Are You In a Public Improvement District (PID) or Planned Unit Development (PUD)?

Hello again and welcome to another edition of Houston First Time Home Buyers Edition. Today we're are getting to know some basic information about PIDs and PUDs .

PIDs (Public Improvement Districts)

• Public Improvement Districts (PIDs) are used to make improvement authorized by Chapter 372 of the Local Government Code.

• They are similar to MUDs, except PIDs can also be used for sidewalks, roadways, landscaping, parks, recreation, public safety/security, parking facilities, and affordable housing.

• PID addendum must be given to home buyers separately as an addendum or as a paragraph of the purchase contract, before executing the contract. If the transaction is entered into without the notice being provided, the buyer can terminate the contract, unless the seller provides the notice at or before closing and the buyer choose to close.

• PID is not a political entity.

• Most Texas neighborhoods pay PID taxes over a 20- to 40-year span.

• Home owners can pay their PID taxes in full or spread them out.

• PID is typically created through a partnership between a developer, the city, and sometimes the county.

• PIDs are widely used throughout Texas to support both new developments and the revitalization of established communities.

• Some, not all, developments used PID instead of HOA because PID assessments are tax deductible.

• PID is overseen by an advisory board whose members are appointed by the city council. While this board does makes recommendations to the city, the city is the ultimate decision maker.

• PIDs are not limited to residential development. They are also created to support commercial growth.

• PIDs are funded through bonds secured by liens against properties.

• Bonds are issued based on property's appraised value.

• Once issued, bonds are paid back through the collection of special assessment taxes. This is in addition to your property taxes.

• These special assessment taxes are levied for a minimum of five years.

• Public hearing must be held before a PID can issue bonds.

• Assessments are fixed once the bonds are sold.

• PIDs are often established within city limits.

PUDs (Public Utility District or Planned Unit Development)

• Public Utility District (PUDs) is created by the community and operate under an elected board, similar to a HOA.

• PUDs exists solely to provide electricity, water, sewer and telecommunications.

• PUDs are controlled by homeowners, and operate independently from the HOA.

• While PUD can include single-family homes, PUDs are often associated with condos and townhomes.

• PUD notice must be given to the buyer at or before a contract to purchase is signed.

• PUD residents are responsible for more taxes and fees than the average Texas homeowner.

• PUD homeowners are obligated to abide by the CC&Rs covenants, conditions, and restrictions set by the HOA.

• All PUDs have HOAs, but not all HOAs are PUDs.

• Residential areas in a PUD usually give residents easy access to amenities like grocery stores, schools, restaurants, and workplaces.

As always, thank you so much for stopping by. Remember, if you are thinking of purchasing your first home, please contact us. We are here to help. We have been helping Houston first time home buyers since 2011 and we can help you. I hope you have an amazing day. Until next time...Diana