Tens of thousands of Suncoast homeowners are spending more money each year to pay off bonds tied to independent special districts than in property taxes toward their actual local governments.

Real estate developers are turning to these little-known government districts to fund roads, sewers and clubhouses needed to build their neighborhoods – leaving homebuyers on the hook for steep annual assessments that then last decades.

The analysis revealed two-thirds of properties in local special districts paid more in annual assessments to cover things like road construction, golf course maintenance and landscaping than they paid toward the taxes that fund police, fire departments and public transportation.

Certain homeowners, including some in Harrison Ranch, Forest Creek and LT Ranch, paid almost five times more.

The district fees were stamped onto annual property tax bills for area homes ranging in value from just under $250,000 to more grandiose country club estates worth more than $1.8 million.

Homeowners last year paid anywhere from about $500 in Heritage Harbour South in East Manatee County to more than $6,300 in total district fees for certain phases of Lakewood Ranch. That’s often on top of separate neighborhood HOA dues.

An ongoing Suncoast Searchlight investigation found these developer-led governments have tapped nearly $10 billion in municipal bonds between Sarasota, Manatee and DeSoto counties – nearly a third of them authorized since 2020.

Power and Profit: Developers gained government status, then got bonds to build big

Brokers, attorneys and economists say residents moving into these government districts do not always consider how those fees impact the cost to buy and own a home – blind to the long-term financial obligations they later cannot escape.

“They don’t always realize it, but the costs are just passed onto the buyers,” said Dan Lobeck, a Sarasota homeowner’s association attorney who heads the advocacy group Control Growth Now. “I’ve always been appalled at the concept.”

Decades after homes were built, expenses mount in aging special districts

Gregg Gipp moved to Florida more than two decades ago to escape the bone-chilling winters of New Jersey.

He fell in love with the Riverwood community near El Jobean for the golf course and its charming hints of nature. He had no idea he was buying into a community development district – or what they were at all – and was unaware of the long-term fees that came with it.

Established through a Charlotte County ordinance in 1991, Riverwood spans more than 1,300 acres near Manasota Key, with 29 different neighborhoods and only about one home per acre. The district is just south of Sarasota County, so it’s not included in the Suncoast Searchlight data analysis.

Over the years, Gipp watched his neighborhood infrastructure deteriorate, with original roads that now need new paving, tree debris that remains downed from Hurricane Ian years ago, and erosion that has carved away the ponds.

But the biggest strain has been a wastewater system built by the developer 35 years ago that fell into disrepair. During the past five years, the district has spent about $1.2 million to upgrade the system with new meters, replace lift stations and fix rusty pipes.

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“Our wastewater system could have failed, it deteriorated so badly,” Gipp said. “Where I come from, when you put in a sewer system, it is run by a municipality that knows what it’s doing – not by a bunch of retirees.”

Across the Suncoast, aging independent districts like Riverwood often mean soaring maintenance costs for homeowners, who must pay for new bonds or raise assessments years after these communities were first developed.

The Suncoast Searchlight analysis found many of the oldest special districts in the region also carried among the highest costs, as residents scramble to extend the life of sinking community infrastructure.

First built more than two decades ago, the Venetian River Club in North Venice has some of the area’s highest annual district fees, with median assessments of just more than $4,000 last year, according to the Suncoast Searchlight analysis.

At Waterlefe in East Manatee, homes dating back to 2001 paid a median of $3,849 in district fees last year to support a bond refinance in 2016, then new debt in 2023 for golf course and clubhouse renovations.

Developed through a series of governing districts through the 1990s and 2000s, portions of the 35,000-acre Lakewood Ranch community imposed district fees that reached a median of nearly $4,000 last year in its Community Development District 6, records show.

“Eventually, all these communities are going to feel the same thing we are now,” Gipp said. “When a CDD gets to our age, all of these things that should be done along the way are not because you don’t have qualified people running the community. We are in financial peril.”

District assessments stack thousands per year on resident tax bills

Inside the gates of Harrison Ranch in Parrish, more than 5 miles of manicured nature trails wind around community lakes and middle-class homes. A 24-hour fitness center, heated junior Olympic-sized pool, and a brand new basketball court are top selling points. Home listings even tout the on-site activity director to “keep the community engaged with fun events for both families and active adults.”

What the ads don’t highlight are the cost to residents to build and maintain it all.

For the analysis in Harrison Ranch, one home with four bedrooms and two bathrooms under about 1,600 square feet – and a caged pool in the backyard – was valued by county appraisers at $315,021 last year.

The owner paid $2,366 in annual fees to the community development district. That’s nearly five times the $503 owed to Manatee County for its general operating fund on the homesteaded property, which reduces the taxable value.

Buyer beware? Officials warn of high fees as special districts proliferate

Meanwhile, in Heritage Harbour South – 10 miles from Harrison Ranch – the 980-acre district has similar homebuying price points and recreational facilities for residents. But there, homeowners paid $536 last year in median assessments, according to the tax bills reviewed.

Economists say these special districts can attract certain buyers undeterred by the fees, but added that the higher costs in many neighborhoods have pushed out blue-collar families.

“It all depends on how transparent the fees associated with these community development districts are,” economist Paul Mason said. “It’s a mixed bag. It can make it very expensive for people.”

Across the Suncoast, more than one in five homeowners living within a special district pay double in assessments than they do in basic county and city taxes.

For some, the district fees equate to as much as $1,000 each year for every $100,000 in value of their home. In other words, homes worth just $275,800 were assessed up to $2,716 in annual fees toward district coffers.

Among the properties analyzed by Suncoast Searchlight, more than two-thirds of the owners paid between $1,000 to $3,000 per year in district fees. Fewer than 10% had annual district fees below $1,000.

“There are going to be fees that they're going to be paying that'll be added on top of the taxes,” said Robert Goldman, a real estate agent in Venice with Michael Saunders & Co. “You take a place like Venetian Golf and River Club. A home that would otherwise hypothetically have a $6,000 tax bill, with the CDD added onto it, could be $11,000.”

Experts question transparency of special district fees

Thousands of area homes have been built on property encumbered by developer bonds to finance infrastructure that buyers will pay off over decades.

Many didn’t know about the bonds or their obligations until just before they signed on the dotted line.

“It’s almost like the warning label on cigarettes,” said Chris Jones, an economist with the University of South Florida, who called these districts a ticking fiscal timebomb. “They give the least amount of information required by law.”

While some buyers understand how special district assessments can factor into their costs, others don’t, said Goldman, the Venice-area Realtor. He has worked with prospective buyers who refuse to even look at properties that come with the higher fees.

He begins the homebuying process by providing information about different communities and feeling out his client’s preferences, he said. Soon after, he provides underlying governing documents — including information on CDD fees.

“It's incumbent upon them to be aware of that before they begin,” Goldman said. “If it's not the type of governance that they want, what's the point of riding around looking at houses?”

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Alex Krumm, a past president of the Realtors Association of Sarasota Manatee and owner of NextHome Excellence, said he instead will often bring clients to house showings to gauge interest before broaching the additional fees.

“Those are tricky conversations for anyone, including for tax professionals, to have with people,” Krumm said. He noted that most buyers understand they are paying more for increased community amenities.

“It doesn't come up nearly as much as it used to because they have become so common,” Krumm said. “These CDD fees, they're almost everywhere now.”

Sometimes, it’s the mortgage lender who will give the detailed breakdown of what the costs to homeowners will entail – a step well into the homebuying process.

For increased consumer transparency, experts say it’s important for real estate professionals to give buyers as much information about special district costs as possible.

“Many new buyers are unaware of the long-term nature of this financing,” Alexei Morgado, who founded a Florida real estate school, said in an email to Suncoast Searchlight. “Disclosed CDD fees are not always easily pointed out, especially in resale transactions. We, as agents, have to explain to clients what additional obligations buyers will have upfront.”