what does ("PID") in the real estate industry?

A Public Improvement District (“PID”) is a financial instrument created by the Public Improvement District Assessment Act as found in Chapter 372 of the Texas Local Government Code. The PID allows any city to levy and collect special assessments on property within the city or outside the city’s jurisdiction (“ETJ”). A county may establish a PID, but must obtain approval from the city if the proposed PID is within the city’s ETJ. PID provides a mechanism for financing improvement projects by issuing bonds secured by special assessments levied on all user properties. Because PID bonds can be used early in the development process to reimburse the developer for qualifying infrastructure, often before the first home closes.

Public improvements eligible for PID financing; Access to rights-of-way, art, creating pedestrian centers, infrastructure, landscaping and other beautification, libraries, mass transit, parks and recreation or cultural facilities, parking, streets and sidewalks. Additional security services for the improvement of the district, including public safety and security services. Additional business related services for the betterment of the district. Water, Sewage Water, Health and Sanitation or Sewage.

Advantages of PID

A PID can be established early in the development process, allowing the developer to return it when the public infrastructure is complete. Additionally, like a Municipal Utility District (“MUD”), Water Control and Improvement District (“WCID”), or Fresh Water District (“FWSD”), PIDs do not require a TCEQ permit, and are managed by a governing body. city ​​or county, thereby mitigating board turnover and board integrity concerns. If the City elects to include the property within the scope of the PID, the City will not be required to pay assessments and the assessments will not affect the City’s debt capacity or rating.

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