Community Development District (CDD) fees are a common feature of single-family home communities in Florida, especially newer master-planned developments. A CDD is a special-purpose unit of local government, authorized under Florida Statute Chapter 190, that a developer establishes to finance, build, and maintain the infrastructure for a community: things like roads, water and sewer systems, drainage, street lighting, and often amenities such as clubhouses, pools, gates, and parks. Rather than the developer paying for this infrastructure upfront and folding the cost into the home price, the CDD issues bonds to cover construction, and homeowners repay that debt over time through an annual assessment tied to their property.
CDD fees typically show up on the property’s annual tax bill as a non-ad valorem assessment and generally have two components: a debt service portion, which pays down the bonds issued to build the infrastructure (usually amortized over 15 to 30 years), and an operations and maintenance (O&M) portion, which is a recurring annual cost to maintain common areas and amenities and generally continues for as long as the home is owned. The debt portion can sometimes be paid off early in a lump sum, which removes that piece of the assessment going forward, though the O&M portion remains. Total CDD fees vary widely by community, anywhere from a few hundred to several thousand dollars per year, depending on the scope of infrastructure and amenities financed.
For prospective buyers, it’s important to treat CDD fees as separate from, and in addition to, any HOA dues, and to factor them into the true cost of ownership since they can meaningfully affect monthly housing costs and mortgage qualification. Florida law requires sellers and developers to disclose the existence of a CDD before purchase, so buyers should ask for the current assessment amount, confirm whether it’s expected to change, and find out the outstanding bond balance and payoff schedule, since that affects how long the debt portion of the fee will continue. Because CDD assessments run with the land, they transfer to future owners as well, which is worth keeping in mind for resale.