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A new perspective on Metropolitan districts

by | Mar 23, 2021 | Blog, Denver Real Estate Market | 0 comments

It’s no secret that homes in Denver are in short supply, causing prices to rise and buyers to scramble to find attractive housing options. New home communities provide a refreshing boost of housing supply around the metro area.

Metropolitan districts have enabled development of some of the largest new front range communities. While a past Insights article charted some residents’ grievances with Metro districts, today we explore the benefits of this common, yet often misunderstood, funding source.

Metro districts are special taxing districts that fall under the jurisdiction and oversight of a city or county. Officials work with landowners interested in developing the area “to determine what infrastructure is needed within a community and the costs associated with those amenities,” explains Erin Jones, chair of the Northwest Douglas County Chamber and Economic Development Corporation Board of Directors, in a recent article in The Gazette.

“Development is then asked to pay its own way by taking on the up-front financial burden that the cities and counties cannot bear, and they spread those costs out over time to the residents within the community.” In other words, a portion of the infrastructure and service costs are paid by residents for a set amount of years after the community’s completion.

Such districts offer many benefits. Besides funding common infrastructure like roadways, water, sanitation and transportation, they may fund amenities like parks, recreation centers, trash pickup, and snow removal.

They also help keep the cost of homes in check by “providing governments access to low-cost, tax-exempt capital early in the development cycle,” according the Metro District Education Coalition. This can lower the entry housing price to a new community. Furthermore, municipalities, counties and new homeowners  prefer metro district financing, paid over many years, to avoid imposing the burden of new community development costs on the initial home purchaser.

To understand the tax implications before purchasing a home in a metro district, homebuyers should check their tax statement, title work, and, when available, the district website.

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