Wondering what metro districts are? Looking to possibly buy a house in this type of neighborhood? No need to panic, because today, we’re sharing everything you need to know about metro districts in Northern Colorado.
What exactly is a Metro District?
Metro district is a special taxing district that allows developers to develop and pass the cost on to the end buyer but provides them with the ability to understand the upfront cost and the infrastructure.
To put it simply, a metro district is its own little city. From snow removal to road maintenance, the developer get all of this set up and it will be a part of your metro district dues. They have their own rules which is very interesting. Each one is autonomous but does need to be approved by the city/locality.
Metro districts started a long time ago, back in the 80s and 90s but recently have been widely used in Fort Collins, Loveland, and Northern Colorado.
What is the purpose of a metro district?
Since there’s often a limited amount of resources and money that the city is able to collect through taxes and all new taxes in Colorado need to be approved by the taxpayer, developments paid for by the general tax payer has lost favor. In their place, these special taxing districts were developed to push the development costs on to the end buyer in the form of a metro district tax. These tax districts are funded through bonds which are then sold and paid for over the next 20-30 years typically.
Ultimately, metro districts are special taxing districts. How they’re going to tax you is on your property taxes and that is through an increased mill levy. So your mill levies are going to be all the different taxing districts: schools, rivers, fire, ambulance, etc, and then these metro districts. All that combined gives you your property taxes. This can be ⅓ higher than what you could expect in an area without a metro district.
What to consider when looking to buy a house in a metro district?
Try to find out several things before moving to a metro district. Is that metro district being managed correctly? Where are all that money and resources going to? Does that fit exactly what you’re looking for in a neighborhood?
Also, talk to at least two or three different neighbors. They are a big resource for figuring out what that neighborhood is like and how the metro district is being operated.
Once you decide to pursue a neighborhood further, make sure to look into the bylaws and the financials that are luckily all in the public records. Consider going to Facebook as well, because they always have groups for these metro districts.
Selling a house that’s in a metro district
Metro districts are often cheaper. One of the reasons for that is they are typically outside of the major city centers. The infrastructure must be built (it isn’t already there), which is a major reason for the metro district to be created. The location some times relates to a lesser purchase price.
But one thing’s for sure: people are getting more comfortable with metro districts. They have more oversight and magnifying glasses on them. There ARE a few bad apple neighborhoods/metro districts out there that are essentially broke and will have to increase the mill levy and may NOT have a cap on that increase. So, be careful!
Hopefully, this article helped you understand a little better what metro districts are. They are certainly an option to explore when you’re a new buyer.
If you have any questions, feel free to reach out to Soukup Real Estate Services! We’d be happy to help you find your dream home here in Northern Colorado.