Southern Growth through Special Districts: The new ways to finance infrastructure in Florida, Texas, and beyond 

“If you’re a smart local official, you want your developers to be successful,” says Alan Thompson, Chief Marketing Officer of RaganSmith, a Pape-Dawson company. That’s the underlying belief Alan brings to discussions with municipal leaders and developers alike.  

These days, many of those conversations involve new ways to fund infrastructure. In planning a new development, early questions arise about how to fund needed water, wastewater, and road systems. Across the country, developers are using special districts to bear the load of the upfront cost and to provide communities with better, more affordable homes. Guiding communities across the Southeastern Sun Belt through the process has become an important service Alan conducts with his colleague Pfilip Hunt, Vice President and Partner at Wrathell, Hunt and Associates. 

Although the details are complex, Pfilip says, “there are two basic models for special district funding: the Florida version and the Texas version.” 
 
The Florida Model 

In the Florida model, the city or county creates an independent governmental entity. “When that happens, it’s the last time we ever go before the city or county again for anything regarding the community development district (CDD) or financing,” Pfilip says. Development approvals, entitlements, and other issues still require their assent, but the newly formed district decides all funding items autonomously.  

The Florida version has another advantage: because it institutes an independent entity, it can take dedication of assets. “This becomes a powerful maintenance tool,” Pfilip says. The CDD’s authority covers not only original infrastructure investments but also funding for ongoing operations and maintenance. As a result, a CDD may be able to maintain its landscaping, roads, or stormwater ponds at a higher level than surrounding areas.  

In this model, the developer proposes five board members to decide on financial matters, including spending money and issuing bonds. At the start, developer representatives make up all five, but if there are 250 qualified voters in the district after six years, then two of the five seats are elected at large. Within a few years, all the board seats are chosen by residents.  

CDDs of this sort have existed for decades. In the late 1960s, Florida approved the Reedy Creek Improvement District for Disney World development which has issued municipal bonds over the years to pay for road, bridge, water, sewer, and storm infrastructure. “By 1980, the Florida Legislature decided to give every city and county in the state the power to do that,” says Pfilip. “Since then, they’ve approved over 1,050 CDDs.” 

“This has been a great tool in Florida,” Pfilip says, “and Georgia is moving to pass a nearly identical provision, with a statewide referendum in November 2026.” The name of the Georgia entity will be Workforce and Residential Infrastructure District, but the provisions are essentially the same.  
 
The Texas Model 

Texas, Tennessee, North Carolina, and South Carolina have a more dependent district model. “Unlike in the Florida model, the city keeps its hold over the money in the Texas model,” explains Pfilip. “They create no governing board, so the district has to ask the city or county to act as conduit issuer of municipal bonds for continuing infrastructure investments.” 

Pfilip boils it down this way: the Florida model gives the district two great powers, to finance infrastructure and to maintain that infrastructure. The Texas model gives only one, to finance. Still, both models represent a step forward for developers and homeowners. 
 
The Benefits of Both Models 

For developers, the appeal of both models is clear. They allow upfront funding for infrastructure that can then be paid off in the coming years.  

This translates directly into two kinds of benefit for their homebuyers, says Pfilip. For first-time homeowners, who are on average younger and tighter financially, special district models can knock tens of thousands of dollars off the home price. “They’re very sensitive to cost, so that can make the purchase much more doable,” he says.  

The other benefit answers the needs of move-ups, recreational buyers, and those who prioritize amenities. “For them, developers can add all kinds of features,” says Pfilip. “Those can include parks, trails, landscaping, and other infrastructure that make the project more attractive.” 

Both kinds of buyers can benefit from spreading infrastructure costs across decades rather than paying them at closing, Pfilip continues. “Instead of paying up front, you may have a homebuyer pay $1,500 a year for 30 years. Many people don’t stay in a house that long, so if they sell after five years, the new owner picks up the payments after that.” 

The details of special districts vary by state and even year to year. Developers need experts who have mastered both the engineering and the special district financing aspects of development. High costs—for materials, labor, transportation impact fees, and more—make aligning engineering and funding even more essential. 

The key to success in special districts, says Alan, is the same for development in general: “You’ve got to relate to the client and understand their project.” The rise of special districts acknowledges what Alan has seen in projects across the decades: “The heaviest lift is at the start, putting in infrastructure.”