9.1.25 As communities across the country confront the urgent need for housing that is safe, affordable, and resilient, one group of local governments plays a critical—but often overlooked—role: special districts. While not typically at the center of housing policy debates, special districts are behind-the-scenes enablers of housing development, providing the infrastructure and services that make new homes possible and livable.

Special districts deliver core services that directly impact where and how housing can be built—including water and sewer systems, flood control, fire protection, transportation, and parks and recreation. Without these foundational services, no subdivision, apartment complex, or affordable housing unit could break ground. In many communities, especially those growing rapidly or located in rural or unincorporated areas, special districts are the primary providers of these essential systems. They ensure that new housing developments are not just permitted, but truly sustainable.

Beyond infrastructure, special districts are increasingly stepping up as collaborative partners in the housing conversation. From coordinating with local planning agencies to support smart growth, to modernizing service delivery in response to density and demographic changes, special districts are adapting to meet housing needs head-on. Many are using innovative financing tools—like special assessments, community facilities districts (CFDs), or public-private partnerships—to help fund critical infrastructure for housing projects.

Here are two examples, Colorado and Texas which both highlight the opportunities Special Districts have in their communities to be leaders in affordable housing. 

·       A partnership between the Mancos Conservation District and the Town Mancos in Southwest Colorado, was recently awarded an Innovative Housing Opportunity Initiative through the State’s Division of Local Government, to construct a small but impactful 2 affordable unit duplex on District-owned land.   Mancos Conservation District 

·       An important tool in Texas' housing development toolbox is the Municipal Utility District, or MUD — a mechanism  created to deploy across the state to fund critical infrastructure and enable large-scale, master-planned developments. Viridian, a master-planned community in Arlington was made possible through a Municipal Management District (MMD) — a cousin of the MUD structure that offers expanded flexibility. Developed on challenging land within the Trinity River floodplain and adjacent to a landfill, the project faced steep financial and logistical hurdles. Read more here: https://www.bizjournals.com/dallas/news/2025/05/29/special-districts-attainable-housing-texas.html

·       Districts also have to be hyper aware of state and local changes to zoning and masterplans, as the country pushes more rooftops to deal with the unaffordability of housing. See what one district is doing in Colorado. https://www.denver7.com/news/front-range/lakewood/water-district-in-lakewood-says-pipes-cannot-handle-more-demand-laid-out-in-potential-zoning-changes

As the national housing conversation continues, NSDA is committed to making sure special districts have a seat at the table—because housing cannot happen without the services that make communities thrive.