Agenda - Planning Commission - 01/03/2008

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Zoning for Successful Transferable Development Rights Programs By Tom Daniels " Good development design and the protection of large areas of farmland, open space, and natural areas are two primary goals of smart growth. Yet achieving these goals in a common process is often elusive. Since the late 1960s, the transfer of development rights has held considerable promise for preserving rural landscapes by moving development potential from the countryside into designated growth areas. To date, thousands ofTDR transactions have occurred, but not as many as some pro- ponents might have hoped. erty values. In areas designated for resource protection, rural landowners may resist sug- gest~d downzonings that may be used in con- junction with mRs because they perceive a loss in property values. There are several ways local govern- ments can use the zoning ordinance to create effective mR programs. But first it is important to understand how the TOR process works. HOW THE TRANSFER OF DEVELOPMENT RIGHTS WORKS SENDING AREA (ZONED AGRIGULTURE) Farm Parcel A sends TORs Farm is preserved through a conservation easement. RECEIVING AREA (R-2, MEDIUM DENSllY RESIDENTIAL) Housing Development Parcel B purchased mRs allow more housing unitS. Developer buys mRs on Farm Parcel A and transfers them to Parcel B. Developer can then build more housing units than zoning ordinance would normally allow. Parcel A can no longer be developed, except for farming. Source: Adapted from Daniels and Bowers. 1997. P.173. A major obstacle to the creation of effec- tive mR programs has been local zoning. A local governmenfs by-right zoning may allow ample development opportunities for developers who choose not to acquire mRs, and local elected officials may choose to grant greater densities through bonus zoning without requiring that developers acquire and apply mRs. Also, devel- opers may be wary of encountering bureaucratic and procedural delays if they propose a devel- opment that uses mRs, compared to a develop- ment that simply follows by-right zoning. Within designated growth areas, local residents may oppose increased densities that come with developments that use mRs, for fear that the increased density will not be well designed, will result in more congestion, and will reduce prop- 88 WHAT IS A TRANSFERABLE DEVELOPMENT RIGHT AND HOW DOES IT WORK? A transferable development right is the right to create a residential building lot orto construct a dwelling unit or build additional square footage onto a commercial, industrial, or residential structure. A IDR is not one of the rights that come with property ownership. A mR must be created through state enabling legislation and a local ordinance to allow.a landowner to transfer a development right to another p.arcel owned by someone else. A local government creates a market in development rights between landown- ers in designated preservation areas (sellers) and developers (buyers) who can then use the mRs to build at a higher density in the desig- nated growth areas. A local government creates a mR program through four main steps. Rrst, the local govern- ment identifies one or more sending areas from which mR will be moved and gives landowners in the sending areas a certain number ofmRs. For instance, Montgomery County, Maryland, gave landowners in its sending area one mR for every five acres owned. So a landowner who had 100 acres received 20 mRs. This allocation formula, together with the size ofthe sending areas, determines the total potential number of mRs available. Next, the local government must identify one or more receiving areas that could accom- modate higher density development than cur- rently exists in the receiving area. Then the local government determines how manymRs a developer must acquire from one or more landowners in the sending areas in order to receive approval for increased density. For instance, Montgomery County allowed one additional dwelling unit on an acre for each TOR a developer purchased and applied to a residential development project in the receiv- ing area. The local government must set a maximum for the total potential number of mRs that can be applied in the receiving areas, thus establishing the maximum amount of development those receiving areas can accommodate. Rn~lly, the local govern- ment must set up a process for: e confirming the use ofTORs by a developer; e placing a conservation easement on lands in the sending area from which mRs have been sold; and e. keeping track of how manyTDRs landown- ers in the sending areas still have. A developer will need to execute a deed of transferable development rights to show ZONING PRACTICE 12.01 AMERICAN PlANNING ASSOCIAll0N I page 2