Whether you’re in Miami, Tampa, Jacksonville, or other fast-growing areas within Florida, understanding these differences is essential for community developers, board members, and residents. This guide covers what a CDD is, how it differs from an HOA, and the key considerations for boards operating within each.
This article is not intended to and does not constitute legal advice or create an attorney-client relationship. Board members should consult their association’s attorney to discuss the legal implications of their decisions or actions prior to proceeding.
What is a homeowners association (HOA)?
A homeowners association, or HOA, is a private, non-profit organization created by a developer to manage and maintain a residential community. Its primary function is to create and enforce the community's Covenants, Conditions, and Restrictions (CC&Rs), a set of rules designed to preserve property values and maintain a uniform aesthetic.HOAs are governed by a board of directors, usually composed of volunteer homeowners elected by the association members. This board is responsible for overseeing architectural standards, enforcing rules on property upkeep like landscaping, and managing common areas owned by the association, such as a private clubhouse or pool. Their goal is to create a cohesive and desirable living environment for all residents.
What is a community development district (CDD)?
A community development district, or CDD, is a special-purpose local governmental entity created to finance, build, operate, and maintain public infrastructure for a new development. Developers use this tool to fund large-scale projects including roads, water and sewer systems, stormwater management, and community amenities.
Taylor Nielsen, manager at Rizzetta & Company, a FirstService Residential company, explains, “The CDD is essentially a financial development tool for a developer to fund the infrastructure of a project."
Instead of developers paying upfront, the CDD issues tax-exempt municipal bonds to fund a project. Homeowners within the district repay these bonds over time as part of an annual assessment included on their property tax bill, along with the cost to operate the community.
Because CDDs are governmental bodies, they can secure lower interest rates compared to private loans, enabling higher-quality infrastructure and more extensive amenities. Florida CDDs operate under Chapter 190 of the Florida Statutes, which establishes the legal foundation for creating and governing CDDs statewide. This statute outlines their authority to issue municipal bonds, levy CDD fees, maintain infrastructure, and hold public meetings.
Key differences: HOAs vs. CDDs
Compared to HOAs, which operate under separate chapters of Florida law and primarily manage common areas and enforce deed restrictions, CDDs are designed to deliver large-scale, publicly owned amenities and infrastructure from the ground up.
Both influence the community experience, but their structures differ fundamentally: a CDD functions as a public governmental entity, while an HOA is a private corporation. This distinction impacts governance, public access, and fee collection.
1. Governance and elections
HOA
An HOA is run by a board of directors, which is initially appointed by the property’s developer. Later, when the property is turned over to the homeowners (at a specific point based on sales and/or length of time), the board of directors is elected by the association's members. These elections are private events governed by the procedures outlined in the association’s governing documents, not by public election laws.
CDD
A CDD is run by a board of supervisors. Like an HOA, these seats are initially held by the developer's representatives. "As the community grows, the seats transition to residents who are elected the same way as a city would elect its council, through a public process managed by the county's Supervisor of Elections office,” says Nielsen.
2. Transparency and public access
HOA
As a private entity, an HOA's meetings and records are generally accessible only to the homeowners within that specific community.
CDD
As a governmental body, a CDD must comply with Florida's Sunshine Law, which mandates complete transparency. Lucianno Mastrionni, vice president at Rizzetta & Company, notes, "All board meetings must be publicly noticed and open to the public, and websites must include all information about the community." Amenities are also publicly funded, so CDDs offer a mechanism for non-residents to purchase memberships to enjoy the amenities.
3. Fee structure and collection
HOA
Residents pay regular dues, usually on a monthly or quarterly basis. These
payments fund the HOA's operating budget, which covers common area maintenance, management fees, insurance, and contributions to a reserve fund for future repairs.
CDD
Residents pay Florida CDD fees as an annual assessment included on their property tax bill. This fee is typically broken into two parts:
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Bond repayment: This portion repays the debt from the bonds issued to finance the community's infrastructure. This part of the assessment is finite and disappears once the bonds are fully paid off, usually in 20 or 30 years.
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Operations & Maintenance (O&M): This ongoing fee covers the annual costs of maintaining the public infrastructure, such as landscaping, utilities for shared spaces, amenity management, and administrative expenses. This fee continues as long as the district is responsible for upkeep.
4. Legal authority and enforcement
HOA
The main role of an HOA is governance and enforcement. It has the legal authority to enforce CC&Rs, issue fines for violations, and place liens on a property for unpaid dues. Its focus is on upholding community standards to protect property values.
CDD
A CDD's authority is restricted to the public infrastructure it owns and operates. It does not enforce homeowner compliance with aesthetic rules or dictate what a resident can do with their private property.
Benefits of HOAs and CDDs
Homeowners associations (HOAs)
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Focus on protecting property values: Enforcing standards for property maintenance helps protect the value of homes throughout the community.
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Community cohesion: Shared rules and standards can foster a unified and desirable living environment.
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Management of common areas: Maintaining shared spaces such as private parks, pools, and clubhouses for the exclusive use of residents.
Community development districts (CDDs)
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Higher-quality amenities: Access to tax-exempt bond financing often allows for the development of more elaborate and high-quality amenities than might otherwise be impossible.
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Governmental transparency: Operating under Florida's Sunshine Law, CDDs provide a high level of transparency and accountability to the public.
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Debt is finite: The bond repayment portion of the CDD fee has a clear end date, which will lower a homeowner's financial obligation in the long term.
Why experienced CDD management matters
Whether your Florida community operates as an HOA or a CDD, or both, professional management is essential for long-term success. CDD governance is complex, requiring specialized expertise in governmental accounting, bond administration, public records compliance, and public meeting procedures. Inexperienced management can lead to costly mistakes, deferred maintenance, and reputational challenges.
Developers look for a management partner who can guide them through the entire process, from petitioning the local government to create the CDD to long-term operational management.
FirstService Residential and Rizzetta & Company deliver comprehensive solutions tailored to meet the unique demands of public districts and private associations alike. By gaining a clear understanding in the CDD vs. HOA comparison, you’ll be better equipped to choose the right partner with proven expertise to manage complexity and drive long-term success.