The vacant lots and half-finished subdivisions that dot the landscape around Tampa and other Florida cities tell a larger story than a housing bubble that's popped.

The empty spaces and sparsely built streets are evidence of a messy financial residue that some experts say could represent the next wave of trouble for investors the weakened state of municipal bonds. Munis, a $3 trillion corner of the market once thought to be almost risk-free, are seeing more defaults, and while the numbers for busted bonds remain small, they're growing, and so are investor fears.

"Everyone is concerned," says Matt Fabian, managing director of Municipal Market Advisors, a research firm that keeps track of most of the 60,000 muni bonds on the market, about one-third of which are rated by agencies such as Moody's, Fitch Ratings and Standard & Poor's. "There are lots of questions over whether a collapse will start."

In Florida, developers issue municipal bonds through entities called Community Development Districts to pay for roads, water and sewer lines and other infrastructure needed to support a new neighborhood. They're often called dirt bonds because they are backed by land that will be intended for development, and they represent $6.5 billion of dirt debt issued between 2003 and 2008, according to Richard Lehmann, publisher of the Distressed Debt Securities newsletter in Miami Lakes, Fla.

Census data show that the housing boom has added 1.2 million new homes in Florida since 2000, but the messy aftermath spawned 129 issues now in some form of default in that state alone. (When a bond is in default, its holders either aren t receiving their payments or issuers have had to pay out from cash reserves built into their bonds, rather than from revenues they generate.) That represents $2.5 billion in debt, according to Municipal Market Advisors.

Among the largest defaults is a $109 million complex of bonds that was meant to finance the West Village development in Sarasota County, but there are more to come, says Lehmann. One on his watch list of troubled bonds, which is now at about 80 issues, is the $9.6 million Ballantrae Community Development District in Pasco County, north of Tampa. The West Village development and the Ballantrae Community Development District could not be reached for comment before publication.

Statewide, there is roughly $2.7 billion in debt that's on the brink, Lehmann says.

Most dirt bonds were set up in the midst of a housing boom where speedy sales made two- or three-year repayment schedules realistic. In a cratered market, it could take 10 years to sell houses on these plots, making repayment unlikely, says Lehmann. Faced with the impossibility of paying bondholders with proceeds from new home sales, "most of them opted to walk," he says.

Most of these dirt bonds are owned by big mutual-fund companies, which have minimized their investors' fallout by putting them in diverse, mostly high-yield bond funds. In March, Eaton Vance sold off $36.8 million in bonds for a development outside of Jacksonville. Thomas Metzold, the company's co-head of municipals, told Bloomberg News at the time that it was better to take the loss than wait for foreclosure.

That small transaction shows that these aren't big, public failures like Orange County's historic $110 million pension fund bond default in 1994. However, these troubled bonds serve as a reminder that the current economic mess could have more woes in store for investors, especially people who bought munis because they're mostly tax free and seen as stable and steady.