The What, How, And Why Of Metro Districts

New homes and expansive subdivisions are popping up across the country every day. With these new properties has come a new type of association for the owners of homes within a subdivision — the metro district.

Metro districts are unique associations that help govern a particular subdivision or development. If you are in the market for a new home, you may encounter properties that are included within a metro district.

Find out more about these special districts so you will be prepared to decide if a home within a metro district is the right fit for your family.

What Is a Metro District?

A metro district is essentially a special taxing district. Developers take on a lot of risk when they build a subdivision. Not only do lots need to be developed and homes built, but the infrastructure of the subdivision must be installed as well. Each of these actions can cost quite a bit of money.

A metro district provides developers with the up-front funding required to finance the infrastructure of a subdivision by allowing homeowners to repay the initial investment via a long-term loan. Metro districts are recognized as government entities, so they have the ability to levy taxes against the homeowners within the district. 

How Are Metro Districts Formed?

The formation of a metro district is an activity that requires a lot of time and effort. Developers are responsible for initiating the formation process since they are the ones who will directly benefit first from the advantages a metro district can offer. A developer will submit his or her proposal to local government officials. Planning and zoning committees will meet to discuss the proposal. and ultimately decide if a developer will be able to move forward with a metro district model.

If approval is granted, the metro district will be overseen by an elected board of representatives. This board will have the authority to levy taxes, disburse funds, and determine which improvement projects will receive priority status. By requiring an elected board to take charge of a metro district, local government officials ensure that the metro district will operate in accordance with the desires of the homeowners who live within the district.

Why Are Metro Districts Becoming Popular?

The popularity of metro districts has increased in recent years. There are many reasons for this popularity boost. Both developers and homeowners benefit from the creation of a metro district. Developers will be able to pass along the cost of creating the infrastructure that will support a subdivision, yet be able to access the funds required for construction before all homes within the subdivision have been sold.

Homeowners benefit from being part of a metro district over time. The elected board makes all decisions regarding public improvements, so maintenance and repairs tend to happen faster in a metro district than they do elsewhere. Potholes can be fixed within a matter of days, parks can easily be augmented with new playground equipment, and all landscaping and snow removal happens in a timely manner.

Homeowners residing in a metro district can rest assured knowing that their tax dollars are being spent on projects that will have a direct impact on the overall quality and function of their neighborhood. 

It's important for home buyers to understand the ins and outs of metro districts when looking for a new home. Purchasing a property within a metro district can offer access to many unique benefits. Work closely with your real estate agent to learn the specific benefits and restrictions associated with a particular metro district before you put in an offer on a home.

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