An example of an established City Improvement District is the Cape Town Central City Improvement District. This CID covers the areas bordered by these roads in central Cape Town: Buitengracht, Buitensingel, Orange, Grey's Pass, Queen Victoria, Wale, Spin, Plein, Roeland, Canterbury, Darling, Castle, Strand, Adderley, Heerengracht, Old Marine, Civic, Hertzog Boulevard, Oswald Pirow and Table Bay Boulevard. The Cape Town Partnership manages the Cape Town Central CID.

The service contract between the Cape Town Central CID and the City of Cape Town says that the City of Cape Town must provide extra guaranteed services in the Cape Town CID area over and above normal services, in return for the CID levy.

The CID levy is a dedicated levy: the money raised from the levy must go to the CID. This means that the levy must be used for services in terms of the business plan agreed to by property owners in the CID and cannot be redistributed for use outside the CID. Levies charged to property owners are sometimes paid by property owners, or sometimes passed on to tenants, in the same way that rates are.

Any owner of property that pays rates in the City of Cape Town area can apply to the Cape Town Council for a CID to be approved. The person making the application must pay all costs involved in the application process. The management body of the CID eventually created can reimburse some of these costs to the applicant if the application is successful.

The process involves advertising for a public meeting to be held, the holding of a public meeting to discuss the CID, submitting a written application which must include an improvement plan, payment of a fee to the Council, advertising the application and considering objections to the application, getting a City Council decision, and getting majority support from ratepayers.

The written application must have the written approval of at least 25% in number of the owners of rateable properties in the area, and these owners must represent 25% of the rates-based value of the properties in the area.

If the Council approves the application, the CID must within six months of approval of the application get the written agreement of property owners in the area that together own at least 50% of all properties in number and at least 50% of the rates base.

Only once this majority agreement has been obtained, can the management body implement the City Improvement District Plan. The management body must be a non-profit company (established in terms of Section 21 of the Companies Act), which must be created before the implementation of the City Improvement District Plan.

National Government is in the process of drafting a new law called the Local Government Property Rates Bill. This new law provides for 'special rating areas' (clause 19), and gives guidelines as to how metropolitan municipalities like Cape Town should deal with special rating areas. CIDs are special rating areas. Any by-law passed will have to comply with this new law. There is only one metropolitan municipality in the Western Cape at the moment, being the City of Cape Town. The Demarcation Board decides which areas are metropolitan municipalities.