Infrastructure Development Districts (IDDs) are a pivotal tool for managing growth and development in Tennessee. As Tennessee’s population grows, the need for efficient infrastructure becomes paramount. IDDs offer a structured approach to funding and financing the necessary infrastructure without overburdening local governments and taxpayers. These districts provide a timely and effective method to deliver essential capital infrastructure, facilitating growth while maintaining fiscal responsibility. In essence, IDDs allows developers to have access to upfront capital to work with local governments to build necessary infrastructure.
Tennessee now has two IDD laws: the Residential Infrastructure Development Act of 2024, and the Real Estate Infrastructure Development Act of 2025. While they are very similar, there are key differences. In later blog posts, those differences will be discussed.
The legislative intent behind IDDs is to establish a uniform procedure for their creation and operation. This involves the levy and collection of special assessments, which are crucial for funding infrastructure projects. The bill emphasizes that IDDs serve as an alternative method, complementing existing municipal powers to create special improvement districts and issue bonds.
Importantly, IDDs do not infringe upon the jurisdiction of municipalities over their properties. Instead, they offer an additional layer of authority, allowing municipalities to manage infrastructure development more effectively. This dual approach ensures that while municipalities retain control, they also have access to a robust framework for addressing infrastructure needs.
In summary, IDDs represent a strategic approach to infrastructure development in Tennessee, balancing the need for growth with fiscal prudence. They empower municipalities with the tools necessary to manage development efficiently, ensuring that infrastructure keeps pace with urban expansion.
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CONTACTS:
Emily Lamb I 615.949.2360 I elamb@winstead.com
Emily Lamb is a dedicated land use and development attorney based in Tennessee. She assists clients in navigating the complex legal landscape surrounding property development and land use regulations.
Emily understands the unique challenges and opportunities that Tennessee’s dynamic growth presents. She provides strategic counsel and representation to developers, landowners, and community stakeholders, guiding them through zoning, permitting, and regulatory compliance matters. Whether it’s a large-scale commercial development or a single-family home project, Emily brings a thorough understanding of local laws and procedures to ensure her clients’ interests are protected and their goals are achieved.
Ross Martin I 214.745.5353 I rmartin@winstead.com
Ross Martin focuses his practice on public finance, special districts and public law. He serves as general counsel and bond counsel to special districts, including municipal utility districts, fresh water supply districts, special utility districts, municipal management districts, water control and improvement districts, and other improvement districts providing water, sewer, drainage, roadway and transportation infrastructure for master-planned developments, commercial developments and mixed-use developments.
Will Stout I 615.949.2363 I wstout@winstead.com
Will Stout provides legal counsel to owners and developers on commercial construction and real estate development projects. Drawing on his engineering background, he gains practical insight into real estate and construction challenges and encourages collaboration among project stakeholders, including owners, developers, municipalities, counties, general contractors, architects, designers, engineers, and subcontractors. This approach ensures timely identification and proactive resolution of potential issues.
Elizabeth Holland I 615.949.2354 I eholland@winstead.com
Elizabeth Holland is a member of Winstead’s Real Estate Development & Investments Practice Group where she represents developers, investors, and corporate clients in a broad range of commercial real estate transactions. Her practice focuses on real estate acquisitions, dispositions, financing, development and leasing.
Elizabeth has extensive experience handling multi-million-dollar transactions involving office buildings, retail and lifestyle centers, industrial properties, medical facilities, and single-family rental portfolios. She is committed to providing strategic and practical counsel to help clients navigate complex real estate matters efficiently and effectively.
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