CDD defaults may be disaster for a swath of homeowners [Tampa Bay]
More than 50 of Tampa Bay’s community development districts are in or near default, a condition that could have serious ramifications for thousands of homeowners across Tampa Bay and accelerate the decline of already troubled Florida banks.
Developers use CDD bonds, or “dirt bonds,” to build roads, utilities and clubhouses. Of Tampa Bay’s 115 community development districts, 28 have already defaulted and another 25 could be teetering toward insolvency. That’s 46 percent of the total.
They include some of the biggest names in Tampa Bay residential real estate: New River and Longleaf in Pasco County; SouthBay and Live Oak Preserve in Hillsborough County; and Sterling Hill and Southern Hills Plantation in Hernando County.
Developers initially make CDD payments but gradually shed the expense as home buyers assume their proportional share. When the housing market collapsed, developers were left covering payments on unsold land.