MUDs — Why They Are Important

Dallas-Fort Worth remains one of the nation’s hottest markets for new homes. Builders started an impressive 34,586 homes in D-FW last year, according to housing researcher Metrostudy, and buyers closed on 32,582 homes.

That’s a lot of homes.

One thing that is supporting this growth in the D-FW market are special utility districts, such as Public Improvement Districts (PIDs), Municipal Management Districts and Municipal Utility Districts (MUDs). In fact, two of the three D-FW communities currently ranked among the nation’s 50 top-selling are within a special district.

How Do These Special Districts Help?

These special utility districts are a financing vehicle for the construction of roads, utilities, drainage, etc., which allows developers to recoup development costs at a faster pace than from the sales of lots. This has two results:

• Builders pay less for homesites than they might without district financing, which means home buyers pay less for their homes.
• With these development costs covered through the special utility district, developers have more leeway to introduce a higher level of amenities within a community.
• Plus, a higher number of households often brings nearby retail conveniences.
• In a market such as D-FW that has a great demand for developed lots, having homesites developed at a quicker pace helps keep supply-and-demand market volatility in check.

Generally, without a special utility district, you’ll either find a community with minimal amenities or one with similar amenities, but a higher home cost. For families wanting to live in a highly-amenitized, new-home community, one that is within a special utility district is a viable — if not preferred — option.

More information on Trinity Falls’ Municipal Utility Districts can be found here: mckinneymud1.com

This is the first of a three-part series on the what, why and how of special utility districts. Stay tuned for the next article, which will detail how the taxes work.