Improvement Districts May Be The Solutions

Robinwood West’s community center was and eyesore-until residents learned about a new way they could save it.

When Barbara Ellis bought a home in Missouri’s Robinwood West community, its homeowners association (HOA), charged with upkeep of public areas, operated on dues of $6 per year per household-less than $3,000 per year. That paid for landscaping in the 1960s when the development was build, but in 1994, when Barbara moved in that wasn’t enough to keep the grass trimmed, much less maintain the crumbling pool and community center. “I sent the HOA $20. They sent it back. They could only accept $6, Barbara says.

Because the HOA rate has been frozen- a common problem for older HOAs- the subdivision was in a quandary.

Then in 1998, Missouri passé the Community Improvement District (CID) Act, allowing property owners to target and area for improvement, then levy a special tax on their property to provide funds for the work. It’s no often you see residents willingly tax themselves, but for Robinwood West, it was as a chance to revitalize the community, and it worked. Since the CID was formed, Robinwood West is lush and orderly. The pool and community center look brand-new. The CID’s $133,000 budget - $280 per household- also pays for events such as holiday parades, cook-offs, and more. “People don’t mind the tax when they know the money is going back into the community,” Barbara says.

Improvement districts are nothing new. Numbering in the thousands nationwide, they include local improvement districts (LIDs) in Washington, community service districts (CSDs) in California, municipal improvement districts (MIDs) in Arizona, public improvement district (PIDs) in Texas, and many more places. They provide a number of services: landscaping, security, recreation, and historic preservation. Improvement districts share certain traits, such as the ability to fund themselves through taxes or specials assessments.

“What makes these districts unique is the self-taxing mechanism,” says Lorlene Hoyt, assistant professor of technology and planning the Massachusetts Institute of Technology, who heads up the school’s International Business Improvement Development Project. “Traditionally, BIDs were used to revitalize commercial areas. Now they’re used to unite neighborhoods rather than a single development.”

Missouri’s CID is among the most versatile. “You can for it to the boundaries that you want,” says Marvin J. Nodiff, a community association attorney in St. Louis who has researched taxing districts across the country. “It’s very flexible. For example, you can take in residences solely, or businesses solely, or you could  do a mix of both. Two neighborhoods could get together if they have a common objective.”

Making Districts Work

Just south of Dallas, for  example, Cedar Hill PID #1 span 10 neighborhood and 3,000 homes. It was created in 1998 after a developer went bankrupt, leaving behind empty and half-completed lots. “The city couldn’t maintain that ling,” says Michael Quildon, the PID’s president. Homeowners stepped in, gathered the state-mandated 50-percent approval from fellow property owner, and created the PID which imposes a property assessment of ten cents for every $100 of home value. Today, with a budget of $300,000, the PID concerns itself mostly with the landscape of Cedar Hill, planting new trees and installing fences. The PID also works with local police to increase patrols in the community.

In rural Mad River, California, the Ruth Lake CSD has a completely different mission: to develop and maintain a buffer zone of recreational land. Today, the CSD manages 178 lots, several campgrounds, and a marina. Unlike other districts, Ruth Lake doesn’t levy taxes but derives revenue form lot rentals and other fees.

“Our goal here is to promote tourism. Ruth Lake is a beautiful place for families to visit.” Say Rick Jeams, chair of the CSD’s board.

Getting Started

Make no mistake, starting an improvement district requires time, efforts, and dedication; but residents say the payoff is worth it. Here are some questions to ask before starting a improvement district in your area.

1. How do you learn more? Consult the local planning department of brief you on state laws governing special districts, or go online to your state’s Web site to learn more about requirements for an improvement district.

2. How many neighbors should you recruit? Start small-with just a handful of neighbors. Hold informal meetings to ask public question: Why create a taxing district? What are we trying to improve? What are our priorities? How much will it cost? As you discuss the answers, you’ll draw more neighbors to the cause.

3. Dou you need a lawyer? At some point- yes. But there’s a lot you can do your self. You can save on legal bills by working with local planners, Nodiff says. “The planning staff is familiar with requirement-contents of the petition, options for structure, and criteria for approval-thus reducing the need for legal counsel.”

4. How long will the whole process take? Nodiff estimates that a small neighborhood could launch a district in as little as three to six months; a larger community could take a year.