[bobandsherry]

Nothing is free. If a community doesn't have a CDD then it means the builder paid the costs. Now, do you think the builder is going to eat that cost? No - it's passed along in the price of the house. There are those who will bad wrap a CDD simply because they see it as another tax. However homeowners will find that their purchase price is lower than a comparable property built without a CDD. The difference being the cost for the infrastructure is deferred by way of annual payment.

BTW, you could pay off your CDD and not pay it annually.

[upgrader]

A lot of great knowledge shared here.

I'd also suggest reading

https://en.wikipedia.org/wiki/Commun...pment_District

As a long time condo owner, from reading the above I wish as much as possible in my Association was covered by a CDD (especially the tax implications)

Originally Posted by bobandsherry

BTW, you could pay off your CDD and not pay it annually.

B&S, can you explain the above statement? Are you saying the Association can (in mass) vote to pay off the CDD lump sum, or are you saying owners can do it individually? If individually, is there a "pre-pay" discount (ya know, the time value of money thing)?

[EngGirl]

No, it's more for individual to pay off his/part upfront. Basically multiply your CDD amount by number of year (30 for brand new home) and pay it as one time lump sum.




I would disagree on price difference between communities with/without CDD. Take a look at two new communities in Wesley Chapel - Arbor Woods and The Ridge. First one has no CDD, second one does. Check prices for compatible floor plans and you will see no difference. Yes, The Ridge has great planned amenities Arbor Woods will never have, but HOA at Ridge are 3 times what Arbor Woods is charging.


The problem with CDD as I see it - bond will be paid off, there is no question about that, but maintenance part of CDD fee will with community forever... So, even paying more for home upfront makes more sense. And community with CDD might be harder to sell in the future too... Some communities in Hillsborough County have $10K+ annual CDD + HOA!!!!

[CubsFan20]

Originally Posted by EngGirl

The problem with CDD as I see it - bond will be paid off, there is no question about that, but maintenance part of CDD fee will with community forever... So, even paying more for home upfront makes more sense. And community with CDD might be harder to sell in the future too... Some communities in Hillsborough County have $10K+ annual CDD + HOA!!!!

I knew someone who lives in Westchase, they have a CDD AND a HOA. Their HOA was very low (like $150/yr), but their CDD was several thousand a year.

In their case, part of the CDD payed for what a normal deed restricted community, the HOA would pay for, like maintenance and landscaping in the "general areas"

My subdivision, I have a HOA, and it's only $300/yr, no CDD, and I'm going to have to pay it probably the entire time I own the house. Because there are expenses that HAVE to be payed. It's part of the cost of doing business, or owning a house.

It's not gone up substantially since I have lived there, just like the maintenance side of the CDD wont.

If you don't like the CDD thing, live in an older neighborgood which dont have one.

If you don't like CDD or HOA, go live in some ghetto in Suitcase City or Tampa Heights and see how nice that is

[bobandsherry]

Originally Posted by upgrader

A lot of great knowledge shared here.

B&S, can you explain the above statement? Are you saying the Association can (in mass) vote to pay off the CDD lump sum, or are you saying owners can do it individually? If individually, is there a "pre-pay" discount (ya know, the time value of money thing)?

It's individual (property owner) who pays off the CDD fee. This would only be for the bond assessment, you would continue to pay for the Operations and Maintenance assessments. You would contact your District Manager to get the payoff amount.

[upgrader]

Thanks for the reply B&S. Hopefully, a competent D.M. would discount a present payment based on the expected interest rate at the Bond creation.

Another question, are the Operation & Management assessments in Florida treated like property tax? That is, superior to any mortgage on the property?

[bobandsherry]

Originally Posted by EngGirl

No, it's more for individual to pay off his/part upfront. Basically multiply your CDD amount by number of year (30 for brand new home) and pay it as one time lump sum.




I would disagree on price difference between communities with/without CDD. Take a look at two new communities in Wesley Chapel - Arbor Woods and The Ridge. First one has no CDD, second one does. Check prices for compatible floor plans and you will see no difference. Yes, The Ridge has great planned amenities Arbor Woods will never have, but HOA at Ridge are 3 times what Arbor Woods is charging.


The problem with CDD as I see it - bond will be paid off, there is no question about that, but maintenance part of CDD fee will with community forever... So, even paying more for home upfront makes more sense. And community with CDD might be harder to sell in the future too... Some communities in Hillsborough County have $10K+ annual CDD + HOA!!!!

As I said originally, nothing comes for free. I have no idea what differences are between two communities. From my experience there can be plenty of differences in the home to make up the difference. Prices may be comparable due to builder needing to be price competitive, but no idea what that means in regards to quality, fit, finish and features of homes in both communities.

The options for covering infrastructure:
1. Builder and passed into the cost of home and higher HOA's (HOA fees are NOT tax deductible)
2. Builder gets bonds and rolls into CDD (CDD fee IS tax deductible)
3. City/Town/Village pays for infrastructure and residents of the city/town/village absorb the cost by paying overall higher taxes (not very common these days as existing residents have tired of paying the extra cost for new communities with newer and higher cost homes)

There is a cost to pay for infrastructure - roads, sewers, landscaping, streetlights, wetland mitigation, etc. This will either be paid for by builder and rolled into the cost of the home, those items then become the assets of the community/association. The taxes will then be higher than homes without a CDD and HOA's will also tend to be higher as CDD's. In my community the CDD pays for the build and maintenance of the pool, parks, trails, landscaping and entry facility. The HOA is really low as a result (only $40/month which includes the cost of internet), and largely is only responsible for enforcement of rules and approval of ACC.

One can kid themselves that one is better or worse, bottom line is there is a cost for the infrastructure, just depends on how the developer chose to structure their development deal.

[bobandsherry]

Found this that may be of interest - What is a CDD. As noted in the details "To defray upfront expenses and offer homes at a lower cost, developers takeout bonds to fund these improvements.". It also mentions there are 600 Community Development Districts in Florida, 120 in the Tampa area - so these have become the norm. Other basic information that may be useful. Enjoy.

[CubsFan20]

Originally Posted by bobandsherry

Found this that may be of interest - What is a CDD. As noted in the details "To defray upfront expenses and offer homes at a lower cost, developers takeout bonds to fund these improvements.".

I recognize the need for the CDD's to some degree. but I do have to call bull**** on this "offer homes at lower cost". Just not true, for new or used homes. It does not end up being that way. It's ONLY a way for developers to make more upfront money. Plain and simple

[TampaKaren]

Part of Westchase has paid off their bond and have no further CDD payment. Same with a few others (Cheval East). They all still have the deed restrictions and an HOA.