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What is a CDD in New Construction in Central Florida?

Updated: Jan 28, 2023

When buying a new construction home in Florida, you may come across something called a Community Development District (CDD). A CDD is a special district that is used to finance public infrastructure in new residential and commercial developments.

CDDs are created by the state legislature and are governed by a board of directors who are elected by the residents of the district. The main purpose of a CDD is to finance things like roads, sidewalks, parks, drainage systems, and streetlights in new developments.

In order to create a CDD, the developer must first get approval from the local government. This process typically involves a public hearing where residents of the area can provide input and ask questions about the proposed development. Once the CDD is created, the developer is responsible for financing the infrastructure projects within the district, and the CDD board of directors is responsible for managing and maintaining the infrastructure.

The money for these projects comes from two sources- property taxes and impact fees charged to developers. Property taxes are collected from all property owners within the district and are used to pay for things like road maintenance, parks, and public safety. Impact fees are charges that developers must pay in order to cover the cost of new infrastructure that is needed as a result of the development.

Residents of a CDD have no voting rights on how the district is run- that power lies with the board of directors elected by them. The board of directors is responsible for making decisions about the district's finances, managing the district's infrastructure, and enforcing rules and regulations.


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