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Paying the price

Homeowners might pay thousands of dollars per home in common fees, but they also reap the benefits.

© St. Petersburg Times
published May 3, 2002

Lush landscaping, a resort-style swimming pool, fully-equipped fitness center, manned security gate and neighbors with well-kept lawns.

Those things are yours to have in the master-planned communities that have come to define suburban living in the Tampa Bay area.

But they aren't free.

Fees to a homeowner's association, to a community development district, and for ongoing maintenance of community areas can add up to thousands of dollars a year.

Community development fees are typically the most costly. They range from several hundred to several thousand dollars a year, depending on what they fund.

"It's a function of the size and complexity of the lots and communities," says John Daugirda, regional manager for Severn Trent Services. The company helps developers establish and operate districts throughout Florida.

In the Tampa Bay area, Severn Trent manages community development districts in Arbor Greene, Tampa Palms, Westchase and other neighborhoods.

The districts are a means of financing the construction and operation of common areas and amenities.

"Most of your master-planned communities are CDDs simply because it's so expensive to bring one of these up from the ground," says Sharon D'Onofrio, property manager at Arbor Greene in New Tampa.

Each community forms a district that issues bonds to investors for the construction of such infrastructure as roads, ponds, walls, clubhouses, entrances and swimming pools. Then the landowners in the community pay back the bonds along with property taxes.

An elected board of supervisors determines the fee. Each homeowner pays a share of the debt, based on lot size. The debt is financed over 20 or 30 years, and once it is paid off the fee disappears.

In contrast, the operation and maintenance fee doesn't disappear. It may vary from year to year. The amount is set by the community development district's board of supervisors.

A third fee, the homeowners association fee, is usually paid directly to the association, while the other two fees are incorporated with mortgage payments.

"Most of the communities in this area have all three of those," says Michael Carman, a sales representative for American Heritage Homes in Watergrass, a subdivision in West Meadows, a New Tampa community.

"Personally, I wouldn't live in a community unless it did."

The fees, Carman says, mean the community will have plenty of amenities and will be well-maintained, so the property will appreciate significantly. Annually, residents in Watergrass pay $212 to the homeowners association, $600 to pay off the community development debt, and about $220 a year for operations and maintenance. The average home price in Watergrass is $170,000 for a four-bedroom, two-bathroom, 2,000-square-foot house on a good-sized corner lot, Carman says.

In return, residents get to use the West Meadows community center, which features a huge pool with lap lanes, a fitness center, tennis courts and a playground. The center offers swimming lessons, aerobics classes and summer camps.

In Arbor Greene, the homeowners association fee is $35 a year, but residents pay from $1,200 to $3,000 a year for community development and maintenance fees.

Those fees pay for landscape maintenance, staffing the gatehouse 24 hours a day, and maintaining and heating the pools.

Wendy Barrett, who lives in West Bay, a Centex community in Town 'n Country, pays no community development fee.

But the community has no swimming pool and no clubhouse.

Barrett pays $297 a year to her homeowners association, and in return gets an occasional newsletter, an invitation to an annual community party and friendly reminders when she doesn't meet the requirements of her deed restrictions.

Barrett's experience is typical, says D'Onofrio.

"You can go somewhere and not pay a CDD fee, and you won't have clay tennis courts, a $2 million clubhouse done in marble and a resort-style pool," D'Onofrio says. "It's the old adage. You get what you pay for."

Community development districts

How they work:

1. A master-planned community incorporates as a district.

2. The district sells bonds to investors to cover the cost of building ponds, clubhouses, swimming pools or other amenities, much as a municipality sells bonds to pay for sewers or other infrastructure.

3. The district assesses fees to homeowners to pay off the bond debt. Once the bonds are repaid, usually in 20-30 years, the fee is removed.

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