This exhibit supplements the section of the Discussion Paper entitled "Where Has TDC Been Used?" These case studies appeared originally in the book Saved By Development. Some have been updated to reflect new information learned since that book was published in 1997.They are organized here in the same order in which they appear in the book.

Boulder County, Colorado, page 2

Calvert County, Maryland, page 7

Dade County, Florida, page 10

Long Island Pine Barrens, New York, page 13

Malibu Coastal Zone, California, page 18

Montgomery County, Maryland, page 28

Morgan Hill, California, page 34

New Jersey Pinelands, New Jersey, page 37

San Luis Obispo County, California, page 47

Tahoe Regional Planning Agency, California/Nevada, page 56

Alachua County, Florida, page 60

Blue Earth County, Minnesota, page 62

Buckingham Township, Bucks County, Pennsylvania, page 63

Eden, New York, page 67

Gallatin County, Montana, page 70

Groton, Massachusetts, page 73

Hillsborough Township, Somerset County, New Jersey, page 75

Hopewell Township, York County, Pennsylvania, page 77

Island County, Washington, page 79

Manheim Township, Lancaster County, Pennsylvania, page 81

Marin County, California, page 83

Palm Beach County, Florida, page 85

Perinton, New York, page 88

Pitkin County, Colorado, page 90

Queen Anne’s County, Maryland, page 92

San Mateo County, California, page 94

Sarasota County, Florida, page 97

Shrewsbury Township, York County, Pennsylvania, page 99

South Burlington, Vermont, page 102

Springfield Township, York County, Pennsylvania, page 103

Sunderland, Massachusetts, page 105

Talbot County, Maryland, page 108

Washington Township, Berks County, Pennsylvania, page 110

In 1981, Boulder County adopted a clustering technique known as a non-urban planned unit development, or NUPUD. This technique allows a density bonus for on-site development when at least 75 percent of a parcel is permanently preserved by a conservation easement. In 1989, the program was expanded to allow the density bonus gained by NUPUD to be transferred to a non-contiguous parcel; this process, known as non-contiguous non-urban planned unit development, or NCNUPUD, provided additional bonus density for transferring, as explained below. The NCNUPUD process was not extensively used in the early 1990s because receiving sites were not pre-designated; developers were reluctant to go through the discretionary approval process and face public hearing testimony from the owners of property adjacent to the receiving sites.

Elected officials and staff recognized that the County’s original TDR program was limited in only being able to transfer development into unincorporated portions of the County. They saw a need to transfer development rights from the unincorporated parts of the County to the cities, where concentrated development is more appropriate. In 1994, Boulder County and the City of Boulder jointly prepared and adopted a draft framework for the Boulder Valley Transfer of Development Rights Program. The planning area for this program included the unincorporated portion of the County adjacent to the City of Boulder, known as Boulder Valley, as well as the City of Boulder, population 95,000, located 20 miles northwest of Denver.

The Boulder Valley TDR program marks a significant step forward from the NCNUPUD process because it identifies sending sites, receiving sites and the number of TDRs that can be transferred between these areas. While some receiving sites are within the unincorporated portions of the County, many receiving sites are within the City of Boulder.

The Boulder Valley TDR Program is implemented through an inter-governmental agreement between the City of Boulder and Boulder County adopted in 1995. Between 1995 and 1997, agreements were signed with two other cities and one unincorporated community, as listed below.

In addition, IGAs were discussed with another city and two incorporated towns, as listed below. (See "Program Status" for update on IGAs.)

• Lyons, population 1,300, is an incorporated town located 14 miles north of Boulder.

Since 1981, Boulder County has encouraged open space preservation via a clustering option known as a non-urban planned unit development, or NUPUD. With this process, base density can be doubled, from one unit per 35 acres to two units per 35 acres, with an additional unit per each additional 17.5 acre increment, if the property owner concentrates all development on 25 percent or less of the property and preserves the remaining 75 percent or more with a conservation easement. By 1995, over 10,000 acres had been permanently protected using this technique.

In 1989, the County introduced transfers of development rights through a process called non-contiguous non-urban planned unit development, or NCNUPUD. The County relied on the PUD process because Colorado state law did not explicitly authorize the use of TDR. The NCNUPUD process allows a single PUD to encompass two or more non-contiguous sites and, furthermore, allows development rights to be transferred between these non-contiguous properties.

By using NCNUPUD, receiving sites can achieve a density of up to three times that permitted under the older NUPUD process. For example, a 35-acre site would be allowed one unit by right, two units through NUPUD and six units by NCNUPUD. Sending and receiving sites are not pre-designated but the County controls the direction of the transfer. Specifically, development rights can be transferred from mountain parcels to plains parcels and from one plains parcel to another plains parcel. However, development rights cannot be transferred from a plains parcel to a mountain parcel.

The NCNUPUD process has not as yet been as popular as the NUPUD process. Since the receiving sites are not pre-designated, the applicant must prove that the proposed parcels meet the criteria for receiving sites. The owners of property near the proposed receiving sites are likely to contest the transfer at the required public hearings and this creates an uncertainty about whether or not each individual application will be approved.

As discussed above, the County has recently started programs to transfer development rights from county land to incorporated cities. Despite this new development, the NCNUPUD process is still available in most parts of the County; however, as mentioned below, the inter-governmental agreement (IGA) between the County and the City of Boulder prohibits NCNUPUDs in the part of Boulder County that is within the boundaries of that IGA. This prohibition was a response to the City’s concern that NCNUPUDs would occur in areas designed for preservation under the IGA.

The Boulder County TDR program made a significant step forward upon the adoption of the Boulder Valley TDR Program and its implementation through an IGA between the County and the City of Boulder. Under the new program, owners of sending sites can develop these sites at a density of one unit per 35 acres or transfer development at a rate of two units per 35 acres, a transfer ratio of two-to-one. If deliverable agricultural water is attached to the sending site and an interest in that water is granted to the County, the ratio can be increased to three units per 35 acres.

The process starts when an owner submits a conservation easement for a sending site in order to obtain a Development Rights Certificate. These certificates can be used to increase the density of PUDs at designated receiving sites as long as the proposed development is compatible with the surrounding neighborhood and mitigates potential infrastructure and environmental impacts. Each individual community determines the maximum amount of additional density which will be allowed on the receiving site by TDR.

While these and other procedures remain constant, the Boulder County program is actually several separate TDR programs regulated by separate IGAs between Boulder County and each individual city. The most detailed IGA, adopted in April 1995 as the "Boulder Valley TDR Comprehensive Development Plan", is between Boulder County and the City of Boulder.

In general, this IGA combines the City of Boulder’s commitment to accept transferred development rights from the County and the County’s commitment to preserve rural character. More specifically, the County agrees not to approve NCNUPUDs within the Plan Area or NUPUDs within the Planning Reserve Area unless they are jointly approved by both the City and County. Correspondingly, the City agrees not to annex unincorporated land or otherwise allow development that is contrary to the jointly-adopted Boulder Valley Comprehensive Plan.

The TDR Plan identifies four categories of sending sites: 1) the Rural Preservation Area; 2) the Accelerated Open Space Acquisition Area; 3) the Northern Tier Lands; and 4) Private Land Enclaves lying between the Boulder Mountain Parks and the Arapaho-Roosevelt National Forest west of the City. The receiving sites include land within the boundaries of the City of Boulder’s community service area, areas being annexed to the City in accordance with the provisions of the Boulder Valley Comprehensive Plan (BVCP) or lands within a rural planning area that have been approved under the provisions of the BVCP. Another area, Planning Reserve Area, is suitable for urban development in the long-term future; but in the near term it is planned to remain rural and cannot be used as a receiving site.

Under the IGA, the City of Boulder agrees to accept up to 250 development rights. Certificates of Development Rights are issued only after a conservation easement, precluding further development and granted jointly to the County and City, is recorded for the sending site. The IGA further requires the City and County to establish a joint committee to monitor the progress of the TDR program. The Agreement also prevents the County from making any changes to its NUPUD or NCNUPUD regulations without the City’s consent. Finally, the IGA between Boulder City and Boulder County terminates five years after its effective date.

The IGA between the County and the City of Lafayette became effective in December of 1995. This IGA is actually the latest in a series of agreements, beginning in 1984, in which these two jurisdictions agree to cooperate to protect rural lands. This agreement is similar to the IGA with the City of Boulder. However this IGA does not limit the number of development rights which can be transferred to Lafayette. In addition, this TDR plan clearly limits the sending sites to designated areas within a 27-square-mile Plan Area that extends from one to four miles in each direction from the Lafayette City Limits.

The IGA with the City of Longmont became effective in January of 1996. This IGA designates the Longmont TDR Planning Area Boundary which incorporates approximately 80 square miles surrounding the City of Longmont. About 50 square miles at the periphery of this TDR Planning Area constitutes the sending area. Designated receiving sites are located closer to Longmont’s City Limits, within the Longmont Planning Area Boundary. This IGA also specifies that the County or Longmont may sell the development rights that they acquire. This IGA expires in ten years.

In 1996, Boulder County also amended its land use code to create a TDR program specifically for the unincorporated settlement of Niwot, which is located between the cities of Boulder and Longmont. Because the area is entirely within the County, an IGA was not needed. Nevertheless, the code amendment designates a Niwot TDR Plan Boundary. Potential sending sites are any properties on the County-wide map of sending sites and the sending sites identified in individual IGAs with other communities as well as the properties depicted on the Niwot Sending and Receiving Area Map. Owners continue to be able to develop on these sending sites at a density of one dwelling unit per 35 acres. However, owners are now able to transfer development rights from the sending site at a rate of two units per 35 acres, a two-to-one transfer ratio.

The potential receiving sites are identified on the Niwot map; to qualify, a developer has to demonstrate that a proposed receiving site is not located on prime farmland, designated open space, environmentally-sensitive lands or critical wildlife habitat and that the proposed receiving site can be provided with adequate facilities and services. The baseline density on the receiving sites is two units per 35 acres. Receiving site projects can be approved, through the PUD process, only after 15 requirements have been met.

Finally, the ordinance allows only a maximum of 93 units to be transferred into the Niwot receiving areas. Furthermore, the code creates eight subareas. Each has a fixed percentage of the available development rights that can be transferred to designated receiving areas adjacent to Niwot. The percentage is based in large measure on the importance of the particular subarea to the Niwot community for open space buffer land functions. Remaining rights in the sending subareas can be transferred to sites outside of the Niwot planning area.

In addition, the County-wide process can be used to transfer development rights in those parts of the County which are not located within any of the TDR planning areas designated through the intergovernmental agreements.

The County’s clustering technique, NUPUD, has preserved over 10,000 acres of land so far. But the original transferring mechanism, NCNUPUD, has been used only five times between 1989 and 1998. Peter Fogg, Manager of the County’s Long-Range Planning Division, reports that demand for rural lots continued through the recession of the early 1990s. Nevertheless, builders preferred to use the NUPUD process even through the NCNUPUD process could yield three times the density.

According to Mr Fogg, the development community was leery of NCNUPUD because it was considered to be complex and time-consuming. Developers were particularly concerned by the uncertainty inherent in a decision made by a planning commission and county commissioners via a public hearing process. NCNUPUD hearings are likely to be contentious because the receiving sites are not pre-determined; communities have not even discussed, much less accepted, the concept of increased receiving site densities, leaving these issues to be argued for the first time at the NCNUPUD hearing.

Despite these drawbacks, the NCNUPUD process may see increased use in the future. It is still available everywhere in Boulder County except the Boulder Valley IGA area surrounding the City of Boulder. Developers should be attracted by the ability to achieve six times the baseline density limit by using NCNUPUD. This bonus ratio is significantly higher than the two-to-one ratio offered by the County’s new inter-jurisdictional TDR program. Boulder County’s new TDR program, implemented through inter-governmental agreements has many impressive features. By transferring development rights from unincorporated County land to incorporated cities, the program clearly addresses the goal of preserving rural land and concentrating development where it can be efficiently served. In fact, with some exceptions like Morgan Hill, California, the New Jersey Pinelands, the Long Island Pine Barrens and the Tahoe Regional Planning Agency area, there are few programs so far which have been able to gain the inter-jurisdictional cooperation needed for a program which allows transfers between separate municipalities.

Since Saved By Development was published in 1997, Boulder County has executed inter-jurisdictional agreements with four more cities, allowing development rights to be transferred from county land to sites within seven incorporated cities. Furthermore the inter-jurisdictional program has now been used on four transfers and, as of December 1998, two more projects were in the review process as of the end of 1998. If these two projects are approved, between 2,730 and 3,470 acres will be permanently preserved depending on whether or not the sending sites retain their water rights.

In the Calvert County program, sending sites are properties in the Agricultural Preservation District. In this District, on-site development can occur at a maximum density of one dwelling per 25 acres and transfers can be made at the rate of one dwelling per five acres. Consequently, at an initial glance, the Calvert County program appears to be similar to the program in Montgomery County, Maryland. However, there is a major difference. In Calvert County, land can only be placed in the Agricultural Preservation District at the request of the owner. Without the request for the Agricultural preservation District zoning, the sending site owner is limited to building on site at a density of one dwelling per five acres.

Land in Calvert County is about equally divided into two basic land use categories. Land in the Farm Communities/Resource Protection District generally lies around the perimeter of the County. The Rural Community District is located in the center of the County. The Farm Community/Resource Protection District allows an average of one dwelling unit per five acres; property owners in this District may apply for an Agricultural Preservation District through a process described below. Property owners in an Agricultural Preservation District may sell development rights for use in the Rural Community District.

Land in the Rural Community District is allowed an average of one dwelling unit per five acres. However, through approved transfers, the density in this district is allowed to increase to an average of one dwelling unit per two acres; in areas close to Town Centers, density is allowed to go even higher via TDR.

The rules and regulations which guide the agricultural preservation process in Calvert County explicitly state that the program is designed to use the free market system to finance agricultural and forestry preservation. To assist this process, the County uses an Agricultural Preservation Advisory Board appointed by the County Commissioners. The Advisory Board makes decisions on the creation of Designated Agricultural Areas and Agricultural Preservation Districts. The Board makes the final decision on Designated Agricultural Areas and Agricultural Preservation Districts; any aggrieved parties may appeal the decision to the County Circuit Court.

In one of its primary duties, the Advisory Board forms Designated Agricultural Areas, land in the County having the greatest potential for maintaining a viable agricultural or forestry production. In making this decision, the Board considers various guidelines including soil classifications and whether or not the size of the proposed area is adequate to permanently function as an agricultural unit. Development rights cannot be transferred to land in a Designated Agricultural Area. The Advisory Board also approves or rejects all applications from property owners to place land in Agricultural Preservation Districts. Owners of prime agricultural or forest land voluntarily ask the Advisory Board to consider designating their land as Agricultural Preservation Districts. The program guidelines contain several requirements for Agricultural Preservation Districts: they must be within Designated Agricultural Areas or contain at least 50 contiguous acres; at least 75 percent of the proposed District must be suitable for cropland or managed forest land; and the land must meet one of six soil classification criteria.

The owners of land enrolled in Agricultural Preservation Districts may withdraw their land after five years if development rights have not been transferred from the land during that time. Land within an Agricultural Preservation District may not be subdivided. However, if no development rights have been transferred, parcels with at least 25 acres are allowed to be developed at a density of one unit per 25 acres, with a maximum of three lots on parcels 75 acres or more in size. Once all development rights have been transferred from a parcel, the parcel must retain the Agricultural Preservation District designation and the density of that parcel cannot exceed one dwelling per 25 acres up to a maximum of four lots per parcel regardless of size. No commercial or industrial activities are allowed in Agricultural Preservation Districts with certain exceptions for mining.

Landowners in Agricultural Preservation Districts may transfer development rights. The transfer rate is one dwelling per five acres of land within the Agricultural Preservation District; the rate is even higher for land in a special classification. In other words, the number of units which can be built on site is equal to the number of units which can be transferred off-site; this is also known as a one-to-one transfer ratio. Despite this apparent lack of incentive, the Calvert County program is thriving for two reasons.

Calvert County’s agricultural preservation program is also designed to provide further protection to agricultural land by permanently removing TDRs from the market before they can be used to allow development. This goal is accomplished through the Purchase and Retirement (PAR) Fund. On an annual basis, the Advisory Board ranks applications for TDR purchase by the PAR Fund using ranking criteria which consider land use, location, parcel size and soil classifications.

To this point, the discussion has dealt with sending sites. The Calvert County program is equally concerned with receiving sites. Receiving sites may only be located in overlay zones with a designation of Transfer Zone District or TZD. These TZDs include Town Centers and Rural Communities which were comprehensively designated.

The designation of a new TZD requires a recommendation from the County Planning Commission. After consideration of that recommendation and holding a public hearing, the County Commissioners may designate a TZD. There are several criteria for designating TZDs: TZDs cannot be located in Designated Agricultural Areas, Designated Farm Communities, Resource Preservation Districts or Critical Natural Areas; if a TZD is proposed to be located within a major subdivision, all property owners in that subdivision must sign the TZD application; and at least 50 percent of the site of the proposed development must be designated as open space.

One additional dwelling unit in excess of zoning density may be built in a TZD for each five development rights transferred from an Agricultural Preservation District. With TDRs, density can increase from an average of one unit per five acres to one unit per two acres, a density bonus of 150 percent. With TDR, densities can go even higher in areas near the Town Centers where the Town Center ordinances take precedence.

According to Gregory Bowen, Deputy Director of the Calvert County Department of Planning and Zoning, the success of the program is primarily due to strong demand for additional density in the potential receiving sites. On the sending sites, property owners can build at an average density of one dwelling per five acres or sell the right to build one dwelling for each five acres of land. However, on the potential receiving sites, TDR allows the average density to go from one dwelling per five acres to one dwelling per two acres or greater.

In some communities, that differential might not be sufficient to motivate transfers. But in Calvert County, that difference is significant because TDRs are valued at $2,200 per acre while raw land values are at least twice that amount. As a purely hypothetical example, if a developer wants to build a ten-unit complex, he could buy 50 acres of land and spend $220,000. Or he could buy 20 acres of land and 30 TDRs (five TDRs are needed for each additional unit) and spend $154,000 to achieve the same density. This is a substantial cost savings considering the fact that Calvert County developers charge roughly the same amount for a house regardless of whether it is on a 5-acre or a 2-acre lot. Due to this economic incentive, most Calvert County developers want to use TDR.

The value of TDRs depends, of course, on demand. In the early 1980s, TDRs in Calvert County cost from $600 to $800 each. By the late 1980s, demand for TDRs exceeded supply and the value rose to $2,200. Due to the slow economy, the demand for TDRs, as well as new development, has leveled off in the 1990s. If demand again exceeds supply, the price of TDRs will rise once more. However, the price of raw land should also experience a comparable increase. So as long as raw land values are substantially higher than TDR prices, these economic forces should continue to drive Calvert County’s TDR program.

In addition to economic forces, there is another important success factor related to the sending site owners in Calvert County. According to Gregory Bowen, the sending sites are typically developable; the sites are not usually burdened by extraordinary site-improvement costs and, despite environmental regulations, the owners can typically achieve the maximum density allowed by zoning. However, these sending site owners are often genuinely interested in preserving their land in farming and other rural uses. For example, the first transfer approved in the County involved a parcel of land that had already been subdivided but not yet developed; the owner simply decided to preserve the land rather than build.

Given this preference to retain rural character, many sending site owners view TDR as just a way of obtaining additional funds to purchase agricultural equipment or build their retirement accounts. To many of these sending site owners, the imposition of an Agricultural Preservation District designation on their property merely requires the continuation of an activity that they intended to continue anyway.

The Calvert County TDR program has permanently preserved 7,000 acres of agricultural and forestry lands making this program one of the most successful in the United States. Consequently, Calvert County is well on its way to its goal of preserving over 20,000 acres.

Dade County, population 1.9 million, occupies the southeastern corner of the Florida peninsula. Containing the Miami metropolitan area, Dade County is the most populated county in the state. Yet over half of the County’s land area is in the Everglades.

The Everglades originally consisted of a gently sloping wetland flowing in a 40-mile-wide path from Lake Okeechobee 100 miles south to the mangrove and coastal glades of Florida Bay. This huge wetland flushes and recharges the coastal aquifers and reduces salt-water intrusion near the coast.

For decades, there has been a recognition that man-made alterations are reducing the ability of The Everglades to replenish the groundwater and perform various other environmental functions. In 1980, a proposed management plan was prepared for the East Everglades area, the 242-square mile portion of The Everglades that covers the western half of Dade County. The plan recognized that protection of the Everglades is critical to supplying freshwater to metropolitan Dade County, the Florida Keys and Everglades National Park. The plan also described how preservation of The Everglades was needed for flood control, commercial fisheries, recreation, wildlife habitat and the efficient provision of utilities and public services.

In 1981, the Dade County Board of County Commissioners adopted the East Everglades Ordinance. This ordinance exhaustively describes the environmental characteristics of the area from the standpoint of geology, groundwater, physiography and topography. It then declares that the East Everglades is an Area of Critical Environmental Concern because it recharges the Biscayne Aquifer, provides a surface water supply to Everglades National Park, creates flood storage capacity, maintains water quality, protects the economic vitality of Dade County and contains numerous natural features including 30 endangered or threatened species. Finally, the ordinance implements its goals and policies through land use regulations and procedures, including the ability to transfer development rights.

In 1981, Dade County adopted a severable use rights (SUR) ordinance which became effective in 1982. Potential sending sites are parcels in the East Everglades and eligible receiving areas are unincorporated lands within the urban boundary line designated in the County’s Comprehensive Development Master Plan.

The amount of SURs available to sending sites varies depending on the management area of the East Everglades in which the sending site is located. The ratio varies from one SUR per five acres to one SUR per 40 acres. The expectation of being able to develop is usually highest in Management Area 1 because land in this sub area is generally closest to urban areas and contains altered wetlands and agricultural lands with some existing residences. Some of this management area is allocated one SUR per five acres. However, even within Management Area 1, the expectation of being able to develop depends on whether or not the land in question is protected from flood waters.

As a matter of right, the owners of parcels in Management Area 1 may build homes on these parcels at a density of one unit per 40 acres. Since SURs can be generated at the rate of one SUR per five acres, the land in this management area can carry a substantial transfer ratio of eight to one.

Management Area 3B contains agricultural lands that are further removed from urbanized areas; in this management area, one SUR is allocated per 12 acres. In Management Area 3C, considered a transitional area, one SUR per 40 acres is allowed. The remaining management areas have water at or above the surface for at least three months per year; the County determined that this land has no realistic development value and no SURs are available in these areas. Any potential sending parcels which are smaller than these minimum lot sizes but were legally entitled to develop one dwelling unit prior to 1981 can be allocated one SUR if the property owner registered within one year of the adoption of the severable use rights ordinance.

In addition to density limits, the East Everglades Ordinance imposes strict environmental regulations within the sending areas. For example, new roads are not allowed in some management areas and, where roads are allowed, they must be designed to allow the natural sheet flow of water. Similarly, no excavation is allowed in the East Everglades except for agriculture. As a result, regardless of the nominal density permitted by the code, property owners can find it difficult and expensive to develop in many parts of the East Everglades, providing a further incentive to transfer severable use rights rather than build on sending sites.

The SURs transferred from the sending sites can be used to deviate from density, lot area, frontage and other development requirements on residential and commercial receiving sites in the unincorporated portions of Dade County which are designated for urban development. In fact, only the environmental, open space, agricultural and recreation zones are ineligible to receive SURs.

The density increases which can be attained through transfers vary between the 18 different zoning districts which can receive SURs. For example, in the RU-TH Townhouse zoning district, a project using SURs can be granted a 10 percent reduction in the minimum lot size, a one-third reduction in the required front setback and an 18 percent increase in density, from 8.5 to 10 dwelling units per acre. In the commercial and office park zoning districts, SURs are converted to floor area ratio or FAR. For each SUR transferred, a receiving site in a commercial zone is granted an additional.015 FAR per acre as long as all other development and zoning code requirements are met. In the office park zone, an SUR allows an additional floor area of.010 FAR per acre.

To be granted an SUR density bonus, developers of receiving sites must demonstrate that they own the SURs, that these SURs have not already been used, that the SURs are recorded in the chain of title of the sending parcel and that the sending site has been restricted to residential uses. The Dade County program does not require a rezoning or any other discretionary approval of the receiving site. The use of SURs at a receiving site is a matter of right; however the administrative approval may be appealed by an applicant or any aggrieved party who alleges a misinterpretation of the code.

The Dade County program has many factors found in successful TDR programs. The Comprehensive Development Master Plan provisions encourage the use of SURs. Property owners are discouraged from developing on sending sites by environmental regulations and, in some areas, restrictive density limits. In some management areas, transfer ratios are as high as eight to one, providing a significant incentive to transfer SURs. The ordinance has eighteen different zoning districts which can receive SURs and the code clearly spells out the density bonus available to those who use SUR. Perhaps most importantly, the process is uncomplicated and administrative; this provides a level of speed and certainty that makes SURs more attractive to developers than discretionary approval processes such as rezonings.

In fact, the Dade County program is very successful. Within one year of the adoption of the East Everglades Ordinance, about 400 owners of land parcels that do not meet the minimum requirements for whole SURs registered, as required by the code, to convert these fractional SURs to whole SURs. The County does not attempt to track the number of SURs severed from sending sites. However, according to Tom Spehar, Dade County Principal Planner, 213 SURs had been transferred to receiving sites by the end of 1994.

In addition to a well-designed program, there is substantial demand for additional development in Dade County. Developers have found that it is often cheaper to acquire SURs than buy the additional land needed to accommodate more dwelling units. SURs can cost about $2,500 each when purchased directly from major SUR holders.

When purchased through an intermediary, SUR prices can range from $3,000 to $5,000. However, under the right circumstances, landowners can still benefit from purchasing these SURs at "retail" prices. For example, in some zoning districts, real estate agents can look for people who own less than two acres of land in a receiving area that is zoned at one unit per acre. By purchasing one SUR, these owners can create a second buildable lot from their properties using an administrative process that does not require a public hearing as long as all zoning codes are met.

As a result, SURs have been used for a wide range of residential projects from single-family lot splits to high-rise developments. However, to date, SURs have not been used for commercial projects. According to Tom Spehar, Dade County commercial and office buildings are typically surrounding by ample surface parking, creating a density that is usually lower than the density allowed by the zoning as a matter of right.

In addition to tough environmental regulations, significant SUR supplies are created as a byproduct of the land acquisition programs of the U.S. Army Corps of Engineers and the U.S. Department of the Interior. These federal agencies, pursuing watershed protection and environmental preservation missions, often acquire properties in The Everglades through condemnation. The SURs from these condemned properties remain in the possession of the former land owners.

There has been a debate about whether SURs are personal property or real property. The federal agencies consider SURs to be personal property which cannot be acquired via condemnation. This policy leaves the former owners of the condemned land with SURs to sell. While SURs can be transferred and held indefinitely, the sheer number of available SURs increases the likelihood that the price of SURs will remain attractive to potential buyers.

In essence, Dade County has a demand for additional density, a steady supply of density rights, and a transfer program that allows receiving site developers to use these rights through a simple, administrative approval process. Consequently, it is not surprising that Dade County has one of the more successful transfer programs in the nation.

Suffolk County, population 1.3 million, includes the entire eastern end of Long Island in the State of New York. In the center of Suffolk County lies the Long Island Pine Barrens, the largest single undeveloped area on Long Island. The Pine Barrens contain pitch pine and pine-oak forests, coastal plain ponds, marshes and streams which provide numerous recreational opportunities as well as open space. The area contains the largest concentration of endangered, threatened and special concern plant and animal species in the State, including dwarf pines. In addition, the Pine Barrens constitute the deep recharge area for one of the largest sources of groundwater in New York State, an aquifer that provides drinking water for much of Long Island.

Originally 250,000 acres in size, the Pine Barrens has been reduced by development to a 100,000-acre area shared by the townships of Brookhaven, Riverhead and Southampton. The Town of Southampton has had an individual TDR program since 1972 which is discussed in a separate case study. In addition, the Town of Brookhaven also had a TDR program which was designed to accomplish the same goals as the Pine Barrens program; the Brookhaven program was used on two or three occasions but was eliminated in 1994 in anticipation that the Pine Barrens program would be adopted.

In 1989, the three towns and Suffolk County were sued by environmental groups over whether or not more than 200 building projects should be allowed to proceed. In 1992, the New York State Court of Appeals agreed with the environmental groups that a protection plan for the area was needed. The New York State Legislature responded with the Long Island Pine Barrens Protection Act of 1993. This legislation created the Central Pine Barrens Joint Planning and Policy Commission consisting of representatives from each of the three townships, Suffolk County and the State of New York. The Commission was charged with developing a plan for the protection of the Pine Barrens. The State legislation referred to transfer of development rights as an optional means of implementation, but it did not require that TDR be incorporated in the plan.

In June of 1995, each of these jurisdictions adopted the Central Pine Barrens Comprehensive Land Use Plan. This plan divided the Pine Barrens into two areas: the 52,500-acre Core Preservation Area and the 48,500-acre Compatible Growth Area. The Core Area is designed for agriculture, recreation and other open space uses; new development is prohibited in the Core Area with some exceptions, as discussed below. The Compatible Growth Area permits appropriate patterns of growth, including some development redirected from the Core.

To implement these goals, the Plan seeks to purchase 75 percent of the remaining privately-owned vacant land in the Core; since approximately 14,000 acres within the Core are undeveloped and privately held, the Plan seeks to preserve about 10,000 acres through acquisition. At one time the State of New York and Suffolk County pledged to spend $70 million to buy land in the Pine Barrens. Owners of land in the Core can also use a transfer of development rights program called the Pine Barrens Credit Program as described below.

Sending sites in the Pine Barrens Credit Program include land within the Core area. In this area, owners can use their property for certain recreational uses and agricultural activities that do not require substantial alteration of native plants. Most residential development is prohibited except for the expansion of existing homes and development approved before June 1, 1993. In addition, property owners can apply to build on site using the extraordinary hardship provisions of the Pine Barrens Protection Act.

While new development is basically prohibited, one single family residence can be built on existing lots at least ten acres in size if the lots front on existing streets and are within areas that are already partly developed. This exception reflects the belief that a limited number of homes in the core area could serve a stewardship function by deterring illegal dumping and other activities that damage the environment. In addition, the exception recognizes the fact that lots on existing streets have greater value than lots that have no access; this higher value would have to be matched by a higher level of compensation if development is prohibited on these lots.

As an alternative to building on these sending sites, the owners of Core Area land may sell their property to public agencies, such as Suffolk County and the State of New York. Private developers may also buy these sending site properties in order to acquire the transferable development rights associated with this land. Alternatively, these owners can retain fee title to the sending sites but sell the development rights, referred to as Pine Barren Credits, or PBCs.

To determine the PBCs allocated to each sending site, the acreage eligible for PBCs must first be calculated by deducting areas already precluded from development by conservation easements and other deed restrictions. Then a development yield factor is multiplied by the number of dwelling units per acre allowed on the site under the zoning regulations in existence in June 1995, when the Plan was adopted. In general, this underlying density is either one dwelling per five acres or one dwelling per two acres. There are eight different yield factors; these factors result in the award of fewer PBCs to a site than the number of dwelling units allowed under the old zoning. For example, if the zoning allows four units per acre, the sending site is entitled to 2.7 PBCs per acre. Similarly, if the zoning allows one unit per acre, the sending site is granted 0.08 PBCs per acre. In addition, one PBC must be deducted for each existing dwelling.

Although these transfer ratios are negative, unlike most TDR transfer ratios, sending site owners should nevertheless be motivated to create and transfer PBCs; as discussed above, no development can occur in the core unless property owners are granted hardship exemptions or legislative amendments allowing one dwelling on an existing ten-acre lot along certain roads.

Furthermore, these sending sites are often smaller land holdings consisting of substandard, 40-by-100-foot lots created in the early 1900s. It would not be economical to develop many of these lots due to site constraints and the high cost of providing roads and other public services. As explained by Tim Hopkins, an attorney with the Suffolk County Water Authority assigned to the Commission, the owners often have an inflated opinion of the value of these lots based partly on the amount of tax payments made on these properties over decades. But the Commission estimates that the value of these lots is actually very low and that the ability to transfer development rights off of these properties at the rate set by the underlying zoning is more valuable than the questionable ability to develop the lots themselves.

This near-prohibition on sending site development is often categorized as a mandatory TDR program because the property owners must transfer in order to receive economic gain from the development potential of their property. As discussed in the chapter on legal issues in this book, mandatory programs have a greater obligation to ensure that the compensation mechanism is fast and fair; as shown below, the Pine Barrens program has features which address the compensation issue, including a bank authorized and funded to buy PBCs and receiving sites zoned to accept PBCs as a matter of right.

Pine Barren Credits are severed from sending sites in the process of obtaining Pine Barren Credit Certificates. To facilitate this process, the Commission has prepared a "Pine Barrens Credit Program Handbook: A User’s Guide to the Central Pine Barrens Transferable Development Rights Program". This handbook provides applications, sample documents and a user-friendly guide to the three steps needed to obtain Pine Barrens Credit Certificates.

In the first step of the process, a property owner submits an application to the Clearinghouse and the Clearinghouse issues a Letter of Interpretation identifying the number of PBCs available to the applicant’s parcel. If applicants disagree with the number of credits identified, they can follow a specified appeal procedure. It is possible to negotiate for the sale of PBCs, without actually receiving a PBC Certificate, using just this Letter of Interpretation. The Letter of Interpretation is valid for one year.

In the second step, the sending site owner must submit an application for a Pine Barrens Credit Certificate to the Clearinghouse along with the Letter of Interpretation, a title search to ensure marketable title, a survey and a copy of the proposed conservation easement. If an applicant uses the preapproved conservation easement provided by the Clearinghouse, the easement does not have to be reviewed by the Commission. Alternatively, applicants may draft their own easements as long as they restrict the sending sites in a way that achieves the Plan’s conservation goals. The Commission approves these proposed easements at this step to avoid the extra cost and time delay which can occur when a recorded easement has to be removed or modified because it does not meet the Commission’s standards.

In the third step, the conservation easement is recorded and a certified copy is sent to the Clearinghouse. The Clearinghouse verifies that the recorded easement is identical to the one approved by the Commission. Following an updated title search, the Clearinghouse issues a PBC Certificate. The owner of PBC Certificates may sell them, hold them for future use or redeem them to receive additional density at a receiving site. Whenever PBCs are sold, the Clearinghouse issues new PBC Certificates to the new owners. The Clearinghouse also maintains a Pine Barrens Credit Registry indicating the names and addresses of all people who have created, bought or sold PBCs.

Owners wishing to sell PBCs may consult lists of potential buyers provided by the Clearinghouse or may list their PBCs with a real estate broker. Alternatively, PBCs may be sold directly to the Clearinghouse. The State Natural Resources Damages Account contributed $5 million to the Clearinghouse to establish a revolving fund for this purpose. However the Commission’s goal is to develop a private-sector market for PBCs. The Clearinghouse purchases PBCs at a price established by its Board of Advisors.

PBCs are redeemed when they are used to increase residential density or non-residential intensity at a receiving site. Unless the town grants special permission, PBCs can only be used at receiving sites in the same town as the sending sites which generated the PBCs; in Southampton, the sending and receiving sites must be within the same school district also.

The Plan requires each of the three towns to identify receiving sites capable of accommodating 2.5 times the number of PBCs which could be created at the sending sites in that town. Furthermore, each town is required to establish "as of right" receiving areas where PBCs will be accepted without the need to obtain a special permit. These "as of right" receiving areas must be capable of accepting at least as many PBCs as the sending sites in that town are capable of generating.

In Brookhaven, the receiving sites include lands covered by a residential overlay which are not within specified environmental protection areas. By Planned Development, PBCs can also be used in Brookhaven to increase the intensity of Planned Retirement Communities as well as commercial and industrial projects.

In Riverhead, PBCs generated by residential development are allowed to increase intensity within non-residential receiving areas. The extra density is expressed as 300 gallons per day per acre of additional sewage flow.

In Southampton, as-of-right receiving sites are located in residential overlay zones. When the underlying zoning allows one unit per five acres, the use of PBCs would allow the density to increase to one unit per acre. In some cases, the density could increase to one unit per 0.5 acres; this 900-percent increase is one of the highest bonuses of the TDR programs included in this book. In areas zoned for one unit per acre, Southampton would allow transfer projects to achieve a density of one unit per 0.5 acres. To fully redeem PBCs in some school districts, Southampton would have to allow densities even higher than one unit per 0.5 acre; this would require a sewage treatment plant to be installed. Southampton also allows PBCs to be transferred to Planned Development Districts to facilitate tourism facilities, senior housing, medical centers and commercial uses.

The Pine Barrens program has many promising features. Sending site owners should be motivated to sell their development rights since they are prohibited, with some exceptions, from building on sending sites within the Core. Likewise, developers should be interested in buying PBCs since PBCs can be used to increase receiving site density by as much as ten times the baseline levels. The program has a Clearinghouse which distributes information to the public and buys PBCs when necessary. The Commission also has a staff of five people and can draw on support from the staff of the three townships, the County and the State. In addition, each Town has identified receiving areas where PBCs are permitted as of right; this certainty should make more developers interested in the program. Finally, unlike larger multi-jurisdictional TDR programs, like the New Jersey Pinelands, (with a planning area of one million acres), the Pine Barrens program has a smaller scale and a more manageable goal of preserving 52,500 acres.

The program, as of December 1998, has protected 261 parcels with a total area of 206 acres representing 177 Pine Barrens Credits. Of these credits, 63 have been used on receiving sites in the towns of Brookhaven and Southampton. In the 1999 registry, the Clearinghouse listed 26 potential purchasers and 209 potential sellers of Pine Barrens Credits.

The Malibu Coastal zone stretches along 27 miles of Pacific Ocean shoreline from the City of Los Angeles to the border of Ventura County. It also extends five miles inland to encompass the coastal terrace and a portion of the Santa Monica Mountains. Until 1991, the entire coastal zone was in unincorporated portions of Los Angeles County. However, the newly-incorporated City of Malibu now constitutes about one fifth of the coastal zone.

The extremely rare Mediterranean ecosystem found in the Santa Monica Mountains provides for exceptional biological diversity, with more than 900 species of plants, over half of the bird species found in the entire United States and habitat for mountain lions, bobcats and golden eagles. To protect a portion of this important natural resource, the Santa Monica Mountains National Recreation Area was created by the U. S. Congress in 1978.

In addition to natural resources, the Malibu Coastal Zone is known for natural disasters. Wildfires are a common occurrence. These fires burn the vegetation from steep and highly-erosive slopes making them vulnerable to landslides during the winter rainy season. The steep canyons are also highly susceptible to flooding.

This area is also extremely hard to provide with infrastructure. For example, access to the Malibu beaches is often difficult due to traffic congestion; yet the rugged coastal topography does not easily lend itself to new roadways or even the expansion of existing roads.

The mountains are also laced with thousands of small lots created prior to the advent of modern subdivision regulations. These lots were originally designed as sites for weekend cabins. Some of these lots, which are generally between 4,000 and 7,000 square feet each, are suitable for development. However, many are not.

Where these substandard lots have been developed, roadways are often inadequate, making access difficult, particularly if residents need to evacuate in advance of a wildfire. In addition, septic systems installed on small, steep lots can fail, causing raw sewage to enter nearby streams. In the late 1970s, coliform contamination exceeded standards in two Santa Monica Mountain creeks. These creeks enter the Pacific Ocean at some of the most popular beaches in Southern California.

Almost 5,000 of these substandard lots remained undeveloped in the late 1970s. Many of them are steep, inaccessible, not suitable for septic systems and difficult to serve with public utilities. Nevertheless, unless there are health or safety concerns, the County of Los Angeles considers every legally-created lot as having a vested right for the development of one single-family home. If all of the lots in these antiquated subdivisions were to be developed, there would be even more environmental damage and significantly more households exposed to wildfire, landslides, floods and traffic congestion.

Despite the well-publicized hazards and inconveniences of living in the Santa Monica Mountains, people continue to build new homes there. In fact, due to its natural beauty and proximity to Los Angeles, land in the Malibu area is highly desirable and extremely expensive.

The California Coastal Act of 1976 created the California Coastal Commission to safeguard coastal resources and ensure public access to the coast. The Coastal Act also requires all municipalities to adopt a Local Coastal Plan (LCP) to regulate development in a manner that protects the coastal zone. Until an LCP is certified, the Coastal Commission has the authority to approve or deny development applications in a jurisdiction. Since a certified LCP has not yet been adopted, the Coastal Commission has been regulating development in the Malibu Coastal Zone from 1977 to the present.

The Coastal Act states that new subdivisions can only be permitted where 50 percent of the existing lots are already developed. In 1978, 64 percent of the 13,475 lots of record in the Malibu Coastal Zone were vacant. Unless a solution was found, the Commission would have to allow the development of hundreds of substandard lots in antiquated subdivisions while denying new subdivisions which complied with modern environmental standards and which were located in areas suitable for development.

In 1978, a study was performed by the Santa Monica Mountains Comprehensive Planning Commission which recommended that future subdivisions not be permitted in the Malibu Coastal Zone which would increase the total number of lots. It suggested that development potential be transferred from existing substandard lots to specific areas capable of accommodating growth. A second study concluded that only one of the small lot subdivisions existing in the Malibu Coastal Zone met modern environmental standards. The report added that many of the lots were too steep to provide a good building site or allow for a septic tank leach field; many had no public water service or paved road access.

Prior to establishing a policy or preparing guidelines, the Coastal Commission began facilitating transfers in order to allow individual subdivisions. During one of these early transactions, a private broker asked that the Commission create rules and regulations to institutionalize the program.

Consequently, in 1979, the California Coastal Commission adopted guidelines for the location of new subdivisions and the mitigation of their impacts. These guidelines require that one existing lot be retired from development for each lot created through new subdivisions. As described in detail in the following section, these guidelines established a process for subdividers to buy TDCs from the owners of undeveloped substandard lots in order to be granted new subdivisions in the extremely desirable Malibu coastal area. The sending site owners receive compensation for the development potential of their substandard lots even though these lots are deed restricted from future development.

Through this TDC program, the Commission has allowed new subdivisions without increasing the overall development capacity of the area. In addition, the Commission can shift development from inappropriate areas without spending public funds to acquire substandard lots.

Elizabeth Wiechec, now a consultant, was Executive Director of the Mountains Restoration Trust from 1982 to 1992 and has written an excellent analysis of the Malibu program for the Santa Monica Mountains Conservancy. Most of the information in this case study comes from that 81-page publication entitled "Transfer of Development in the Malibu Coastal Zone". This highly-readable study not only provides insights into the Malibu program but also describes the more universal issues that have to be grappled with in any TDR program such as political acceptance, market forces and the need to adapt to changing circumstances.

The Malibu program is considered voluntary because sending site owners are not prohibited from developing their existing lots nor are they required to sell development rights for their substandard lots. The owners of receiving sites, on the other hand, must buy TDCs in order to create new lots. However, they can always develop one home on an existing, legal lot. Consequently, the program is not considered mandatory for the receiving site owner although the value of home sites in Malibu makes the purchase of TDCs and the subdivision of land economically attractive.

TDCs are only needed to create the additional lots, not to build on the original lot which existed prior to the subdivision. For example, the owner of a large legal lot would have to buy three TDCs in order to be granted a subdivision separating the original lot into four smaller lots.

Developers are highly motivated to buy TDCs because of the huge increases in land value that can be gained by subdividing land. According to Elizabeth Wiechec, the size of the lot is not as important as the size of building site. Consequently, splitting a 10-acre lot into four, 2.5-acre lots can produce a 300- to 400-percent increase in value.

The Malibu TDC program is not as yet included in an adopted Local Coastal Plan or zoning code. Instead, the program follows the process found in the guidelines adopted by the California Coastal Commission and will continue to be regulated by these guidelines until the certified Local Coastal Plan is adopted.

Originally, the guidelines confined potential sending sites to existing substandard lots in small lot subdivisions. Larger lots and undivided acreage were not at first allowed to be sending sites. However, the 1981 amendments to the guidelines allowed TDCs to be transferred from land parcels of any size within Significant Ecological Areas. The guidelines do not designate receiving sites other than to describe them as areas that are currently developed and capable of accommodating growth.

The guidelines also establish criteria for determining the number of TDCs available at a sending site within a small lot subdivision. One credit is assigned for any combination of small lots which total one acre or more regardless of whether these lots can actually be developed. Alternatively, one credit can be assigned for one or more small lots, regardless of size, which meet two criteria: they must be buildable, meaning they are served by an existing road and not located in a landslide or geologic-hazard area; they must be eligible to support a house consisting of at least 1,500 square feet of floor area according to a slope-intensity formula. As a third alternative, an owner may claim one TDC for three existing lots of at least 4,000 square feet each regardless of the floor area allowed under the slope-density formula. Finally, the Commission can allow increased credit value on a case-by-case basis, to land that offers exceptional public access opportunities.

When TDCs are severed from a sending site, the lot is retired from development through a scenic easement. The easement runs with the land in perpetuity and precludes residential development. The easement protects the site for light, air, view and scenic qualities. If stated in the easement, the property may be used for private recreational uses. However, these easements do not give the public any rights for use or entry. The easements are recorded free of any encumbrances, with any loans subordinated to the easement to provide protection from foreclosure.

To prevent abandonment, deed-restricted lots must be joined with adjacent lots. Los Angeles County does not allow the merger of contiguous lots in common ownership. To avoid the expense of removing the original lot lines by a process called reversion to acreage, the sending site owner records a Declaration of Restrictions. This agreement ensures that the lots are treated as a single parcel of land which cannot be divided or sold separately.

The TDC is approved for transfer from the sending site after the Coastal Commission has accepted the scenic easement and authorized the recordation of all documents.

As described in the preceding section, the Malibu Coastal Zone TDC program began with individual transfers facilitated, at first, by the Coastal Commission staff and, later, by private sector brokers. In addition to the time consumed in negotiating these purchases, developers were concerned about the high cost of the early TDCs ( $25,000 to $40,000 ) caused by short supply. Developers needing a large number of TDCs were particularly concerned that the TDC market was unstable.

To provide stability and consistency, the State Coastal Conservancy took a proactive role in creating and selling TDCs. The Coastal Conservancy is a division of the State Resources Agency authorized to protect coastal resources through a wide range of planning, acquisition and development techniques including the awarding of grants to governments and non-profit organizations.

The Coastal Conservancy is particularly interested in correcting problematic subdivisions through the implementation of restoration plans which guide the use of land acquisition funds. In the early 1980s, the Conservancy prepared and implemented a restoration program in the Malibu Coastal Zone. The Conservancy ensured a dependable supply of TDCs by creating and purchasing 213 TDCs using $2.6 million. This money was actually a revolving fund, with the proceeds of the TDC sales repaying the Conservancy. The 213 TDCs were purchased in four separate project areas: El Nido, Malibu Lake, Cold Creek and Las Flores Heights.

The El Nido subdivision was created in the 1920s with narrow winding roads and 347 lots on 70 acres of land. By 1980, only 40 lots were developed. Los Angeles County had inherited 153 lots due to property tax default and it was offering them for sale to the public whether or not they were buildable. Approximately 25 of the lots were in or near the bed of a creek that drains into a canyon which is now a public park. Through the Conservancy, the 153 lots owned by Los Angeles County and 30 other lots were permanently retired.

The Conservancy’s second restoration project was the Malibu Lake small lot subdivision, which is now surrounded on three sides by Malibu Creek State Park. This tract was created in the 1920s and 1930s to provide cabin sites adjacent to a private hunting camp. Within the Coastal Zone, only 16 of the 158 lots were developed in 1981. Many of the lots were not suited to septic systems and further development of these lots could threaten the quality of the water in Malibu Creek. The Conservancy purchased 125 lots here for $773,000.

The third Conservancy project was the Cold Creek Watershed, a 5,000-acre area containing exceptional wildlife habitat supported by one of the few perennial streams in the Santa Monica Mountains. The Coastal Commission originally required that TDCs used on receiving sites within the Cold Creek watershed had to come from sending sites within the Cold Creek watershed. The only small-lot subdivision within the Cold Creek project area is the Monte Nido subdivision, a 1926 tract with 416 lots on 40 acres. Although the lots average only 4,000 square feet, each lot relies on individual septic systems, including the lots immediately adjacent to the two blue-line streams that cross the subdivision.

However, the Monte Nido subdivision was considered by some to have too few potential sending sites to create an adequate supply of reasonably-priced TDCs. The TDCs from Monte Nido were priced much higher than the TDCs in other parts of the Malibu Coastal Zone. In addition, there were concerns that the owners of the potential sending sites could cooperate to drive up TDC prices even more or perhaps block a proposed development. One developer stated that this requirement was essentially a denial of his project, claiming that it would be difficult or impossible to buy enough TDCs from within the watershed to mitigate a proposed subdivision. In response, the Coastal Commission allowed a tract outside of the Cold Creek watershed, the Fernwood small lot subdivision, to serve as a reserve source of TDCs for receiving sites within the Cold Creek watershed. Fernwood is the largest of the small lot subdivisions, with 1497 lots, 1154 of which were undeveloped in 1979.

In addition, the Conservancy started a program allowing developers to pay fees in lieu of actually purchasing TDCs. The Conservancy would then use the funds generated by the fees to purchase TDCs. The Coastal Commission also reduced the formula for creating TDCs within the watershed to one TDC for two contiguous lots or five non-contiguous lots. And finally, the Mountains Restoration Trust, a non-profit satellite organization of the Conservancy was created to purchase TDCs at below market rates using creative techniques that are not always available to a governmental agency.

The Conservancy started the Mountains Restoration Trust with a $300,000 grant for the purchase of TDCs. Five percent of the in lieu fee was to be reimbursed to the Conservancy until the grant was fully repaid. However, the demand for Cold Creek TDCs declined. Instead of buying TDCs, the Trust found itself accepting TDCs as donations from homeowners wanting charitable-donation tax benefits in exchange for scenic easements. Typically, these donations were made by homeowners who owned five contiguous lots but only used two or three of these lots as a building site. By donating scenic easements on the two or three undeveloped lots, these property owners were able to continue to use these lots as private open space yet they received tax benefits as high as $150,000. Using this process, the Trust accepted easements from over 46 lots, representing 24 TDCs. Because these TDCs were acquired for little or no money, the Trust was able to sell TDCs for $15,000 to $18,000, a fraction of the price originally assumed.

The Trust to date has retired the development rights on 260 acres of land within the Cold Creek watershed, representing 22 TDCs. In addition, the Trust has collected in lieu fees equivalent to 39 additional TDCs but the fee money has not yet been used to record easements on sending sites.

The fourth Coastal Conservancy project is the Las Flores Heights Restoration Program. In 1918, the Las Flores Heights subdivision was created with 102 lots on 160 acres. The lots in Las Flores Heights range from one-half acre to an acre in size, but they tend to be steep and many are not served by a paved road. This area is particularly susceptible to natural disaster. In the 1930s, 20 homes existed in this subdivision; however, by 1982, all but six of the homes had been eliminated by fires and floods. The fires of 1993 have reduced that number even more. The Conservancy granted the Trust $886,000 to acquire a major interest in a landholding which included 60 percent of the Las Flores Heights subdivision plus a 160-acre site to the north of the tract.

As explained above, in addition to lots in small-lot subdivisions, sending sites could also be land within Significant Environmental Areas, or SEAs. Seven canyons in the Santa Monica Mountains were designated as SEAs. The majority of natural resource protection has been the result of the National Park Service acquisition of 21,000 acres to date for the Santa Monica Mountains National Recreation Area and the State of California’s acquisition of three large park sites totaling 38,000 acres.

However, 52 TDCs have been created using resource lands as sending sites. In most instances, the sale of these TDCs only partly compensated for the acquisition costs since large resource parcels are typically worth much more than their TDC value. This occurs because the Coastal Commission guidelines only allow one TDC to be generated per parcel up to 20 acres in size. Under these guidelines, a large building site might be worth $200,000 while the TDC that can be severed from that site is valued at about $20,000.

In "Transfer of Development in the Malibu Coastal Zone", Elizabeth Wiechec discusses significant changes in Malibu Coastal Zone TDC program resulting from three sources: the regulatory framework, the incorporation of the City of Malibu and shifting market forces.

As discussed above, the Coastal Commission regulates land use within the Coastal Zone until a Local Coastal Plan is certified. The ordinances needed to implement the Coastal Land Use Plan were never prepared by Los Angeles County and the Coastal Commission continues to regulate development in this Zone. The first component of a Local Coastal Plan, the Land Use Plan, was first submitted to the Coastal Commission in 1982 but rejected. In 1984, the Land Use Plan was adopted by the Coastal Commission based on suggested modifications offered by Los Angeles County.

The Land Use Plan was modified to reduce the ability to grant TDCs for the retirement of lots which were actually unbuildable due to geologic hazards, septic system limitations and flood hazards. In response, the Coastal Commission staff now refers to geologic and floodplain maps, and field checks where necessary, to ensure that TDCs are not granted to lots which are actually unbuildable.

In another modification, the Coastal Commission refined its maps of Environmentally Sensitive Habitat Areas (ESHAs) to protect only the riparian area flanking streams. As a result, many properties which were previously considered unbuildable became viable home sites with commensurate increases in value. This greatly decreased the likelihood that they would become TDC sending sites.

The second major change in the Malibu Coastal Zone TDC program is now underway as a result of the incorporation of the City of Malibu in 1991. The City, which represents about 20 percent of the land area of the Malibu Coastal Zone, has still not adopted a general plan. The area which is now the City of Malibu has been the primary location of the receiving sites under the Malibu Coastal Zone TDC program. Some Malibu residents are concerned that the City is accepting more development than would otherwise be the case due to having TDC receiving areas within the City limits. Malibu’s interim zoning ordinance does not focus future growth within the coastal terrace, the location of the receiving sites. The City has discussed a TDC program which would have both sending and receiving sites within the City limits. This concept of a self-contained TDC program within the City is at odds with the historical approach of treating the entire Malibu Coastal Zone as the appropriate area for a TDC program. If the City of Malibu ultimately proposes a plan which does not accept TDCs from outside the City, the Coastal Commission would be asked to accept a City of Malibu plan which would require fundamental changes in the larger Malibu Coastal Zone TDC program.

As a third element, Wiechec cites changes in the TDC program which resulted from political and market forces. From 1982 to 1986, developers were reluctant to buy TDCs because the Land Use Plan for the Malibu Coastal zone was still in flux. When the Land Use Plan was adopted in 1987 with the TDC concept intact, the program stabilized. At the same time, the Malibu real estate market was very active, with new building sites selling for as much as $1 million. The Trust and the Conservancy tried to keep the price of TDCs low to ensure an adequate supply in order to reduce developer discontent with having to buy TDCs to create a new lot. With TDC prices at about $20,000 each, most developers accepted the concept and treated the purchase of TDCs as simply a normal procedure of developing in Malibu.

Even though the voters approved cityhood for Malibu in June of 1990, incorporation did not occur until March of 1991. During this nine-month gap, developers scrambled to get subdivisions approved while Malibu was still in the County of Los Angeles. In the year prior to incorporation, approximately 150 TDCs were exchanged. During this period, one quarter of all the credits transferred since the beginning of the program were bought and sold.

It looked likely that the Trust would not be able to meet the demand for more TDCs in 1990, and developers complained to the Coastal Commission that the TDC requirement would become a de facto taking of their properties. In response, TDC prices were increased to $35,000 each and the Trust was able to buy all the easements needed to meet the rising demand for TDCs. This ability to meet the demand was critical to keeping the program in place since the subdivisions probably would have been approved without TDCs if TDCs had not been available for developers to buy.

The demand for TDCs ended abruptly in 1991. The moratorium imposed on new development stopped activity within the City of Malibu while the recession slowed growth in the rest of the Malibu Coastal Zone. Since 1991, only five TDC sales have occurred. Developers and the City of Malibu are now disputing whether or not three large subdivisions approved before 1991 can proceed. If these three subdivisions are allowed to proceed, 132 TDCs would be needed. Since the Trust does not currently have a supply of 132 credits, another period of intense activity could ensue.

To date, 505 density transfers have occurred under the Malibu program. As a result 924 substandard lots have been retired in antiquated subdivisions or roughly 20 percent of the undeveloped, substandard lots originally inventoried in the late 1970s. The 924 retired lots include roughly 800 acres of land that are now permanently preserved. In addition, the in lieu fee program has accepted the equivalent of 39 more TDCs, bringing the total to 544 transfers. This makes the Malibu program one of the most active TDR programs in the country. In fact, in terms of transfers per acre of land within the program boundaries, the Malibu program is second only to the Montgomery County program, with eight transfers per 1,000 acres.

In "Transfer of Development in the Malibu Coastal Zone", Elizabeth Wiechec identifies several important changes in the regulatory environment which affected the future of the Malibu Coastal Zone TDC program.

In the "Recommendations" section of "Transfer of Development in the Malibu Coastal Zone", Elizabeth Weichec offers four suggestions for the future of the TDC program: Place greater emphasis on resource and parkland protection; ensure an adequate supply of TDCs to mitigate large subdivisions; encourage private brokers to participate in the process; and make incremental refinements to the program rather than fundamental changes. To implement these suggestions, Wiechec calls for five program refinements: a mitigation bank, bankable TDCs, the completion of the Cold Creek Restoration Program, the abolition of transfer zones and an improved TDC registry.

In the mitigation bank concept proposed by Weichec, public agencies would deed restrict existing parkland and deposit the TDCs which result into a mitigation bank. When the mitigation bank sells these TDCs, the proceeds would be used to purchase additional land to be transferred to the agencies which originally deposited the TDCs. The concept responds to the need to create TDCs in advance of the demand created by large subdivisions. It also offers a source of capital at a time when the likelihood of raising public funding to seed TDC programs seems remote. The California Resources Agency, which oversees the State Department of Recreation as well as the Coastal Conservancy, the Santa Monica Mountains Conservancy and all other state conservancies, has already gone on record as supporting the use of existing parkland to create TDC reserves.

As a second option, Weichec suggests that developers be allowed to pay in lieu fees to the mitigation bank. Alternatively, developers could purchase land targeted by a public agency and present it to the mitigation bank as mitigation for a proposed subdivision. Finally, the Santa Monica Mountains Conservancy could institute a program allowing an acquisition to mitigate a proposed subdivision even if it does not meet the mitigation guidelines through a Condition of Special Circumstances process which recognizes that greater mitigation weight should be granted to the deed-restricting of critical parcels such as land at the headwaters of a watershed or lots which provide public access to a beach.

In Weichec’s second proposal, the Malibu Coastal Zone program would allow TDCs to be banked. At the start of the program, the Coastal Commission prohibited TDCs from being severed from sending sites until they could be simultaneously transferred to receiving sites. This requirement for simultaneity was considered necessary to prevent speculation. But it also means that an entity, such as the Coastal Conservancy or the Mountains Restoration Trust, has to have land in its control to use for TDC creation as the need arises. In the current era of reduced public funding of land acquisition, the supply of mitigation land is likely to decrease. In fact, current supplies are estimated to be capable of producing only ten TDCs. Consequently, Weichec sees a need for TDCs to become more like a commodity which can be bought, sold or held for later sale as market forces dictate. Weichec also suggests that private brokers be encouraged to participate since they have expertise in the real estate market. Finally, she proposes that the Malibu Coastal Zone process follow the model of the Montgomery County, Maryland, TDR program which allows the separate recordation of a TDR easement, deed of TDR and TDR Extinguishment.

As a third refinement, Weichec recommends that the Cold Creek Restoration Program be completed. As described above, the Coastal Conservancy initiated four restoration projects in the Santa Monica Mountains. Three of these programs has been closed: Malibu Lake, Las Flores Heights and El Nido. The goal in the fourth Conservancy project, Cold Creek, was to retire 100 building sites. So far, easements have been recorded on over 73 sites and in lieu fees have been collected which would be capable of retiring another 39 sites. However, the Trust has not as yet recorded easements which would deed-restrict these 39 sites. Consequently, the Coastal Commission has restricted further use of the in lieu fee program.

In a fourth change, Wiechec calls for abolition of the rule restricting receiving sites in the Cold Creek Project area to TDCs only from sending sites in the Cold Creek area. The demand for TDCs within the Cold Creek watershed has not materialized as expected and Weichec recommends that TDCs from any of the three zones in the Malibu Coastal Zone project be used interchangeably.

Finally, Weichec recommends that deed-restricted properties be recorded in a Geographic Information System (GIS) format to avoid the possibility of a sending site being deed-restricted more than once.

In conclusion, the Malibu Coastal Zone program has had all the right ingredients for a successful TDR program. The demand for new lots in Malibu is so great, and the economic benefits of subdividing land are so obvious, that developers have been willing to pay for the retirement of substandard lots as long as TDCs are available at a reasonable price. Even though the sending lot owners are not obligated to sell TDCs, the program has been flexible enough to respond to market forces to ensure that TDCs are always available to meet the demand. In addition, the program was assisted by the California Coastal Act and the California Coastal Commission, which ensured that new lots would only be allowed by transfers. And finally, this program was greatly helped by the Coastal Conservancy, which provided seed money for restoration programs and established the Mountains Restoration Trust, with a staff that had the ability to adapt and allow the program to survive through severe economic and political challenges.

Montgomery County, population 757,000, is a 323,000-acre county lying between the Potomac and the Patuxent rivers immediately northwest of Washington, D.C. The southern portion of the County contains the cities of Bethesda, Silver Spring, Wheaton, Rockville and various other suburbs within the greater Washington D.C. metropolitan area. But the northern portion of the County is a productive agricultural area.

Maryland was one of the first states to recognize the need to preserve farmland. In 1956, the state adopted a preferential tax which assessed agricultural land at its value as farmland rather than for its development potential. Nevertheless, throughout the 1960s, Montgomery County experienced a significant loss of farmland to development. In 1969, the County adopted a "Wedges and Corridors" land use plan which concentrates development along a spine through the center of the County; rural densities flank this corridor and protect the rivers which form the County’s north and south boundaries.

Five years after adoption of the "Wedges and Corridors Plan", the County changed the one- and two-acre residential zoning in the rural wedges to a Rural Zone density of one dwelling unit per five acres. However, farmland conversions continued despite the new restrictions and the County lost 18 percent of its agricultural land in the 1970s.

This led to the appointment of a task force to develop methods to stem the loss of agricultural land. The task force considered three options: purchase of agricultural rights, downzoning and transfer of development rights. The task force concluded that purchase of development rights would be too expensive. Downzoning alone might not be politically feasible and could have the unintended effect of satisfying the demand for exurban development using 25-acre estate lots. In addition, there was a concern that downzoning without some form of compensation could make it difficult for farmers to get loans due to reduced land values. Consequently, the task force recommended a combination of downzoning and TDR.

In 1980, the Montgomery County Council adopted a functional master plan entitled: "Preservation of Agriculture and Rural Open Space". The study area for this plan encompassed 163,000 acres in the northern half of the County farthest from Washington, D.C. The plan designated 26,000 acres as Rural Open Space where existing subdivisions had already precluded large-scale agriculture but where small farms and other rural uses could be maintained through the clustering of future development. In addition, the plan created an Agricultural Reserve containing 110,000 acres, more than one third of the land area of the County, where farmland and farming was to be preserved.

To implement the Plan, sectional map amendments rezoned 91,591 acres of land in the Agricultural Reserve from a density of one unit per five acres to a Rural Density Transfer Zone which allows on site development of one dwelling per 25 acres. The 25-acre minimum was based on an economic study showing that this was the minimum size for a farm in Montgomery County to function on a cash crop basis. In addition to the reduced density, the Rural Density Transfer (RDT) also promoted agricultural preservation through land use restrictions and the ability to cluster development on a small portion of a land parcel in order to keep the majority of the parcel intact for farming purposes.

While on-site development in the RDT zone was limited to one dwelling per 25 acres, the RDT zone allowed development rights to be transferred to designated receiving areas at the rate of one TDR for every five acres of land at the sending site. This constitutes a transfer ratio of five-to-one; in other words, the County’s plan allowed five times as much development if the development rights were transferred to a receiving site rather than used at the sending site.

Applying the ratio of one TDR per five acres of land to the 91,591 acres in the RDT zone yields a total of 18,319 TDRs theoretically available for transfer in this program. However, as of 1992, only 12,297 TDRs were actually in existence; over 6,000 theoretical TDRs are, in reality, not available for transfer due to existing development, public ownership of land and easements placed on land by other programs.

In 1980, the County created its first receiving area by adopting the Olney Master Plan. The master plan for this community differed from those which were to follow because transfers here operated within a closed system, with sending and receiving sites entirely within the Olney Master Plan Area. However, from 1981 through 1990, the County amended the master plans for eight other communities to create additional receiving areas capable of accepting TDRs from sending areas anywhere within the County. In 1990, the Olney Master Plan was also amended to merge with the County-wide TDR program.

In these nine, receiving-area communities, the County eventually adopted an array of zoning districts which feature baseline density limits for projects without TDR and higher density limits for projects with TDR. These rezonings created a theoretical capacity estimated, in 1992, to accommodate the transfer of 11,650 TDRs. In reality, the capacity of these receiving areas is actually lower than the theoretical capacity because not all receiving site developments use TDR or at least don’t use the maximum amount of TDR that the zoning code allows.

When the Rural Density Transfer Zone was adopted, some property owners sued the County claiming that they had suffered a loss in property value because receiving sites had not been designated prior to the downzoning. A circuit court judge ruled that the downzoning was valid on its own merits and was not a "taking" with or without the transfer mechanism. Furthermore, the judge stated that the availability of TDR would support the position that a taking had not occurred if a taking was at issue.

However, in 1987, the Maryland Court of Appeals ruled that the designation of TDR receiving sites should appear in the zoning code rather than just through the master plans adopted for the receiving site communities. In response, the County adopted a comprehensive zoning ordinance in 1987 which established TDR receiving zones in those communities with TDR receiving areas in their master plans.

On receiving sites, the zone code established two maximum densities: a lower base limit when transfers are not involved and a higher density to accommodate transfers from sending sites. In setting these two limits, the County wanted to ensure that the base limit was reasonable and that the bonus limit was high enough to justify the purchase of development rights but not so high that the additional development might overwhelm the infrastructure system.

To support the TDR program, Montgomery County’s capital improvements program ensures that sewer, water, transportation and other public services are extended into receiving areas rather than sending areas where they could subvert the goal of farmland preservation.

In addition, the County created a TDR fund as a last-resort buyer of development rights in the event that sending site owners are unable to sell their rights when they want. In establishing the TDR Fund, the farming community wanted a guaranteed market for TDRs but also wanted to ensure that the County would not hold a large percentage of transferred rights and therefore control the TDR market. To counter the possible impression of control, the County intentionally used the term "fund" rather than "bank" and provided that the fund would sunset after five years in operation. As explained below, the fund was never used and was finally eliminated in 1990.

The transfer process in Montgomery County can be summarized in six steps. 1) The sending site owner sells development rights, or development right options, to a receiving site developer or any other individual interested in owning the rights. 2) The developer files a preliminary subdivision plan for the receiving site according to the requirements detailed below. 3) After the preliminary subdivision plan is approved, the developer submits a site plan for the proposed development on the receiving site. 4) Following site plan approval, the developer submits a record plat to the County Planning Board along with two documents: a deed of transfer conveying ownership of the TDRs to the developer and an easement limiting development on the sending site and conveying the easement to the County as the Grantee. 5) After the deed of transfer and easement are recorded, the record plat is approved by the Planning Board and recorded in the land records. 6) Following recordation of the record plat, the transfer is completed by the recording of an extinguishment document which certifies that a TDR has been transferred to a specific property and is no longer available for transfer.

In the Montgomery County program, potential sending sites are lands zoned Rural Density Transfer (RDT). RDT land has an on-site density limit of one unit per 25 acres with the following two exceptions for lots that are at least 25 acres in size. First, tenant houses and mobile homes associated with farming activities are not included within the one-unit-per-25-acre density limit. Second, the density can exceed one dwelling unit per 25 acres to allow lots for the offspring of those who owned sending sites prior to the RDT zoning. However, regardless of whether the units were built before or after the RDT rezoning, a development right must be reserved for every permanent dwelling on the sending site. Reserved rights remain with the sending sites and cannot be transferred to receiving sites.

Lots smaller than 25 acres which were recorded prior to creation of the RDT zone are allowed to follow the development regulations of the prior zoning. However, a TDR must be reserved for each dwelling on a lot greater than 10 acres in size recorded prior to the creation of the RDT zone. After the construction of one home, further development on these pre-RDT lots must comply with RDT requirements.

When TDRs are transferred, an easement is recorded on the sending property identifying the limitations on the number of dwelling units that can be built on that site. When no dwellings exist on the sending site, the number of transferable TDRs can be as high as the total number of developments rights allowed by the zoning. Conversely, the County also allows TDRs to be severed from sending sites individually and at different times. However, once TDRs are transferred, they cannot be returned to the sending site; transferred TDRs are permanently removed from the sending site as described in the preservation easement.

To track the transfer process, each TDR is given a serial number. The serial number is assigned by the County Attorney’s Office as part of the process of approving the TDR easement document. This serial number appears on the record plat to specify exactly which TDRs are being used to increase density on the receiving site.

As explained in the Background section of this case study, Montgomery County has identified receiving areas in nine communities. At first the receiving areas were only designated by the master plans for these communities. However, since a comprehensive zoning code amendment adopted in 1987, all receiving sites are zoned for receipt of transferred development.

In these receiving areas, various zoning districts contain two separate density limits: a baseline limit sets the density maximum for projects in which developers chose not to use TDRs; a higher limit controls the density for projects which use TDRs. For example, the R-60/TDR Zone allows a density of as much as five units per gross acre as a baseline limit but up to seven units per gross acre for projects using TDR. However, the developer is not guaranteed to achieve the maximum density identified either by baseline zoning limits or with-TDR limits; the Planning Board can find that the actual density must be less than the maximum due to various site constraints and environmental limitations.

Other than through TDR, the only way a developer can exceed the base density of a receiving site is by providing moderately-priced dwelling units, or MPDUs. Montgomery County allows increases in master plan density designations to any project in which at least 12.5 percent of the total number of units are MPDUs. With MPDUs, the density on the receiving site can be increased an additional 20 percent beyond the density allowed under the TDR-only option.

In addition to maximum density, there is a minimum density increase that must be met for TDR to be used at a receiving site. This was imposed because the County was concerned that receiving sites would need to be too large if they had to accommodate all the sending site TDRs at reduced densities. Consequently, Montgomery County requires the density increase granted by transfers to be at least two-thirds of the maximum possible increase. For example, a 20-acre receiving site could be granted two extra dwelling units per acre, or a total of 40 extra units using TDR; the developer of that receiving site would have to propose a project that used at least two-thirds of that 40-unit maximum, or 27 extra units. However, the County Planning Board may waive this minimum transfer requirement for compatibility or environmental considerations.

The development standards and permitted uses applicable to a receiving site project are established based on the TDR density of the proposed project. For projects with TDR densities of six or more per acre, lot sizes and other development standards may be determined through the preliminary subdivision plan and site plan approval process in accordance with the County’s planned development code provisions. To use these provisions, the Planning Board must find that the creation of site-specific standards would result in a receiving site project which has fewer environmental effects or which would be more compatible with adjacent properties.

As mentioned above, Montgomery County requires site plan approval of receiving site projects prior to final plat approval. The site plan approval requirement was imposed to provide greater assurances that the transferred density would not overwhelm the receiving site or cause problems for adjacent properties. Since the number of TDRs needed for a receiving site project is not certain until the site plan is approved, TDRs in Montgomery County are typically secured under option contracts. If the site plan approval process determines that some or all of the optioned TDRs are not needed, these excess TDRs can be returned to the original seller.

Montgomery County uses speed of approval as an incentive to transfer. Since the transfer process does not involve rezonings, the processing time is comparable to that required for any land subdivision, with or without TDR. In addition, the County has priority categories for providing sewer and water service. If a development using TDRs passes the Adequate Public Facilities test and receives site plan approval from the Planning Board, it is automatically advanced to a higher priority category.

To facilitate the approval process, the County adopted ten administrative practices which clearly spell out the procedural requirements for transfers. For example, these Administrative Practices provide the Planning Board-approved forms that must be used for TDR easements, deeds of TDR transfer and TDR extinguishments.

The County has devoted considerable effort to promoting TDRs to both buyers and sellers. However, the cost of managing the program is reported to be minimal since the TDR approval process is incorporated within the subdivision review and approval process.

The County also established a County Development Rights Fund in 1982. One purpose of the Fund was to provide loan guarantees to farmers who wanted to use the value of TDRs as collateral on farm loans. However, the Fund was primarily intended to buy TDRs if interested sellers could not find buyers in the private market. The Fund was designed to bank any TDRs it acquired and resell them at auction to the highest bidder. Without assistance from the Fund, sending site owners were able to find developers willing to buy their TDRs at prices established through private market transactions. Consequently, after going unused for eight years, the Development Rights Fund was terminated.

Montgomery County has all of the key factors needed for a successful TDR program. The program was based on a comprehensive land use plan supported by economic analysis. While sending site owners are allowed to build on site at a density of one unit per 25 acres, the ability to sell TDRs at the rate of one TDR per five acres provides enough incentive for these sellers to create an adequate supply of TDRs for sale.

Similarly, the developers of receiving sites find that it is more profitable to buy TDRs than acquire the additional land they would need to build the same number of units. Montgomery County has also been careful to make TDR the only means, with the exception of moderately-priced housing, of exceeding the base zoning of a receiving site. Furthermore, there is significant demand for additional housing in Montgomery County since even the northernmost agricultural areas are only 25 miles from Washington, D.C. This demand propels the TDR process, leading the County to create additional receiving areas and ensure that these are served by infrastructure and public service systems.

In addition, the County has encouraged land owners and developers to use TDR by keeping the program straightforward, predictable and easy to use. Even though it involves over 100,000 acres of land, the County’s TDR concept is simple enough to be easily understood by the general public. The County also minimizes confusion by providing administrative guidelines and forms for the necessary legal documents. Finally, TDR projects use the same processing steps required of non-TDR projects, avoiding the disincentives of uncertainty and long approval times.

On the negative side, some have observed that the approval process can still take up to two years despite the attempts to make the process as easy and fast as possible. Other critics point out that the sending area densities were established in a blanket fashion rather than in recognition of differences in land value, thereby creating inequities in compensation. And finally, it should be noted that the incorporated municipalities have not participated in the program resulting in receiving area densities that are lower than would likely be the case if transfers were made to cities.

Despite these criticisms, Montgomery County is often regarded as having the most successful TDR program in the nation. As of 1992, a Montgomery County study reported that 3,688 TDRs had been severed from over 200 sending sites resulting in the placement of agricultural easements on more than 23,000 acres of land. Of the 3,688 TDRs severed, 3,185 had been transferred to receiving sites. By 1994, the Lincoln Land Institute reported that Montgomery County had saved 29,000 acres through TDR. That represents almost one third of the 92,000 acres rezoned as RDT in response to the County’s 1980 master plan. As reported by John Bredin in the November 1998 Planning Advisory Service Memo, the County at that time had saved over 38,000 acres using TDR.

As stated in the background section of this case study, as of 1992, there were 12,297 TDRs in Montgomery County. ( The number of TDRs decreases over time due to ongoing development by land owners who choose not to participate in the TDR program, by land purchases by public agencies and by easements placed through other land conservation programs. ) Subtracting the 3,688 severed TDRs from the 12,297 TDRs in the County results in a total of 8,609 TDRs which have not yet been severed or transferred.

In a 1992 status report, the County estimated that the nine communities rezoned to receive TDRs could theoretically accommodate 11,650 TDRs. At that time, TDR-related and non-TDR-related development in these receiving areas totaled 7,808 units leaving a remaining capacity for only 3,842 TDRs. This shortfall is compounded by various factors which make it difficult to actually achieve the theoretical capacity of the receiving sites. For example, capacity reductions occur when development occurs on receiving sites without TDRs or without the maximum possible number of TDRs allowed by the zoning.

Nevertheless, Montgomery County has consistently demonstrated its commitment to providing enough receiving area capacity to accommodate the transfer of all TDRs from the sending areas. As discussed above, the County amended the master plans of nine communities during the 1980s, greatly expanding the program’s receiving area capacity. It is anticipated that the County will continue to review receiving area potential in future community master plans and consider the possibility of creating higher-density, multiple-family residential zones as receiving areas.

Of the 250 acres in the City, 150 acres remain undeveloped and could accommodate roughly 25 homes if Morgan Hill allowed development in this area. However, Morgan Hill effectively prohibits development on slopes over 20 percent. Owners of property with a slope greater than 20 percent can cluster development in portions of their property with less steep grades. However, if these owners still cannot achieve the density allowed by zoning, they must transfer their development credits in order to maximize the economic potential of their property.

The development potential of sending sites is established either by the provisions of the Hillside Combining District or the underlying zoning, whichever allows less development. The amount of development allowed on the potential sending sites is calculated using slope-density regulations; the greater the slope, the more lot area is needed to allow one dwelling. An environmental study must be performed to determine whether any portion of a proposed sending site is unbuildable due to environmental constraints; if so, the development rights available for transfer must be reduced accordingly. Once the City has agreed on the number of units which could be built on site, the number of units available for transfer is calculated at twice that amount. That represents a 2:1 transfer ratio.

Prior to transfer, either fee title or dedication of an open space easement must be transmitted to the City. The easement prohibits cultivation as well as all residential, commercial or industrial uses. In the early 1990s, TDCs typically sold for $25,000 to $40,000 each when the purchase price was negotiated between buyers and sellers.

Eligible receiving sites must be at least one acre in size and have a slope of ten percent or less. A TDC transaction cannot increase the density of a receiving site more than ten percent greater than the density allowed under base zoning. The planning commission must approve a detailed site plan for the receiving site and the transfer itself must be approved by both the planning commission and the city council. Once approved, a record of the transfer must be recorded as well as the transfer of fee title or dedication of an open space easement.

As described above, one incentive to purchase TDCs is to achieve up to a ten percent increase in density on a receiving site. As an additional incentive, Morgan Hill recognizes the use of TDCs in its Residential Development Control System (RDCS) process. Under RDCS, a limited number of residential building permits are issued each year based on the CityÕs population goals. Typically, 250 allocations are issued each year. Developers must compete for these limited permits by gaining points for providing schools, parks, affordable housing and other benefits including open space. Developers can maximize the number of points available in the open space category of RDCS by incorporating TDCs in their proposed projects.

In addition to the straightforward TDC approach described above, Morgan Hill uses two other programs involving transfers. One alternative program was developed when Morgan Hill had limited sewer capacity. A sewer allocation is needed to obtain a permit to build a new dwelling unit. To encourage hillside preservation, a certain number of sewer allocations were set aside to be used with TDCs transferred from El Toro Mountain. Under this option, a developer was encouraged to acquire a TDC as a way of obtaining a sewer allocation. However, there no longer is an incentive to use this option since a new sewage treatment plant was built in 1995 and sewer allocations are now plentiful.

In a second permutation, Morgan Hill itself purchased a 43-acre property on El Toro Mountain and, as a result, obtained control over 17 TDCs. Morgan Hill has made projects which use these 17 TDCs completely exempt from competition in the CityÕs Residential Development Control System (RDCS). The City has set the price for these TDCs at $75,000 each. In 1991, the City considered reducing the price to $50,000 or $60,000 per TDC in response to market conditions; but, ultimately, Morgan Hill decided to maintain the original price. The City intends to use revenues from the sale of these TDCs to purchase other open space land.

PROGRAM STATUS

Morgan Hill is achieving its primary goal of preserving the top of El Toro Mountain simply by effectively prohibiting development in this area. In addition, the City is experiencing a relatively high rate of transfer activity. In the traditional TDC program, 46 TDCs had been transferred as of 1991. These transfers permanently preserved 92.5 acres on El Toro Mountain and 46 acres in other areas. As described above, the City also obtained 17 TDCs by purchasing a 43-acre property on El Toro Mountain. Finally, a property owner deed-restricted a 30-acre hillside property in 1995 and will be selling the TDCs in the private market. Consequently, the City has preserved a total of 211.5 acres of open space. In addition, another 28 acres of steep land have been permanently preserved via clustering of development at the lower elevations of single land parcels.

Despite the price tag of $75,000 each, developers have also purchased four of the City-owned TDCs in order to exempt their developments from having to compete in the RDCS permit-allocation process. However, even when sewer allocations were scarce, no one took advantage of the option in which TDCs could be purchased to obtain sewer allocations.

Terry Linder, Associate Planner, reports that the pace of TDC acquisitions has slowed during the early 1990s. Every year, all 250 building allocations are issued. However, multi-home projects are not required to buy TDCs until several homes in the project are built. Since the demand for new homes has declined, it takes longer to reach the threshold at which the TDCs must be purchased. Nevertheless, the land preservation activity has provided an adequate supply of TDCs. As mentioned above, the TDCs from a newly-covenanted, 30-acre parcel are available for purchase when the developers are required to buy them.

The Morgan Hill program is a success for many reasons. The effective prohibition of development on steep sending sites strongly encourages the owners of these properties to sell their development credits. The City has also created a strong incentive for receiving site owners to buy development credits by giving TDCs a point value in the competitive process used to allocate a limited number of residential building permits each year. In addition, the City supports its program with information for affected property owners and regular status reports on the TDC program. And finally, the City monitors its program and makes adjustments when needed. For example, Morgan Hill realized that the price which receiving site owners could afford to pay for a TDC was less than the price which sending site owners wanted. As a result, the City made a mid-course correction and created the two-to-one transfer ratio.

In addition, the Pinelands account for about one quarter of New Jersey’s agricultural income with specialization in cranberries and blueberries. It also contains one of the largest and least polluted aquifers in the northeastern United States and provides numerous recreational opportunities, particularly for residents in New York City and Philadelphia, which are within a one- to three-hour drive from the Pinelands.

During the 1970s, the Pinelands experienced increased growth due to the development of casinos in nearby Atlantic City and due to the general spread of vacation and retirement homes. In 1978, the U.S. Congress designated the Pinelands as the country’s first National Reserve; the federal legislation also authorized the creation of a regional planning agency and charged it to adopt a reserve plan within 18 months.

In response, the governor of New Jersey established the Pinelands Commission, a regional agency which incorporates seven counties and 53 local jurisdictions. The 15-member Commission consists of seven representatives appointed by the seven Pineland counties, seven members appointed by the Governor of New Jersey and one member designated by the U.S. Secretary of the Interior.

In 1979, the New Jersey state legislature passed the Pinelands Protection Act, designed to protect the environment, safeguard water quality, promote appropriate agricultural/recreational uses and encourage compatible development within the Pinelands. This Act endorsed the Pinelands Commission and the preparation of the Pinelands Comprehensive Plan.

In 1980, the Pinelands Commission adopted the Pinelands Comprehensive Management Plan. This Plan includes a massive land use analysis which divides the planning area into two parts. The inner Preservation Area consists of approximately 368,000 acres of land which is particularly environmentally sensitive. The peripheral Protection Area includes about 566,000 acres of land which had already experienced some development at the time the Plan was being prepared. The Plan further divides the planning area into nine management areas.

- Preservation Area District: Uses include cranberry/blueberry agriculture, forestry, recreation and fish/wildlife management.

- Forest Areas: Uses include low-density development, agriculture, forestry and recreation.

- Agricultural Production Areas: Restricted to agriculture and agriculture-related uses.

- Special Agricultural Production Areas: Limited to cranberry and blueberry farming.

- Rural Development Areas: Semi-developed areas allowed additional development limited to 200 units per square mile.

- Regional Growth Areas: Lands adjacent to developed areas which can be zoned to achieve assigned average growth densities.

- Pinelands Towns: Traditional communities outside regional growth areas.

- Military and federal Installation Areas: Uses as needed by the federal government.

- Pinelands Villages: Communities with cultural or historic ties to the Pinelands which can accommodate compatible development.

The Plan calls for public acquisition of 100,000 acres using $23 million from the National Parks and Recreation Act supplemented by funds from the federal Land and Water Conservation Fund and New Jersey’s Green Acres Program. However, the Plan’s preservation goals are largely implemented through land use regulations.

Within those management areas identified for at least some development, such as Pinelands Towns, Villages and Regional Growth Areas, a wide range of activities is allowed. But development is closely controlled in the Preservation Area District, Agricultural Production Area and Special Agricultural Production Area. In addition, residential development is not allowed as a matter of right in these three areas but, rather, must be approved by the local jurisdiction through a conditional use permit.

To provide some compensation to the owners of property in the Preservation Area District, Agricultural Production Area and Special Agricultural Production Area, the Plan encourages these owners to preserve their land through conservation easements. Once these easements are in place, development rights, known as Pinelands Development Credits (PDCs), are severed and can be sold. These PDCs are purchased by developers of land in the Regional Growth Areas in order to increase the density above the limits allowed as a matter of right by the zoning. PDCs cannot be transferred from or to land in the other five management districts: Forest Areas, Rural Development Areas, Villages, Towns and Military and Federal Installations.

The New Jersey state legislature required all local jurisdictions within the planning area to amend their land use plans and zoning to implement the Comprehensive Plan. These amendments were to be completed within one year. However, several communities were unable to meet this timetable and the deadlines were extended. As of the end of 1994, 51 of the 53 municipalities and all seven counties in the Pinelands had brought their plans and codes into conformance with the Pinelands Comprehensive Plan.

The Pinelands Comprehensive Management Plan (CMP) created the Pinelands Development Credit Program, which encourages transfers from sending sites in preservation areas to receiving sites in Regional Growth Areas.

In the Pinelands TDR program, sending sites are parcels within the Preservation Area District, Agricultural Production Area and Special Agricultural Production Area. To implement the Comprehensive Plan, municipalities had to establish land use restrictions capable of promoting preservation in these three areas. Additionally, these jurisdictions were required to have clustering provisions designed to maximize the amount of land left in open space. Finally, in regulated areas, residential development is only allowed by conditional use permit rather than as a matter of right.

The Plan allows the owners of land in the sending areas to build on site, by conditional use permit, at low density. But to encourage these owners to transfer development rights rather than build on site, the Plan allows four dwelling units to be built in growth areas for every development credit transferred from a preservation area. In other words, the Plan offers four development rights at the receiving site for every Pinelands Development Credit (PDC) transferred from a sending site. Since 5,625 PDCs are assigned to the preservation areas, a complete transfer of these credits would result in 22,500 additional homes in the Regional Growth Areas.

Development potential and environmental sensitivity determines the number of PDCs allocated to a sending site. In the Preservation Area District, one PDC per 39 acres of land is granted to uplands; 0.2 PDCs per 39 acres are allocated to wetlands; two PDCs per 39 acres are allocated to land approved for mining but not yet disturbed; and no credits are allocated to land mined as a result of a resource extraction permit. In the Agricultural Production Areas and Special Agricultural Production Areas, two credits per 39 acres are allocated for uplands, lands in active berry agriculture, wetlands in active field agriculture as of 1979 and uplands approved for mining but not yet disturbed; 0.2 PDCs per 39 acres are allocated for other wetlands; and no credits are allocated to uplands mined as a result of a resource extraction permit.

A credit can also be made to land which meets the above criteria which was partially developed as of 1981 as long as the unused portion of the property is at least ten acres in size. The credits available to land in the Agricultural Production Area are reduced by the number of dwelling units located on the sending site. In addition, one quarter PDC can be allocated to someone who has owned a vacant parcel at least one tenth of an acre in size since 1979 which does not adjoin another parcel owned by the same person as of 1979. Owners can also receive fractional PDCs according to the formulas described above. The resulting fractions are always rounded to the nearest quarter of a credit since each quarter credit can be used to build an additional home in a Regional Growth Area.

To receive a PDC allocation, a property owner must apply to the Pinelands Commission for a Letter of Interpretation. The allocations have value because they represent the development potential of the property and should be included in appraisals of the property. However, Letters of Interpretation do not mean that the property owners commit to deed restrict their property or sever the PDCs from the land; property owners may decide to keep the PDCs with the land rather than sever and sell them.

To actually sever the PDC from the sending site, the owners must have a 60-year title search performed on their property. The title search is critical because the owner must have clear title to the property in order to be able to place an easement on the property. If even the mineral rights are owned by someone else, the property owner would not be able to deed restrict the property for PDCs unless he or she regained control of those mineral rights.

If the title search indicates that the title is marketable, the owners can deed restrict their land with an easement which meets the requirements of the PDC Bank. The restriction must limit future uses of the land in accordance with the Pinelands Comprehensive Management Plan. In addition, the deed restriction must be granted in favor of a public agency or a non-profit, incorporated conservation organization. Finally, the restriction must be enforceable by the Pinelands Commission. An attorney is not an absolute necessity if the landowner chooses to use one of the three sample deed restrictions provided by the PDC Bank.

Landowners are encouraged to submit draft deed restrictions along with applications for PDC Certificates; that way the PDC Bank can assist in resolving potential problems before the deed restriction is actually executed and recorded. Landowners receive PDC Certificates from the PDC Bank after the Bank verifies the accuracy of the PDC allocation and ensures that the land has been properly deed restricted. If a Burlington County property owner wishes to sell PDCs to the Burlington County PDC Exchange, application for a PDC Certificate must be made to the Exchange since the deed restriction must be made in favor of Burlington County; the Exchange takes care of obtaining the PDC Certificate from the PDC Bank for the property owner as well as other procedures such as making arrangements for the title search and filing the deed restriction.

Sending site owners have numerous options for marketing their PDCs:

- List PDCs with a real estate salesperson;

- Obtain PDC Certificates and, consequently, get listed in the PDC Registry;

- Locate PDC buyers from the list kept by the PDC Bank;

- Sell the credits to the PDC Bank or, in the case of Burlington County landowners, to the Burlington County Exchange;

- Advertise the PDCs for sale; or

- Sell the PDCs along with the property.

Each Certificate records the PDC owner, the number of credits and the land from which the PDCs were severed. When PDC owners sell their PDCs, the transaction is recorded on the Certificate and the PDC Bank issues a new PDC Certificate in the name of the new owners. PDC Certificates can be encumbered as collateral for a loan. The PDC Bank records all transactions in its PDC Registry. PDC Certificates are not needed for PDC sales which occurred prior to the establishment of the PDC Bank in 1988; however, if pre-1988 PDCs are bought and sold, these transactions must be reported to the PDC Bank.

After PDCs are severed, the property owners continue to hold title to the land and may use it for prescribed purposes as listed in the deed restriction. In the Preservation Area District, the land may be used for berry production, native plant horticulture, beekeeping, fish and wildlife management, passive recreation and housing for migrant farm workers. In the Special Agricultural Production Area, the deed restrictions can allow berry production, horticulture of native plants, forestry, beekeeping, fish and wildlife management and migrant farm worker housing. And in Agricultural Production Areas, the easements can permit agriculture, migrant farm worker housing, forestry, passive recreation, smaller agricultural processing and sales establishments, fish and wildlife management and, under limited circumstances, agriculture-related airports and heliports.

If the PDC allocation is adjusted accordingly, the right to build other farm-related housing can also be retained. For example, if sending site owners wish to reserve the right to build agricultural-related dwelling units on the sending property in the future, they can subdivide the property and deed restrict only the resulting parcel slated for preservation. Alternatively, the right to build on the site in the future can be noted on the Letter of Interpretation and the available PDCs adjusted accordingly.

PDC Banks

A TDR bank was originally approved by the New Jersey legislature but vetoed by the governor. However, in 1981, the Burlington County Conservation Easement and Pinelands Development Credit Exchange was established by Burlington County, one of the seven counties within the Pinelands. The Exchange was funded by the issuance of a $1.5-million county bond. The Exchange is a buyer of last resort for PDCs severed from land in Burlington County; however, PDCs purchased by the Exchange can be sold for use on receiving sites anywhere in the Pinelands.

The Exchange is allowed to buy PDCs from property with environmental resources, such as agricultural land, wetlands or property contiguous to property already in public ownership. The program also requires that the seller demonstrate financial hardship; however, this requirement can be waived at the seller’s request.

The Exchange buys and sells PDCs at $10,000 each plus costs; the price was based on the estimated value to a receiving site project of one additional dwelling unit. The Exchange’s purchase price had the effect of establishing the price of PDCs in private transactions; for example, Roddewig and Inghram reported in 1987 that although PDC prices ranged from $8,000 to $20,000 in the early 1980s, most PDCs sold for $10,000. During the early years of the Pinelands program, the Exchange also found itself marketing PDCs since New Jersey real estate brokers did not see much opportunity in this market.

In 1982, the legality of the Exchange was challenged. At issue was whether or not the Burlington County voters, in approving the bond measure, had authorized the County to purchase PDCs as well as easements. In addition, there were arguments about whether the PDCs were securities, and, consequently, regulated by federal securities law. The courts upheld the legality of the Exchange. From 1981 to 1987, the Exchange purchased 91.75 PDCs, which represents a preservation of 2,400 acres of land. The Exchange has now sold all of the PDCs it acquired.

In 1987, the State of New Jersey established the New Jersey Pinelands Development Credit Bank and capitalized it with $5 million from the state general fund. The Bank acts as a "buyer of last resort", ensuring that there will always be a market for PDCs should a PDC seller be unable or unwilling to find a buyer. The Bank must pay at least $10,000 per PDC. The Bank may periodically increase its purchase price. However, the Bank’s purchase price may not impair private transactions of PDCs; in fact, the state legislation prohibits the Bank from buying PDCs for a price greater than 80 percent of market value. The Bank must be reauthorized to purchase PDCs every two years. In 1995, the most recent extension, New Jersey reauthorized the PDC Bank to purchase PDCs until December of 1997.

The Bank can purchase PDCs if it would further the objectives of the Pinelands Protection Act and the Pinelands Comprehensive Management Plan. To assist in understanding that goal, the Bank developed five specific examples:

- When purchase of the PDCs would deed restrict a property of ecological or agricultural significance.

- When the property abuts or protects public conservation land.

- When the PDCs will be used on a residential project which is important because it includes environmentally-sensitive design and/or affordable housing.

- When the purchase would result in a positive example of the Pinelands program.

- When the landowner intends to use the proceeds from the PDC sale for activities that further promote the goals of the Pinelands Plan, such as a nature center or wildlife refuge.

The Bank can also buy PDCs to alleviate a hardship, for which the Bank has three examples:

- When an owner’s land investment represents a substantial portion of the owner’s net worth.

- When the owner has applied for and been denied a waiver from the development restrictions of the Pinelands Plan.

- When an owner is experiencing an extraordinary financial hardship such as unemployment or illness.

The Bank can sell the PDCs that it owns only if there is sufficient demand for PDCs to warrant a sale and only if the sale would not substantially impair the private sale of PDCs. The Bank sells PDCs through auctions. The minimum bid must be $2,500 per right ( or $10,000 per PDC ); however, the Bank can set a higher minimum bid in order to avoid a substantial impairment of private PDC sales. In fact, during the Bank’s first sale of PDCs in 1990, the high bid was $5,560 per development right. In addition, the State of New Jersey is considering legislation which would increase the minimum bid from $2,500 to $3,150 per development right.

Following a two-thirds vote of the Bank Board, the Bank can also convey PDCs at no cost to projects which serve a compelling public purpose. In approving such no-cost conveyances, the Bank Board must find that the project could not proceed without the conveyance and that the conveyance will not substantially impair private-market sales of PDCs.

Most transactions occur in the private market where sales prices are determined by negotiation between buyers and sellers. For example, in 1993 and 1994, the PDC Bank purchased only one development right while 156 development rights were purchased in private sector transactions. Similarly, the Bank sells relatively few development rights; from 1990 through 1994, the Bank sold only five development rights, compared with 328 development rights sold by private parties to private parties. Private-transaction sales prices are influenced both by general supply and demand for development rights and by the additional profit which a receiving site developer is able to obtain by purchasing development rights.

In addition to buying and selling development rights and providing credit guarantees, the Pinelands Development Credit Bank:

- Guarantees loans secured by PDCs as collateral for at least $2,500 per development right;

- Facilitates all PDC transactions;

- Issues PDC Certificates;

- Reissues PDC Certificates when ownership changes;

- Maintains the Registry of all PDC transactions;

- Uses the Registry to help PDC buyers find PDC sellers;

- Maintains a list of developers who want to buy PDCs; and

- Prepares an annual report of all PDC transactions.

Receiving sites are lands in the Regional Growth Area subcategory of the Protection Area. Land in Regional Growth Areas is capable of accommodating additional development and is recognized as having a high demand for development. Land designated as Regional Growth Area is located in 23 Pineland municipalities. To ensure that there would be enough land to receive transferred credits, the Plan designated receiving areas capable of accommodating up to 46,200 transferred units; this is more than double the number of units, 22,500 units, which would be generated by the severing of all credits allocated to the sending areas.

PDCs can be used to increase the density of receiving site projects. The extra density allowed by PDCs varies between the 23 communities involved; the zoning code for each municipality spells out the bonus density available by transferring development rights. However, in each community, the bonus density is awarded as a matter of right, not as a result of a discretionary approval process. PDCs can be used for any type of single-family or multiple-family residential development.

Some of the 23 local municipalities with receiving sites were accustomed to granting extra density in response to developer applications for planned unit developments or other rezonings. The Pinelands Commission required these communities to discontinue this practice since developers would have little incentive to buy PDCs when they could get the density they want for free. Similarly, the Pinelands Plan requires the use of PDC whenever a municipality approves a zoning variance which increases residential densities or allows residential uses in areas zoned for non-residential uses. In addition, the Pinelands Commission watches for stringent development standards for higher density development which could discourage developers from buying development rights.

Most applications for subdivisions and site plan approvals are submitted first to the Pinelands Commission. The Commission certifies the number of PDCs required for the proposed project, as well as compliance with other Pinelands regulations, in a Certificate of Filing. The application then goes to the applicable municipality for review and approval. The project can receive preliminary approval conditioned on delivery of the necessary PDCs prior to final approval. For multi-phase projects, the approval can specify the number of PDCs to be provided prior to proceeding to the next phase.

Prior to final local approval of a project, developers must redeem the PDCs. Developers redeem PDCs by exchanging them for the right to build additional dwelling units on the receiving site. The municipality sends the redeemed PDC Certificates to the PDC Bank, which records these PDCs in the Registry as retired. The developer also submits proof of local project approval and PDC redemption to the Pinelands Commission. The Commission must review the project approval and verify redemption of the PDCs prior to issuing a letter concurring with the local government approval.

The Pinelands program is supported by a substantial public outreach effort. The Pinelands Commission has prepared a color brochure describing the Comprehensive Management Plan. The New Jersey Pinelands Development Credit Bank distributes guidelines, entitled Selling and Buying Pinelands Development Credits, which outline the forms and procedures used in the transfer process. The Bank has also prepared a handbook, entitled "Benefits of the Pinelands Development Credit Program", which explains why landowners and developers should take advantage of the program. In addition, the Bank regularly sends letters to landowners reminding them of the benefits of the program.

In the first two years of the Pinelands program, severances rose from 686 acres in 1982 to 1,021 acres in 1983. But for the next five years, the acreage of protected land each year steadily declined to a low of less than one acre protected in 1988. Similarly, the use of development rights on receiving sites had a dramatic start, with 638 development rights transferred to receiving sites in 1985 and 1986. This was followed by declining use of transfers on receiving sites between 1986 and 1989.

Fortunately, the Pinelands program has been routinely analyzed and adjusted. In 1983 and 1984, Peter J. Pizor conducted interviews with landowners, facilitators and developers affected by the Pinelands program; the results were reported in a Spring 1986 Journal of the American Planning Association article entitled "Making TDR Work". Pizor concluded that the Pinelands program expanded the options for landowners by allowing them to continue farming while selling their development rights, sometimes using the proceeds to expand the land area of their farms. Prior to the establishment of the Pinelands Development Credit Bank, there was relatively little formal facilitation; consequently, Pizor found that developers were reluctant to use the new program. Finally, Pizor reported that, in the early 1980s, the Pinelands program was hampered by three disincentives: the transferred density could not be used on land served only by septic systems; transfers were resisted by communities with strong no-growth sentiments; and transactions were delayed by overlapping regulations and disputes between local governments and the Pinelands Commission.

In 1987, the Pinelands Commission hired a real estate consultant to interview property owners, developers and public officials about the program. The consultant recommended that the Commission increase its public outreach effort after discovering that few of those interviewed were familiar with the details or even the goals of the program. The consultant also reported that the Pinelands Program was hindered by opposition to increased density in the growth centers. The local governments had the ability to approve or deny receiving site projects using PDCs. These proposals were sometimes denied or at least discouraged by local zoning codes which imposed height, setback and other development requirements which effectively made higher-density projects impossible.

In addition, the consultant found that environmental constraints within the growth areas often preclude the use of PDCs. As reported by Pizor, the absence of sewers in many of the growth areas prohibited higher density development. Finally, land owners and developers who had not used PDCs believed that the program was so complex and time-consuming that they would rather build at a lower density than go through the process. However, the consultant found that those who used PDCs were typically interested in using them again.

In 1988, thirty four potential changes in the Pinelands program were recommended. Some minor adjustments were made immediately, including improved marketing, increased public education and streamlining of the approval process. In 1990, the Commission followed up with comprehensive program amendments which improved the calculation procedure, simplified requirements and adjusted density limits in specific areas to account for special circumstances.

Most importantly, in 1988, the Pinelands Development Credit Bank was established and began a marketing program that created an increased level of activity. Between January 1, 1989 and June 30, 1991, 240 allocations occurred; this was more than 60 percent of the total number of allocations that had occurred to that date.

The Pinelands TDR program was also greatly assisted by the adoption of the Pinelands Infrastructure Trust Bond Act. This legislation has helped to fund about $50 million worth of sewer improvements in Regional Growth Areas, thereby making it possible for developers to use development rights to increase the density of receiving site projects.

In the 1990s, the Pinelands program continues to be analyzed and improved. In 1994, the Pinelands Commission adopted new rules to the Comprehensive Management Plan designed to provide flexibility in municipal growth management, streamline the development review process and change regulations for mining in the Pinelands. The Commission had previously allowed single-family residential development to be reviewed by a local review officer in two municipalities; based on that experience, the Commission hopes to expand local review to other jurisdictions. In addition, the Commission increasingly enters into memoranda of agreement which identify categories of minor projects which can be approved locally rather than being delayed by Commission review.

Due to the comprehensive nature of the Pinelands Plan and the willingness of the State of New Jersey and the Pinelands Commission to make necessary adjustments, the Pinelands has all of the ingredients needed for a successful program. First, the transfer program was imposed on every municipality in the one-million-acre planning area and the Comprehensive Plan was carefully designed to be implemented by TDR. On sending sites, the four-to-one transfer ratio provides a substantial motivation for property owners to sell development rights rather than build on site. And on the other end of the transfer, the Plan designates growth centers that are capable of accommodating the transferred development. Furthermore, the Pinelands Commission has prevented local governments from increasing density, through rezonings or planned unit developments, unless PDCs are used. Finally, as mentioned above, the program is supported by a public outreach program and assistance from the Pinelands Development Credit Bank.

Because of these features, the New Jersey Pinelands has one of the most successful TDR programs in the country. By the end of 1994, the Pinelands Commission had issued 738 letters of interpretation representing allocations for 4,126 development rights. Of course, only a portion of the property owners who received allocations chose to sever their development rights. Between the start of the program in 1981 and November 2, 1995, 364 PDCs, or 1,456 development rights were severed from sending sites.

Of these severed credits, 171 PDCs, or 684 development rights, were sold to receiving site developers. The remaining 193 severed PDCs, (or 772 development rights), which have not been purchased by developers are owned by either the PDC Bank (77.25 PDCs or 309 development rights) or are privately owned (115.75 PDCs or 463 development rights). As of December 1994, 275 receiving site development projects using PDCs had either been built, approved, or were pending local approval. If all of these projects are ultimately built, 522.5 PDCs or 2,090 development rights would be used.

As a result of these transactions, a total of 12,834.23 acres had been restricted from inappropriate development as of the mid-1990s. Of this total, 8,016.12 acres were in Preservation Areas, 4,050.39 acres in Agricultural Production Areas, 766.18 acres in Special Agricultural Production Areas and 1.54 acres in Regional Growth areas. As of the end of 1997, 15,800 acres had been permanently preserved. In terms of total acreage preserved, the New Jersey Pinelands program is exceeded only by the agricultural preservation program in Montgomery County, Maryland.

BACKGROUND

San Luis Obispo County, population 217,000, lies midway between San Francisco and Los Angeles on California’s Pacific Coast. There are two TDR programs in San Luis Obispo County at this time; a community-based program developed for the community of Cambria in the 1980s and a countywide program adopted in 1996.

Cambria, with a permanent population of 5,000, is a seaside community in the northern portion of the County. Cambria’s coastal hills provide one of the few habitats for Monterey Pine and Cambria Pine. Thanks to its natural setting, Cambria has an active real estate market, particularly for vacation and retirement homes. In the late 1800s, prior to the adoption of modern development standards, 9,000 very small lots were created in the Lodge Hill subdivision of Cambria, often on steep and highly erodible slopes. Many of these lots remain undeveloped.

The Cambria transfer of development credits (TDC) program grew out of a collaboration of the California Coastal Commission, the California Coastal Conservancy, San Luis Obispo County and the Land Conservancy of San Luis Obispo County. These organizations were particularly concerned about the destruction of the Cambria Pine habitat as well as the hazards of building on the steep, substandard lots of the antiquated Lodge Hill subdivision in Cambria. The goal in Cambria was to save the Cambria Pine habitat by reducing the size of the homes that could be built on small lots and retiring these lots wherever possible.

Before the certification of San Luis Obispo County’s Local Coastal Program, the Coastal Commission regulated development in the coastal zone. During this period, the Coastal Commission required developers to retire one small, steep lot in the Lodge Hill subdivision in return for approving a permit to build a home on another lot. This process became increasingly formalized from 1980 to 1988 with the development of the County’s Local Coastal Program (LCP). The LCP ultimately targeted a canyon filled with Monterey Pine, known as Fern Canyon, and a hillside visible from Highway 1 as two areas in which development should be minimized.

To maximize public input, questionnaires were sent to every property owner in the affected areas. The results of these questionnaires helped to formulate the program as well as identify potential buyers and sellers of development credits.

In the mid 1980s, the Land Conservancy of San Luis Obispo County proposed a restoration plan for Lodge Hill. In 1986, the Coastal Conservancy and the Land Conservancy entered into a ten-year contract to implement the restoration plan using $275,000 from the Coastal Conservancy as a revolving fund. The fund is used to buy environmentally-sensitive lots and is replenished through the sale of development credits from these lots. At the end of the ten-year contract, the money remaining in the revolving fund is to be returned to the Coastal Conservancy.

When the Local Coastal Program was adopted in 1988, the County took over the authority to issue building permits in the coastal zone in accordance with the LCP. The County reduces the potential impact of building on the substandard Lodge Hill lots by restricting the size of any dwelling unit constructed on a small lot. However, some parts of the Lodge Hill subdivision have been designated as appropriate to accommodate larger dwellings. The owners of property in these receiving areas can increase the size of their homes by buying development credits from the Land Conservancy to build additional floor area on these receiving lots. The Land Conservancy uses the proceeds from these credit sales to buy more environmentally-sensitive land in the special project areas.

A second countywide TDR program, adopted in October 1996, evolved from the work of a Growth Management Advisory Committee appointed in 1989. Following a Committee Recommendation, the County prepared a three-phase study called the Rural Settlement Pattern Strategy. Phase I of this study revealed that there are already 23,000 undeveloped lots in the unincorporated portions of San Luis Obispo County of which 12,000 lots are in rural areas. Approximately 2,000 of these lots are in antiquated subdivisions. In addition, the County’s general plan would allow the creation of another 8,000 new lots in rural areas. In the 1980s, development in the County shifted away from the edges of urbanized areas and into these rural areas. The report concluded that this pattern of development had serious consequences for agriculture, the environment and the provision of infrastructure and public services.

In 1991, the Phase II Report recommended four major policies.

- Concentrate development in urban areas.

- Locate new development close to existing urban areas.

- Avoid fragmentation in transition areas.

- Protect agricultural and rural character by retaining existing uses and lot sizes in outlying areas.

In Phase III, a Transfer of Development Rights Technical Advisory Committee was formed which identified areas with TDR potential and demonstrated how TDR could work in specific instances. Seven years of work paved the way for adoption of the County’s new TDR program in October, 1996. The ordinance is designed to preserve agricultural land and natural resources as well as retire the thousands of legal lots scattered throughout the rural portion of the County. This new program is referred to as the countywide program. The County also allows individual communities to establish community-based programs; the original program in Cambria is considered a community-based program.

The Local Coastal Program (LCP) contains a land use element and implementing ordinances for the North Coast Planning Area, which includes Cambria. The land use element classifies the Monterey Pine Forest as a Sensitive Resource Area, identifies specific needs in the Lodge Hill area and describes the transfer of development credits process.

In the San Luis Obispo County TDC program for Cambria, sending sites are lots in the Lodge Hill subdivision designated as special project areas. The LCP specifies that these special project areas, or SPAs, contain the most environmentally-sensitive land including steeper slopes, heavier tree cover, areas visible from Highway 1 and wildlife corridors. As described above, two SPAs have been identified to date: SPA #1, Fern Canyon and SPA #2, a scenic hillside visible from Highway 1 when approaching Cambria from the south.

Different development standards apply depending on whether a parcel is in SPA #1 or #2, whether the slope is greater or less than 25 percent, and whether the parcel is in a single-, double- or triple-lot configuration. For example, a single lot, 25 feet wide and 1,750 square feet in area in SPA #1 could have a house footprint of 500 square feet and a total floor area of 900 square feet if the lot has a slope of 25 percent or less. If the slope exceeds 25 percent, the maximum footprint would be 400 square feet and the total floor area would be limited to 600 square feet. Consequently, to build a home with more than 1,000 square feet of floor area, a property owner must either acquire an adjacent property or buy transferred development credits for additional floor area.

The ordinance section of the LCP specifies lots which are eligible to receive transferred development credits. Lodge Hill subdivision lots which are not within SPA #1 or #2 can receive floor area transferred from lots within these two SPAs. Lots within SPA #1 or #2 cannot receive development credits from lots outside of these special project areas. However, the floor area of a dwelling unit inside a special project area can be increased through transfers of floor area from lots in the same special project area.

The San Luis Obispo County LCP requires the participation of a public agency or non-profit organization in the TDC process to provide public information, record easements and, most importantly, buy and sell development credits. To date, the Land Conservancy of San Luis Obispo County is the only non-profit organization to seek and be granted authority to implement the program. The Land Conservancy, after approval from the Coastal Conservancy, buys lots from willing sellers in SPA #1 using the revolving fund started with the $275,000 grant from the Coastal Conservancy. The Land Conservancy records a conservation easement on these lots and, in turn, offers the development credits from these retired lots to receiving site owners who want to build a larger house than the slope-density requirements of the code would normally allow. The proceeds from these sales are returned to the revolving fund and used to buy more sending sites.

A Minor Use Permit is needed from the County to allow the additional floor area on the receiving lot. In approving the permit, three findings must be made: that the easements on the sending site permanently preserve that site as open space; that the proposed receiving site can accommodate the additional floor area without the need for variances; and that the proposed transfer implements the purpose of the program. A Minor Use Permit is granted administratively but the staff decision can be appealed to the County Planning Commission.

Receiving site owners must demonstrate to the County that they have at least reserved the TDCs needed for the additional floor area. The Land Conservancy originally allowed receiving site owners to reserve TDCs indefinitely with a ten percent deposit. To avoid the problem of unused reservations, the Land Conservancy now allows TDCs to be reserved at no cost for the first six months; however, the Land Conservancy requires a 50 percent deposit after the first six months and a 100 percent deposit after one year.

The Cambria program offers a one-to-one transfer ratio. The floor area purchased by the receiving site owner represents the same amount of floor area which cannot be built in a sending area because it has been purchased and deed-restricted by the Land Conservancy. However, the LCP limits the amount of floor area that can be transferred to receiving sites; even using transferred floor area, the maximum footprint cannot exceed 45 percent of the receiving lot area and the total floor area cannot exceed 90 percent of the receiving lot area. In actuality, most receiving site applicants do not need the maximum allowed footprint or floor area; for lots receiving TDCs from 1987 through 1990, building footprints averaged 31 percent of the lot area and floor area averaged 55 percent of the lot area.

The program does provide one extra incentive. In addition to the transferable floor area, the sending site may have water or sewer credits that are available for transfer if the lot is retired. These sewer and water credits are not needed at the site receiving the floor area if the transferred floor area is being used to increase the size of an existing home that already has a water meter. However, these water and sewer connection rights can be transferred to other properties within the Cambria Community Services District that are not served with sewer or water. The code further specifies that two potential receiving site owners can jointly finance the retirement of a sending lot with the owner of a Lodge Hill receiving site getting the transferred floor area and the owner of a lot outside of Lodge Hill, but within the Community Services District, receiving the water and sewer connection rights.

The Land Conservancy of San Luis Obispo County is the only purchaser that buys land in Lodge Hill strictly for the purpose of transferring development credits. Since it has this dominant position in the market, the Land Conservancy has had to carefully consider its pricing strategy. As a benchmark, the Land Conservancy considers the sales price for TDCs and estimates a fair lot purchase price based on the transferable floor area that each lot will yield. However, rather than maintain an inflexible purchase formula that could lead to disgruntled sellers, the Land Conservancy will negotiate a reasonable purchase price. The Land Conservancy has acquired sending sites at an average price of $10 per square foot and has sold TDCs at an average price of $20 per square foot.

After the Land Conservancy acquires a lot and records a conservation easement, it applies to the County for certification of the floor area that can be transferred from that sending site. The County Planning Department reviews a form completed by the Land Conservancy for accuracy. After confirming all the information, the form is signed by the County as a certification that the Land Conservancy can sell the TDCs from the lot.

Under the countywide program adopted in 1996, sending sites can be any land parcels which meet criteria for agricultural land, resource land or antiquated subdivisions. The County decided to use criteria rather than map sites due to the information the County would need to accurately designate sending sites throughout the County. In addition, the County was responding to the concerns of property owners that mapped sending sites would create a green cloud that could decrease the value of designated properties. In each category, there are general as well as specific criteria. For example, to be eligible under the Natural Resource Criteria, a property could meet specific criteria, such as designation as a Natural Area in the County’s general plan. Alternatively, under General Criteria, the County’s TDC Review Committee can decide that a property qualifies as a sending site because its preservation would promote soil conservation, erosion control or any of several other non-specific objectives. The Review CommitteeÕs decisions on sending site eligibility and assignment of bonus credits must be made within six months of receipt of a complete application; the decision must follow a public hearing and is subject to appeal.

To determine the number of credits available to a sending site, the difference in the value of the property with and without the credits is determined by an appraisal. Then this value is divided by 10,000 to determine the number of credits. The formula was based on research that shows that developers would only be willing to pay $10,000 per TDC. the formula does not determine the price of TDCs, which is established by negotiations between private buyers and sellers. The formula is only used to fix the number of TDCs available for sale. For example, if an appraisal determines that the value of a property after imposition of an easement would decline $80,000, that sending site would be assigned eight TDCs. The County based TDC allocations on value diminution out of a concern that only undesirable lots would be preserved unless property value was taken into consideration.

The ordinance allows a 10 percent bonus in the number of TDCs assigned to a sending site for each additional resource that would be protected on the sending site such as wildlife habitat, oak woodlands, wetlands or scenic areas. However, there is a 50 percent maximum on this bonus. Sending site owners can elect to claim bonuses based on Existing Documentation Criteria, for example a 10 percent bonus can be claimed for the presence of a blue line stream on a USGS map. Alternatively, property owners can make their own case for bonuses through Special Study Criteria in which the sending site owners demonstrate why they believe their properties qualify for bonuses.

In reviewing an application submitted by the sending site owner, the County issues a Notice of Eligibility which qualifies the property and establishes the number of credits assigned. the sending site owner then finds a buyer and negotiates a price for the TDCs.

Before selling TDCs, an easement must be recorded on the sending site. This easement simply prohibits residential development if the owner is not applying for bonus credits. However, when bonus credits are involved, the property contains special resources and the easement is tailored specifically to the property; these easements not only restrict uses but also impose necessary safeguards such as the preservation of trees along a stream.

After recording this easement, the sending site owner is advised to work with the County Assessor on a review of the property tax assessment given the fact that the property’s development potential is limited by the easement.

The County TDC Administrator tracks various information: the number of TDCs assigned to a property; who TDCs are transferred to; where TDCs are ultimately used; and how many TDCs are available for transfer. The TDC Administrator issues Certificates of Sending Credits to property owners with a Notice of Eligibility and proof of a recorded easement. Once the easement is recorded, the County also amends the County General Plan, giving the sending site a TDC-Sending Site Combining Designation.

To be eligible as a receiving site, a property must meet all of the following seven criteria.

- The environmental review of the proposed project indicates that the additional density would not create or worsen significant, unavoidable adverse environmental effects.

- The property is not within an Agricultural Preserve.

- The site is within ten miles of an urban reserve line.

- The building pad and access roads/driveways have a less than 30 percent slope.

- The development footprint is outside the Sensitive Resource Area, Flood Hazard, Geologic Study Area, Earthquake Fault Zone or Very High Fire Hazard Area as defined by the County Land Use Element.

- The development footprint is outside of a Natural Area or Significant Biological, Geographical or Riparian Habitat Area as shown in the County‘s general plan.

- The development will comply with all development standards.

The amount of density bonus allowed to a receiving site project varies depending on the location of the receiving site. If the receiving site is outside of a city limit line, but within a city’s urban reserve line or a village’s village reserve line, the bonuses are as follows provided that the affected city or village sends a letter stating that the city or village supports the transfer and finds the density increase to be consistent with adopted plans and codes.

- Up to a 75 percent bonus if the site is within an urban reserve line and served by community water and sewer.

- Up to a 50 percent bonus if the proposed site is within a village reserve line.

If the proposed receiving site is outside urban and village reserve lines, the following bonus densities are applicable.

- Up to 50 percent density bonus is available for a receiving site from 0 to 5 miles from an urban reserve line.

- Up to 35 percent bonus is achievable for receiving sites that are from 0 to 5 miles from a village reserve line or from 5 to 10 miles from an urban reserve line.

In addition to the density bonus discussed above, this program also offers the following additional bonuses as long as the total density bonus does not exceed 100 percent.

- An extra 25 percent bonus can be granted if the TDCs come from a sending site determined to be a significant natural resource by the TDC Review Committee.

- An extra 25 percent bonus can be granted to receiving site projects which incorporate special amenities such as trails, coastal access and parkland.

The County recognized that the neighborhoods impacted by increased density at receiving sites should be able to enjoy the benefits of nearby open space; consequently a receiving site must use credits from sending sites located within a three-mile radius of the receiving site. However, if credits cannot be obtained within three miles, credits can be used from any sending site within the same region as the receiving site; a region consists of from two to four of the County’s planning subareas.

Property owners who merely wish to know whether their properties qualify as receiving sites can apply for a Preliminary Determination. However, to know conclusively that a property qualifies and the extent of the density bonus, owners must obtain a Determination With Tentative Map.

Before the final map for the receiving site project is recorded, the TDC Administrator must transfer the TDCs to the receiving site owner in the form of a Receipt of Transfer. The receiving site owner then signs over the Receipt of Transfer to the County and the map can be recorded with the additional density made possible by the TDCs.

Finally, the program requires the TDR Administrator to present an annual report to the County Board of Supervisors in order to determine whether program refinements are needed.

The San Luis Obispo County TDC program for the Cambria community has most of the features usually found in a successful program. The development restrictions on both the sending and receiving sites cannot be circumvented by variance or some other deviation process; consequently, owners either have to adhere to the code or buy TDCs in order to increase house sizes. The TDC bank services provided by the Land Conservancy make the process of acquiring TDCs fast, easy and dependable. And, by skillful management of the revolving fund, the Land Conservancy has more than doubled the original grant amount, ensuring that it can continue to buy sending sites to meet the demand. Finally, the TDC program has been supported by public education and involvement including questionnaires to property owners and workshops for real estate professionals.

Most importantly, the Land Conservancy of San Luis Obispo County has worked closely with the Coastal Conservancy and San Luis Obispo County to make the Cambria program a success. Because the Coastal Conservancy grant provided seed money, the Land Conservancy has been very active in SPA #1, Fern Canyon. Since the start of the program, the Land Conservancy has purchased 85,000 square feet of floor area credits. Approximately 230 lots have been protected as a result. The purchase price for these lots generally ranges from $4,500 to $6,000 per lot. These acquisitions have created a continuous open space area within Fern Canyon. Since 60,000 square feet of credits have been sold, the program bank contains 25,000 square feet of credits as of April 1997. At the average rate of 5,000 credits sold per year, the program probably has enough credits to last for five more years without having to buy any more lots.

In addition to the seed money provided by the Coastal Conservancy, Ray Belknap attributes the success of the Cambria program to five other factors.

- The receiving sites were scattered throughout the community; consequently no single neighborhood had to bear the entire burden of the additional density.

- The sending sites were prominent parcels, so the community clearly related to the objective.

- The people of Cambria are committed to the preservation of the Cambria Pine.

- The value of the transferred density stays within the community.

- And the program was tailored to the unique needs of the Cambria community.

In a status report prepared in 1993, the Land Conservancy made several observations about the program and suggested a few possible improvements. The adoption of the countywide TDC program has addressed some of the concerns expressed in the 1993 report regarding the need to expand the use of TDR to other areas. But in other respects, the observations may still be worth noting, as follows.

- As described above, the LCP allows lots which were acquired for preservation to be consolidated and resold as estate lots with special restrictions on the placement of improvements. The easements placed on the lots acquired to date have allowed for this possibility but, actually, there have to date been no resales of consolidated lots. The Land Conservancy recognizes that there would probably be a negative reaction to a proposed development on a site protected by an open space easement. Consequently, the Land Conservancy recommends the creation of two separate programs for acquired lots: preservation versus consolidation.

- Under the preservation option, when an acquired sending lot is environmentally-sensitive, the Land Conservancy proposes that it be publicly-owned, perhaps in a forest management district. On the other hand, the Land Conservancy sometimes acquires lots that are not environmentally sensitive, often by owners who are donating these lots to the Land Conservancy. For these properties, the Land Conservancy suggests a lot consolidation program in which the open space easement is handled differently. Under this proposed program, larger lots with low environmental value would not receive an open space easement and could be resold. Smaller lots that are not environmentally-sensitive could be restricted by easements but made available to adjacent property owners as open space.

- Some concerns have been expressed that the transfers of TDCs might allow houses that are too big for their receiving lots. The Land Conservancy evaluated every project that received transferred floor area in the first four years of the program. In the opinion of the Land Conservancy, only eight out of the 110 receiving lots had a house that appeared too big. The Land Conservancy concluded that the large appearance of these eight houses was not the result of excessive density but rather a factor of building design, the location of the house on the lot and the orientation of the house to the street.

In a 1997 update on the Cambria program, the Land Conservancy of San Luis Obispo County made the following observations.

- The Conservancy continues to urge that their land holdings be acquired by a public parks district.

- One important reason for public ownership is that the trees in Fern Canyon are susceptible to Pine Pitch Canker, creating an immediate need for pro-active management.

The countywide TDC program was developed to be voluntary, incentive-based and market driven. As of right densities were not changed on either sending or receiving sites to motivate transfers. Instead, the program offers density bonuses of up to 100 percent to receiving site developers and creates an exchange rate which recognizes the true value which a sending site owner is relinquishing when deed-restricting a property. Immediately following adoption of the countywide TDC program, San Luis Obispo County was sued by a citizens group concerned about the impact of increased density at potential receiving sites. At the time this book went to press, the countywide program was expected to remain in effect but with possible refinements. Although no formal applications had been filed as of April 1997, several major projects involving transfers were ready for submittal pending resolution of the lawsuit.

BACKGROUND

Lake Tahoe is 12 miles wide, 22 miles long and up to 1,645 feet deep. The entire Tahoe Basin comprises 207,000 acres of land and includes at least a portion of one incorporated city, ( South Lake Tahoe ), two counties in California and three counties in Nevada. The lake has an elevation of 6,225 feet above sea level and is surrounded by mountain peaks in the Sierra Nevada Mountains on the border between California and Nevada. The lake is well known for its clarity; it is possible to see up to 70 feet in depth. In fact, it has been designated as an outstanding national resource under the federal Clean Water Act.

The Tahoe area is very popular for tourism, vacation complexes and retirement homes thanks to the attraction of gambling, snow skiing and other outdoor sports as well as the natural beauty of the lake itself. The states of California and Nevada have long recognized the need to cooperate on methods of ensuring that Lake Tahoe’s popularity does not endanger the fragile environment which makes the area so attractive.

In 1969, the Tahoe Regional Planning Agency (TRPA) was formed by the two states and ratified by the United States Congress. TRPA was strengthened in 1980 with a revised compact that gave the agency the authority to adopt environmental quality standards. Following the adoption of the 1984 Regional Plan, TRPA was sued by an environmental group and the California Attorney General’s office for failing to implement the 1980 compact. An injunction on development was imposed and TRPA was sued by a property rights organization claiming that the new plan was a taking of property. A consensus-building approach led to the adoption of an amended regional plan in 1986 and implementing zoning codes in 1987. In 1987, the injunction was lifted and some of the lawsuits were dismissed. The 1987 ordinances have regulated development in the Tahoe Basin since that time.

The revised Regional Plan regulates land use, density, growth rates, land coverage, excavation and scenic impacts. TRPA is particularly concerned about land coverage because excess land coverage can lead to further degradation of Lake Tahoe’s water quality. Excess land coverage increases water quality degradation by removing the land’s ability to slow down storm water run-off, remove nutrients and reduce erosion. Over the past 30 years, water clarity has declined at the rate of about 15 inches per year.

To determine the percent of a site which can be covered by homes, driveways and other impervious surfaces, TRPA has created two methods of categorizing the capability of a site to withstand land coverage. Both methods evaluate land characteristics such as erosion hazard, runoff potential and presence of a stream environment zone. Based on the capability classification, each parcel is assigned an allowable lot coverage percentage. For example, under one assessment system, as much as 30 percent of a site could be covered by impervious surfaces if the site was in the highest land capability classification. On the other hand, if a site is in the lowest land capability classes, those that identify stream environments, extremely steep slopes and rocky terrain, almost no new land coverage is allowed except for limited purposes such as recreational improvements or site access; for example, in Stream Environment zones, only one percent of a parcel can be covered by impervious surfaces. If a parcel contains two or more capability classifications, coverage limits are determined by multiplying the coverage limits by the percent of the total parcel in each category; however, the actual coverage must be confined to the least-sensitive portion of the property.

Under the land coverage regulations, the owners of some parcels would not be able to build a small home or even add a small addition or garage to an existing dwelling. To provide some flexibility while still maintaining land coverage limits on average, TRPA instituted a land coverage transfer program. Under this program, receiving site owners can acquire coverage from a sending site in order to obtain the coverage rights needed for them to build or expand. In addition to the land coverage transfer program, TRPA also allows transfers of allocations plus transfers of development rights both from developed as well as undeveloped properties.

PROCESS

TRPA allows transfers for four different purposes. The first program, as detailed below, is the land coverage transfer process. However, TRPA also allows transfers of allocations as well as the more traditional transfers of development rights. An allocation is a permit to build a residential unit under TRPA’s building quota system. In the Tahoe Basin, a building allocation and a development right plus the necessary coverage rights are all needed before a building permit can be issued. In addition, TRPA makes a distinction between transfers of development rights from undeveloped properties versus properties which contain existing buildings. Consequently, in addition to the transfer of land coverage program, TRPA provides for three other types of transfers, which are individually described below: transfers of residential allocations, transfers of development rights from undeveloped property and transfers of development rights from properties which are already developed.

Transfer of Land Coverage - In the transfer of land coverage program, sending sites must be classified as being more sensitive than receiving sites as determined by a lower land capability classification. In addition, sending and receiving sites must be located in the same hydrologic region; there are nine hydrologic regions in the Lake Tahoe Basin. When coverage is transferred from a sending site, the sending site must be deed-restricted to reflect the retirement of land coverage rights.

The program uses a one-to-one transfer ratio; the amount of coverage available for transfer equals the amount of coverage precluded at the sending sites. Parcels proposed as receiving sites have two coverage limits: the base coverage limit determined by the land capability rating and a maximum coverage limit that applies when coverage is transferred to the site. With the exception of the California Tahoe Conservancy bank, discussed below, transfers of coverage are handled through private transactions.

Allocations - TRPA limits the amount of development which can be added to the basin every year in order to ensure that the public infrastructure keeps pace with the rate of growth. Under this quota system, a different allocation is set for three different land uses. Residential uses in the Tahoe Basin are limited to 300 additional dwelling units annually. Commercial development is limited to 400,000 square feet of floor area for the ten year period from 1987 to 1996; most of this amount is assigned to designated community plan areas. Tourist accommodations are limited to 200 room units for this same ten year period. In addition, each tourist room allocation must be matched with a transferred existing tourist room before a new room can be constructed; these new tourist rooms must be built in community plan areas. Each year, TRPA transmits the allocations to the six jurisdictions; these jurisdictions determine their own methods for distributing these allocations.

To transfer allocations, the sending site must be a vacant parcel of land which is not eligible for development due to a highly-sensitive land capability classification. After an allocation transfer, the sending site must be permanently precluded from development either by deed restriction or transfer of title to a public agency or non-profit agency established to preserve land for open space purposes. The site receiving the transferred allocation must be planned for residential development and must have a less-sensitive land capability classification than the sending site. The appropriate local unit of government as well as TRPA must approve the transfer.

Transfers of Development Rights From Vacant Land - In addition to transfers of land coverage and building allocations, TRPA provides the more traditional process of transferring development rights. An important feature of the TRPA program is the fact that any lot only has the right to build one dwelling unit regardless of the density designation found in the zoning code. Development rights must be transferred to the receiving site in order to achieve the code-permitted density.

The rules for these transfers differ somewhat depending on whether the sending site is vacant or already contains some existing development. Transfers of development rights from property which is undeveloped must meet six provisions. For example, the development rights on the sending site must be retired following the transfer and the project proposed for the receiving site must comply with the use and density requirements for the property.

Transfers of Existing Development Rights - Finally, TRPA encourages the elimination of existing structures from stream environmental zones and other sensitive land capability areas by allowing property owners to create development rights through the demolition of inappropriately-located structures. In addition to creating a transferable development right, the demolition also creates the equivalent of a building allocation because no new structures are created when a building is demolished. The combination of a development right and a building allocation can be very valuable under TRPA’s quota system, giving property owners a strong incentive to remove improperly-sited buildings. The types of existing development which can be transferred include residential units, tourist accommodations, commercial space, public service uses and recreational facilities.

Under the transfer of existing development ordinance, transfers must comply with nine requirements including the following: the transfer is limited to the type of development being removed from the sending site; the transferred use must be a permitted use on the receiving site; the proposed development must comply with the site development requirements for the receiving site; the appropriate local governments must approve the transfer; the proposed building removal must be consistent with all TRPA plans and codes including provisions for historic structures; the receiving site must be in one of the less-sensitive land capability districts.

When transfers of existing development occur, the existing structures or facilities must be removed and the land restored to as natural a state as possible. When all existing development has been transferred from environmentally-sensitive lands, the sending sites must be permanently deed-restricted to open space. When only a portion of existing development is removed from a sensitive sending site, an easement must be recorded preventing transfers of development back to the sending parcel. However, when existing development is removed from non-sensitive land, development may be transferred to the sending site under limited circumstances.

The most common recipients of parcel donations are the US Forest Service, the Nevada Division of State Lands and the California Tahoe Conservancy. The California Tahoe Conservancy, a state agency created in 1984, began a Land Coverage Bank in 1987. The Land Coverage Bank performs three important functions: it creates land coverage rights, allocations and development rights by acquiring and restoring sending sites; it maintains an inventory of rights; and it provides an easy way for developers to comply with TRPA regulations by buying rights rather than having to acquire, restore and retire properties themselves. The proceeds from the sale of these rights is, in turn, used to acquire additional sending sites.

PROGRAM STATUS

TRPA has all of the ingredients needed for a successful TDR program. The demand to build in the Lake Tahoe area is high. And the limitations placed on development provide a strong motivation to buy coverage rights, development rights and buildings allocations. In fact, the market is so strong that developers are willing to buy the rights created by the demolition of existing structures so that their projects are not subject to the annual quota system. In addition, the transfers of development rights are the only way for land owners to achieve the density limitations provided by the zoning for their properties.

As a result, the TRPA program is one of the most active in California with an estimated 25 to 35 transfers per year of land coverage rights alone.

The activity of the Land Coverage Bank has been particularly well documented by John Gussman, Staff Counsel for the California Tahoe Conservancy. From its start in 1987 to 1993, the Conservancy had acquired 79 parcels of land representing almost 850,000 square feet of coverage. In the process, the Conservancy also acquired over 19,000 square feet of commercial floor area rights and 19 units of tourist accommodations. As of 1993, over 80,000 square feet of the land area acquired had been restored to its natural state.

Of the total rights acquired, the Bank has sold over 500,000 square feet of coverage, as well as development rights and allocations, to public and private projects. The public projects included transportation and utility facilities, a waste recycling plant and a jail; the private sector projects included both residential and commercial developments. In sales to over 1,400 projects, the Bank received over $1.2 million in revenues for reinvestment in the Bank’s revolving fund.

In addition to concern for environmental resources in general, Alachua County specifically wants to preserve the character of Cross Creek, the village that was the setting for many of the writings of Marjorie Kinnan Rawlings, author of "The Yearling". The County’s Comprehensive Plan recognizes that the character of Cross Creek is a combination of people and homes as well as natural resources.

As a result, the County requires that development be located away from areas to be preserved for open space, passive recreation, agriculture, water conservation, wildlife habitat and sensitive environmental areas. In most instances, the County uses clustering requirements for individual properties or multiple properties which are contiguous and under the same ownership. But in the Cross Creek area, transfers of development rights can occur between adjacent properties in common or separate ownership which are part of a single development application.

The Cross Creek Special Study Area was adopted in 1985; the policies in that Study were implemented as development regulations in 1987.

Alachua County’s Comprehensive Plan does not only set forth land use goals like most general plans. It also establishes specific procedures for achieving those goals. Consequently, details about the transfer of development rights process appear primarily in the comprehensive plan. The zoning code only provides the planned development process to implement the TDR policies called for in the comprehensive plan. Planned development applications require public hearings before the planning commission and the county commission. Prior to approval, these commissions must attach conditions to each proposed project and make findings on how the approval and the conditions of approval meet the criteria necessary for a planned development.

The TDR mechanism appears in both the land use and conservation elements of the County’s Comprehensive Plan. In the Future Land Use Element, Alachua County identifies conservation areas which allow for the protection or enhancement of passive recreation/open space activities, wildlife preserves, water conservation areas, agricultural land and other environmentally sensitive areas. Land in a conservation area may be designated for residential use. But the Element requires residential density to be transferred wherever possible to non-conservation portions of the same property or contiguous properties under the same ownership. If this transfer is not possible, residentially-designated land in a conservation area can be developed with single-family residential at a density of one unit per ten acres.

Alachua County places different restrictions on the TDR program available in the special study area for Cross Creek Village. As mentioned above, the County recognizes that preservation of the character of Cross Creek requires a balance of the natural and manmade environment. The potential sending sites in this special study area include five land use categories collectively called the Resource Protection Area.

In the Cross Creek Special Study Area, receiving sites are in two development-oriented areas: a Village Center Development Area and a Village Periphery Development Area. The Periphery Area allows a density of one unit per five acres without transfers. However, this density can be increased to one unit per acre in order to accommodate transfers from the Resource Protection Area sending sites described above; that constitutes a density bonus of 400 percent. In the Village Center Development Area, density can be increased to two units per acre for projects which incorporate transferred rights.

Like the County-wide program, in the Cross Creek Study Area, transfers must be made to contiguous property. However, unlike the County-wide program, in the Cross Creek Special Study Area, the sending and receiving sites are not required to be in common ownership. In Cross Creek, transfers could occur between two properties under separate ownership if the owners submit a single development application. In actuality, contiguous sending and receiving sites in Cross Creek are likely to be under the same ownership even though they are not required to be.

According to Wendy V. Kinser, Chief of Development Services, the program has been used by several single-family developments. However, the County has not kept statistics on the exact number of transfers or the land area saved through this process.

In about 1970, the County decided to protect agricultural areas through the adoption of an Agricultural district designed to preserve large areas of the County for agricultural use, prevent scattered development and preserve woodlands, natural habitat, scenic values, green space, water retention areas and other uses beneficial to the County. This agricultural preservation zone limits development to one residential unit per 40 acres of land. The ordinance also allows development rights to be transferred to contiguous properties subject to the conditional use permit process as long as the receiving site does not exceed one dwelling unit per ten acres.

Similarly, Blue Earth County also allows transfer of development rights in its Conservation zoning district. That district is designed to protect environmentally-sensitive areas, preserve natural ground cover and conserve natural resources in general and water resources in particular. As in the Agricultural district, transfers are made on a one-to-one ratio with contiguous properties. With TDR, receiving site densities increase from one unit per 40 acres to one unit per 10 acres, a 300 percent increase.

In the Blue Earth TDR program, sending sites are lands in the Agricultural and Conservation zoning districts. Single-family residences are permitted in these districts at a density of one unit per quarter of a quarter section, or one unit per 40 acres. However, development rights may be transferred to a contiguous lot through a conditional use permit.

The transferred development rights cannot make the density of the proposed receiving-site project greater than the density of the surrounding neighborhood. In no event can the density of the proposed receiving site project exceed one unit per ten acres; in other words, TDR offers a 300 percent density bonus. In addition, the proposed receiving site project must meet 15 other requirements; for example, the project cannot create pollution hazards or be injurious to adjacent properties.

The County Planning Commission makes a recommendation on proposed conditional use permits. Then, the County Board of Commissioners approves a resolution granting the transfer of development rights and authorizing the execution of a transfer agreement.

According to Veryl Morrell, County Land Use Administrator, the TDR provisions have resulted in numerous transfers. However, Mr Morrell questions whether the ordinance is achieving the goal of preventing scattered development. Since the transfers occur between contiguous parcels, the receiving sites are typically in agricultural areas. The introduction of new, non-farm residents often creates land-use conflicts with agricultural activities because of odor, noise, spraying of fertilizers and pesticides and slow-moving farm machinery on two-lane, rural roads.

According to Mr. Morrell, the County is now engaged in a comprehensive revision of its general plan. Once adopted, this new general plan may need to be implemented through changes in the TDR ordinance.

Growth rates doubled in Buckingham Township in the 1970s and the township lost about one eighth of its farmland to development between 1967 and 1977. As a result, the preservation of agricultural land became a primary goal of the Township’s 1974 Comprehensive Plan. The Plan placed about one fifth of the Town’s land area in a development district and the remainder in agriculture and resource protection districts.

To implement the 1974 Plan, a zoning ordinance was adopted in 1975 that replaced the previous one-unit-per-acre blanket zoning with five new zoning districts. Land in the development district was upzoned to 2.5 units per acre; but to encourage farmland preservation, the ordinance included a TDR component that allowed even more density to projects using development rights transferred from farmland. Land in the preservation district was downzoned from one unit per acre to either 0.2, 0.3 or 0.5 units per acre for on-site development. However, as compensation for this downzoning, sending site owners were allowed to transfer development rights at the rate of one unit per acre.

The original program was hindered partly because the number of transferable rights in the sending areas far exceeded the number of rights which could be accommodated in the receiving areas. Other drawbacks included low demand for higher density developments and a lack of sewers and other infrastructure in the proposed receiving areas to accommodate increased densities.

In 1991, the Township undertook a Comprehensive Plan revision designed to control growth and preserve farmland. That plan revision led to the adoption of a new zoning code. The transfer of development rights portion of the new zoning code, adopted in 1994, reduced the number of available TDRs in the sending areas. This, in conjunction with the provision of infrastructure in the receiving sites, is expected to increase interest in the use of TDR.

The original 1975 zoning ordinance incorporated an attractive incentive to transfer development rights from the sending sites in the Agricultural District (AG) to the other four zoning districts. In the AG district, by-right development could occur on site at relatively low densities of one unit per five acres, one unit per three acres or one unit per two acres. However, development rights could be transferred from these sending sites at the rate of one unit per acre; consequently, the transfer ratio ranged from 2:1 to 5:1. If sending site owners opted to build on sending sites, they were required to cluster new development on either 10 or 20 percent of the sending site and deed-restrict the remainder for agriculture.

When transferring development rights, sending site owners petitioned to have their land reclassified from AG-Agricultural to AP-Agricultural Preserve. The sending site owners also recorded a covenant specifying the restrictions placed on the land.

Similarly, receiving site owners were motivated to buy development rights by density increases of from 39 percent to 511 percent for receiving-site developments using TDR, depending on the type of development proposed. However, the receiving sites could only accommodate 1,862 units while the sending sites were capable of generating 12,474 development rights. In other words, there was no place to transfer the majority of the rights available in the sending areas.

In 1994 and 1995, Buckingham Township enacted significant amendments to the TDR component of its zoning ordinance. Under the new ordinance, sending sites are parcels within the Township’s two agricultural zoning districts, AG-1 and AG-2. These two zoning districts cover over half the Township’s total land area. Potential sending sites must be at least 25 acres in size and enrolled in the Township’s Agricultural Security District under the provisions of Pennsylvania state law. As of right density in the AG-1 is one unit per 1.8 acres.

To determine the number of transferable development rights available, the area precluded from development by easements and other deed restrictions is deducted from the total site area. Then, the base site area is calculated by further reducing the size of the site by the amount of acreage in flood plains, water areas, wetlands, steep slopes and forests. The number of development rights available for transfer is this base site area, in acres, multiplied by 0.85. In addition, one development right must be deducted for each dwelling unit located on the site. Using the example of a parcel with 100 acres of unrestricted land, the owner could build 55 units on site, ( 100/1.8 ), or transfer 85 dwelling units, ( 100 X 0.85 ). This represents a transfer ratio of 1.55 to one.

The transfer process begins when an agreement of sale for development rights, signed by both the seller and the buyer, is submitted to the Township Zoning Officer. The applicant must also submit a proposed covenant for the sending site which limits future uses to agriculture, agricultural-related activities and preservation of forests, fields, wetlands and other natural resources. The development rights are not transferable until this covenant has been approved by the Township and recorded.

Special procedures apply when property owners want to transfer only a portion of the development rights from their sending sites. In these procedures, the applicants first calculate the sending area’s resource-restricted land, or land constrained by flood plains, wetlands, forests and steep slopes. The land from which TDRs are proposed to be sold must have a ratio of resource-restricted land to total land area not greater than the ratio of resource-restricted land to total lot area of the entire property.

When property owners want to sell development rights from a portion of their land and develop the other portion, they must submit a sketch plan showing the total number of units which could be built on the site under normal, non-TDR code provisions. Then the number of TDRs transferred off this site is deducted from that total and the remainder is the number of units which can be built on site after the TDRs are transferred.

In 1994, Buckingham greatly increased the number of zoning districts eligible to receive TDRs. Now, receiving sites can be located in the Township’s two agricultural zones, AG-1 and AG-2, as well as four residential zoning districts: the Business & Residential District, the R-1 Residential District, the Village Residential-1 and the Village Residential-2 district.

Land in the two agricultural districts, AG-1 and AG-2, can be receiving sites as well as sending sites. As mentioned above, these two zones occupy more than half the land area of the Township. By-right density in these zones is one unit per 1.8 acres. Property owners can achieve smaller lot sizes, with no increased density, by clustering development on less than half the site. However, when TDRs are transferred to the site in conjunction with clustered subdivisions, density can be doubled.

To qualify for clustering options, land zoned AG-1 and AG-2 must be at least 25 acres in size. The land proposed to be set aside as open space must have Class I, II or III agricultural soils and be viable for farming: at least half of the proposed open space area must be in one parcel; all open space parcels must have a farmable shape with dimensions of at least 200 feet in all directions; and all open space parcels must have access to a public road and be accessible by farm equipment.

Once the receiving site subdivisions are approved, the open space parcels are precluded from further subdivision, regardless of any intervening zoning change, either through a notation on the subdivision plan or a deed restriction. Furthermore, subdivision plans must include the method in which the owner will comply with the Township’s code requirements for protecting and maintaining the open space for the preservation of farmland. The plan is considered a contract between the land owner and the Township.

Land in four residential zoning districts cannot be used as sending sites but can serve as receiving sites. In the Planned Business & Residential District and the Village Residential-3 District, the base density of five units per acre can be increased to 15 units per acre by transferring one development right for each additional unit, a 200 percent increase. Likewise, in the R-1 residential district, base density can be increased by 40 percent for cluster subdivisions using TDR. Furthermore, in the Village Residential-1 District, the maximum density can be doubled for cluster subdivisions using TDR.

Buckingham Township’s original TDR program was analyzed in a study prepared by Robert E. Coughlin in 1981. Coughlin found that 19 rights had been transferred, representing a preservation of 38 acres of land, within three years of the adoption of the ordinance in 1975. Ordinarily this would be considered a very good start. However, Coughlin observed that the first 12 rights were sold by the president of the community organization that spearheaded the agland preservation campaign.

When he prepared his 1981 study, Coughlin concluded that the Buckingham program was hampered primarily by the fact that people wanted larger lots rather than higher density development. In the 1970s, 19 transferred rights were used to build townhouses. In 1979, these were the only townhouses in the township and they sold slowly; however, the poor marketing performance may have been caused by the project’s design and proximity to a highway as well as its density. In addition, Coughlin noted that there were no sewers in the proposed receiving areas to accommodate the transferred development.

However, despite what he considers as moderate success for TDR, Coughlin documents that the Buckingham zoning ordinance, as a whole, achieving many of its preservation goals. Between 1975 and 1980 almost 80 percent of new growth occurred in the development district and deed restrictions were placed on 108 acres of farmland, mostly as a result of clustering.

In 1978, the biennial review of the TDR program produced 13 recommendations, including: reducing base density allowed in development districts; increasing the size of the development district (to improve demand for development rights); investigating ways to provide sewerage to the development district; and exploring a bond issue to finance the purchase of development rights.

As discussed above, the original TDR program, adopted in the 1970s, was constrained by an overabundance of development rights in sending areas and a scarcity of infrastructure in receiving areas. Nevertheless, approximately 20 development rights were transferred in the 19 years in which the original TDR program was in effect.

The revised TDR ordinance of 1994 is designed to reduce the number of rights available for transfer; by reducing the supply, the price per TDR should rise, making it more attractive for sending site owners to sell these rights. On the receiving sites, the provision of infrastructure should likewise make the purchase of development rights more attractive to developers. In addition, Pennsylvania’s purchase of development rights program has made farmers feel more comfortable about treating development rights as a marketable commodity.

According to Raymond Stepnoski, Chairman of the Board of Supervisors, two development plans using 100 TDRs were shown to the Township in the year following the 1994 code revisions. According to Lynn Froelich, Planning Consultant to the Township, one of the receiving site projects being considered by the Township in May 1996 was in the Village of Furlong at the western side of the Township.

In 1977, the Town adopted a zoning code which featured three zoning districts, (conservation, agricultural and agricultural overlay), designed to preserve rural land uses and reduce leap frog development. The land within these three zones represents almost half of the total acreage in the town. Within these zoning districts, development is permitted but at a density of one unit per four acres. However, property owners can transfer the right to develop from land in these preservation zones to land in three residential zones, ( rural residential, suburban residential and hamlet residential), which can accommodate additional development. Land in these three receiving zoning districts constitutes roughly half of the total area of the Town.

Eden refers to the program described above as optional TDRs. In 1990, Eden became even more proactive and added a mandatory TDR component to its zoning code. Under this program, owners of property in the three residential zoning districts which constitute the receiving area for the optional TDR program had to acquire one transferred development right for each dwelling just to achieve the base density allowed by the zoning district.

As described below, under Program Status, the Town removed the mandatory code provisions in 1995 and returned to the initial voluntary program.

The code section dealing with TDR provides four specific objectives:

The potential sending sites are properties zoned Conservation, Agricultural and Agricultural Preservation Overlay. The Conservation zone, which flanks Eighteen Mile Creek, and the Agricultural zone allow only agriculture, outdoor recreation and one single family dwelling per lot. The minimum lot sizes are five acres in the Conservation zone and four acres in the Agricultural zone. The Agricultural Preservation Overlay (APO) protects a four-square mile area called Eden Valley. In the APO, the only residential uses permitted as a matter of right are farm residences on a lot of at least 30 acres. However, the Town Board can allow non-farm residences in the APO zone at a density of one unit per four acres through a special permit process in which the Town Board can require the applicant to pay all costs associated with the impact of the proposed development on public services.

To encourage the owners of property in these three sending zones to permanently preserve their land, Eden’s TDR provisions allow transfers to occur at the rate of one TDR per three acres of land in the Conservation zone, one TDR per two acres of land in the Agricultural zone and one TDR per acre in the APO zone. Since the by right density in the APO is one unit per 30 acres, the transfer ratio for this zone is 30 to 1, one of the highest transfer ratios of any TDR program in the country.

To make TDRs available for transfer, a sending site owner must execute and record an open space easement which allows the property to only be used for farming, conservation or uses which existed prior to the recording of the easement.

The potential receiving sites are areas zoned Rural Residential (RR), Suburban Residential (SR) and Hamlet Residential (HR). The owners of land in these zones can use TDR by applying for an Optional Density Permit. Along with the Optional Density Permit application, the applicant must provide a document which grants an open space easement on sending site land to the Town. After the easement is recorded, the Town Planning Board must issue an Optional Density Permit; the Planning Board has no discretion to deny the application if the open space easement is properly recorded.

With an Optional Density Permit, the receiving site is assigned a higher permitted density than the density allowed when TDR is not involved. In the RR, SR and HR zones, the base density varies depending on whether or not the lot has sewer and water, water without sewer, sewer without water or no sewer or water. In the RR zone, these base densities range from one unit per 30,000 square feet to one unit per 88,000 square feet of land. With an Optional Density Permit, the minimum lot sizes range from 20,000 to 66,000 square feet representing a density increase of from 50 percent to 33 percent. An Optional Density Permit allows comparable single-family residential density increases in the SR and HR zones. In addition, since the HR zone allows multiple family residential, Optional Density Permits can be used to increase allowable densities by 25 percent for apartment buildings in that zone.

As discussed above, in 1990, Eden adopted an additional mandatory TDR ordinance. Under this program, to build at the base (non-TDR) densities set forth in the RR, SR and HR zones, developers were required to provide one TDR for each proposed dwelling unit. Furthermore, to achieve the densities allowed with an Optional Density Permit, developers were to provide one additional TDR for each proposed dwelling unit. As explained below, these mandatory transfer requirements have since been removed from the code.

Eden’s TDR program has many key success factors. Sending site owners, particularly those in the Agricultural Preservation Overlay (APO) zone, have an incentive to sell their development rights rather than use them on site; in fact the 30 to 1 transfer ratio in the APO is one of the most attractive in the country. On the other end, the receiving site owners can increase density up to 50 percent by acquiring development rights using an approval process that is not discretionary.

Despite these promising attributes, the Eden TDR program has only been used a half dozen times since 1977. The receiving site projects varied in scale. In one case, a property owner purchased one development right in order to create two buildable lots out of one parcel. In another instance, development rights transferred from land in the conservation zone were used to allow a senior citizen development. In some of these cases, advocates of preservation used TDR to demonstrate its benefits and encourage other property owners to try it.

According to former Town Supervisor Suzanne Bissonette, the current lack of development pressure in Eden reduces interest in TDR. Furthermore, many of those who move to Eden are looking for rural lifestyles and lower-density properties. In fact, it is not uncommon for newcomers to combine two or three lots in order to create an estate-sized property. Since these people want the larger lots allowed as a matter of right, they have no incentive to purchase TDRs.

With this lack of demand for higher-density development, Eden adopted a mandatory transfer program in 1990. Under this ordinance, developers of property in the Rural Residential, Suburban Residential and Hamlet Residential districts had to acquire one development right for each housing unit just to achieve the base density of the zoning designation.

In 1994, former Eden Town Supervisor, Suzanne Bissonette, asked for an opinion regarding the legality of the mandatory TDR program. One attorney concluded that the mandatory TDR program could result in a taking because the owner of a property in an RR, SR or HR zone would not be allowed to build a dwelling unit without acquiring a TDR regardless of whether or not there are any rights available to be acquired. The problem might be reduced if a TDR bank were available to assure that development rights were readily available for acquisition. However, Eden does not have a TDR bank as part of its program. Based on this legal opinion, Eden removed the mandatory transfer provisions from its code in 1995.

Bill Feasley, who was a member of the Eden Town Council for 22 years, agrees with former Supervisor Bissonette that the lack of transfer activity is primarily the result of low demand for higher-density development. He notes that the Town encouraged compact development by creating a sewer district; but people moving out of cities and into rural settings want large lots and are willing to pay for them.

Furthermore, the value of land for its development potential has increased over time while the value of land for agricultural purposes has remained flat. This is even true in the extremely fertile Eden Valley, which is a productive area for high-value, vegetable crops. Consequently, farmers are not as interested in selling development rights as they might have been in the past. Feasley estimates that, at one time, prime agricultural land in Eden was worth $15,000 per acre as farmland while housing sites were selling for $3,000 per lot. The relationship has now changed; prime agricultural land is still valued at $15,000 per acre but buildable lots are selling for $15,000 to $20,000.

Feasley believes the program would be more effective if the Town acted as a bank, buying development rights from sellers and selling them to receiving site developers. By buying development rights, the Town could overcome the logistical problems encountered when TDR sellers try to find buyers and, conversely, when buyers try to find sellers. Fealsey also would like the Town to raise the money to start a purchase of development rights program. Neither idea has found acceptance yet, but Feasley believes that the Town is still committed to the goal of agricultural preservation.

In the Springhill Zoning District, created in 1992, the County allows increased density in return for the permanent preservation of the majority of a parcel as open space by deed restriction. The program only applies to land within the Agricultural and Rural Residential zones. Land in these two zoning districts is allotted, by right, one development right for every 160 acres of land. However, property owners can apply for additional development rights at the rate of one right for every 80 acres through the conditional use permit (CUP) process.

A property granted additional development rights through the CUP process must use these rights on no more than 15 percent of the total original parcel area. When a total of 15 percent of the parcel is platted for development, the remaining 85 percent must be deed restricted for open space.

To encourage participation in this preservation process, the Springhill District Code also allows development rights to be transferred from one parcel to another whether they are development rights which exist as a matter of right or additional development rights created by CUP. Projects using transferred development rights must follow the same rules that apply to projects in which additional development rights are created and used on the same parcel. When a total of 15 percent of the receiving site parcel is platted for development, the remaining 85 percent of the parcel must be permanently preserved as open space through deed restriction.

It could take a considerable amount of time before the deed restriction is required. The maximum density allowed on land served by septic system is one dwelling unit per acre. To create a hypothetical example, on a 100 acre parcel, 15 lots could be created before the 15 percent of the parcel designated for development is completely subdivided. However, even though the remaining 85 percent of the parcel is not formally protected by deed restriction, no development can occur in this preservation area after CUP approval under the provisions of the zoning code.

To be approved, CUP applications for either additional development rights or transferred development rights must meet at least three of six conditions:

As in the Springhill District, the South Gallatin Zoning District, created in 1994, promotes clustering to encourage the concentration of development at higher densities on a smaller portion of a property in order to preserve the majority of the property in its natural state. Transfers of development rights may also be approved via the cluster development process. To be approved, a proposed cluster development can occur on no more than ten percent of the area included in the development plan. The remaining 90 percent of the property is permanently preserved as open space by deed restriction. In considering a cluster development application, the Zoning Commission judges the extent to which the proposal would protect wildlife habitat and scenic vistas. The Commission may deny the application if the proposed clustering would significantly impact environmental values.

The Bridger Canyon District contains a subarea designated as the Bridger Bowl Base Area; Bridger Bowl is a ski area and the County has agreed that the base area should be allowed to have a concentration of recreational housing and overnight accommodations in order to reduce traffic on the roads between the ski area and Bozeman. A concept plan for the Bridger Bowl Base Area was adopted in 1979 which originally designated the number of development rights for this subarea. In 1989, the Bridger Canyon Zoning District was adopted, which designated the number of development rights available for the area outside of the Bridger Bowl Base Area. Transfers are approved by the Bridger Canyon Planning and Zoning Commission through the Planned Unit Development Process.

In the Bridger Bowl Base Area, development rights can only be transferred within the Base Area boundaries. The most desirable portions of the Base Area are parcels closest to the ski slopes which can be served by ski-in/ski-out trails and other facilities. One property owner has been transferring development rights from throughout the Base Area to the land at the foot of the slopes. No density bonus is available to promote these transfers. The property owner merely transfers rights on a one-to-one basis in order to achieve the necessary concentration of development rights at the appropriate location.

In the remaining portion of the Bridger Canyon District, outside of the Base Area, density bonus similarly is not used to motivate transfers. Instead, the County relies on the fact that many properties in this district are undevelopable or only marginally developable. The owners of sending sites are expected to turn to TDR because environmental regulations, development costs and locational preferences make it more economically feasible and/or desirable to build on a receiving site rather than the sending site. For example, the owners of a property located miles from the nearest paved road may seek to transfer their development rights to a less isolated location rather than spend thousands of dollars on access improvements or live at the end of an unpaved road.

In the Springhill Zoning District, agriculture is still the primary activity. The area experiences a very slow rate of growth, with only about four new units constructed in the two years since the zoning ordinance was adopted. Because of the newness of the TDR program and the slow rate of growth, it is not surprising that no transfers have occurred since TDR was introduced in 1992.

The South Gallatin District is also a slow-growth area. No new construction occurred there in 1994, the year that the zoning code and TDR program for this district were adopted.

Development activity is only slightly higher in the Bridger Canyon District. Outside of the Bridger Bowl Base Area, only one or two PUDs are typically approved every year. Since the Bridger Canyon TDR program was adopted in 1989, approximately six transfers have been approved. In most instances, these six transfers involved owners wanting a more accessible location for an individual homesite.

Within the Bridger Bowl Base Area, one property owner has been steadily transferring development rights for years in order to concentrate density at the base of the ski slopes. According to Randy Johnson of the Gallatin County Planning Department, this property owner has not as yet used all of the development rights that were transferred. Additionally, this property owner may not request any more transfers since there are practical limits to the density which can be accommodated at the foot of the ski slopes due to water and other infrastructure constraints.

In 1988, the Town adopted major revisions to its zoning code. Although the original TDR provisions remained largely intact, Groton added a development rate limit provision to the code. Receiving site developers can now choose between two incentives for using TDR: the original 25 percent density bonus or the ability to exceed the annual building permit quota. Since that change, TDR has been used extensively.

The TDR process is only available for use in Groton’s Residential-Agricultural (R-A) zoning district. However, the R-A district accounts for roughly 90 percent of the Town’s land area. Owners of land in the R-A district can choose to develop under the traditional R-A regulations, which allow development at a density of one lot per 80,000 square feet of land area. Alternatively, landowners and developers can elect to apply for a special use permit under the Town’s Open Space Residential Development provisions.

The Open Space Residential Development code section is designed to achieve several purposes including the following: preserve open land for its scenic beauty; enhance agricultural, open space, forestry and recreational uses; protect the natural environment; perpetuate the appearance of Groton’s traditional New England landscape; and promote the development of affordable housing. Under this code section, developers can apply for reduced development requirements using either clustering or flexible development provisions. Prior to 1988, the clustering alternative did not involve TDR. Conversely TDR was, and is, allowed under the flexible development option discussed below.

Using the flexible development provisions, a developer can apply for reduced development requirements with or without using TDR. For example, this code section allows reductions in requirements for lot area, frontage and setbacks in return for the preservation of 25 percent of a development site as open space and the provision of an affordable housing unit for every ten market-rate units or payment of an in-lieu affordable housing fee. In addition, the density of a receiving site project can be increased by 25 percent through TDR using the "incentive lots" described below.

An incentive lot can be created by deed restricting 80,000 square feet of land in the R-A zone. Since the baseline density in the R-A zone is also one lot per 80,000 square feet, the program offers a one-to-one transfer ratio. The Planning Board must determine that a proposed sending site should remain undeveloped due to its significance for environmental, scenic, agricultural, open space or water supply purposes. However, wetlands cannot qualify as sending sites.

Prior to 1988, TDRs could only be used in receiving site projects in the R-A zone which follow the flexible development section of the code. To be awarded additional density through TDR, the Planning Board must determine that a proposed receiving site would not qualify as a sending site; in other words, it cannot have environmental, scenic, agricultural, open space or water-supply significance. The decision of the Planning Board is made after a public hearing and is final.

As stated in the Background section, in 1988, Groton added a Development Rate Limitation provision to its zoning code. Under this code section, building permits can only be issued if less than 120 dwelling units have been permitted in the last 24 months for the entire Town. Alternately, building permits can be issued if fewer than 12 units have been permitted in a single subdivision in the last 24 months. However, as an incentive to deed restrict sending sites, development rights can be used to build an extra six dwelling units per year in addition to the six units allowed under the development rate limits. In other words, a developer can double the number of units permitted per subdivision each year by using the development rights created by deed-restricting 80,000 square feet of sending site land.

Receiving site developers cannot use the same TDRs to both accelerate the pace of development and increase density on a receiving site; developers must chose to either use these development rights to build more units per year or increase density. TDRs can be used to accelerate development on receiving sites approved under the clustering as well as the flexible development provisions of the Open Space Residential Development zoning code section.

Finally, the Town allows sending site owners to deed restrict their land and sell the resulting TDRs at any time. Developers may buy these rights and hold them or resell them as well as use them immediately on receiving sites.

Groton received no applications for TDR from 1980 to 1988, when the only incentive was a 25 percent increase in density for receiving site projects that use TDR. As reported by Michelle Collette, Planning Assistant for the Town, developers were reluctant to request special use permits knowing that adjacent property owners were likely to appear at the public hearing to protest the proposed density increase.

However, TDR has been very popular since the 1988 code change that allows developers to double the number of units they can build per year by using TDR. Ms. Collette estimates that from 50 to 100 sending site lots have been permanently deed restricted since 1988. All of these transfers have been used to accelerate the pace of development rather than increase density at receiving sites. Groton is going through a period of rapid development; since the Town generally reaches its overall limit of 60 units per year, TDR is the only way that developers can build more than six dwellings per subdivision annually. Because the demand for new development is high, TDRs are now used in every subdivision in the Town with more than six undeveloped lots. These transfers have preserved a few hundred acres of land including farmland, properties important to the Town’s water supply and a greenway along the Nashua River.

In the 1970s, Hillsborough Township was looking for a way to preserve environmentally-sensitive areas and land for schools and parks as well as farms. Consequently, in 1975, the Township revised its zoning ordinance, creating lower density zoning districts at the periphery of the Township. The owner of a parcel constrained by the density limits, sued the Township for approval of a proposal to transfer development rights from that parcel to another parcel owned by the same developer. In response, the Township adopted a transfer of development rights ordinance in 1975. However, the Township immediately became concerned about the legal and logistical considerations regarding ownership of the preservation parcels which would be deeded to the Township through this process. Consequently, the ordinance was revised in 1976. The TDR ordinance was amended again in 1981.

The current version of the ordinance states that the transfer of development credit provisions are designed to provide flexibility, preserve agricultural land, protect environmentally sensitive land and help reduce the cost of providing roads, utilities and services to residential development. Specifically, the ordinance is intended to allow some economic benefit for keeping environmentally-sensitive lands undeveloped. To implement those goals, Hillsborough allows the owners of land in four zoning districts to increase density above the baseline zoning in return for dedicating land to the Township for schools, open space or other public uses.

The sending sites, or lands to be deeded to the Township, must be at least 25 acres in size and located in the R1, CR, TC or PD residential zoning districts. The transferable development credits are simply the number of units which could be built on the sending site under the applicable baseline zoning. Technically, the transfer ratio is one-to-one. However, Hillsborough does allow transferable credits to be created for half the acreage of the sending site occupied by easements or environmental constraints, such as slopes, surface water and flood plains. In this way, the Township provides landowners with an opportunity to gain some economic return from land restricted from development by environmental conditions and other constraints.

When the receiving site development is approved, the property owner must deed the sending site to the Township with restrictions limiting its future use to open space, school sites and other municipal or quasi-public activities. Before accepting the sending sites, the Planning Board and Township Committee must ensure that ten standards are met regarding the appropriateness of the proposed acquisition.

The Township also establishes the number of development credits available at the sending site. Concurrently, the Planning Board renders a decision on the PUD (planned unit development) or major subdivision which uses the transferred credits. All development credits created by the conveyance of the sending site to the Township must be used by the receiving site project or be forfeited. The Planning Board may impose reasonable conditions on the sending site conveyance, such as the provision of access or utilities to the site.

The Township reserves the right to undedicate the sending site in the event that four conditions occur.

The receiving sites, like the sending sites, can be any properties in the R1, CR, TC and PD residential zones. In the R1 zone, the use of TDC can increase density from a maximum of 1.5 units per acre to 2 units per acre for detached single-family residential units, a density bonus of 33 percent. The code does not specify maximum densities for other housing types. In the CR zone, the zoning code limits by-right density to two detached single-family units per acre while allowing three detached single-family units for projects using TDCs, a 50 percent increase. In the TC zone, the by-right density is four detached single family units per acre compared with five when TDCs are used, a 25 percent density bonus. In the PD zone, eight detached single-family units are allowed as a matter of right; the code does not specify a maximum density for projects using TDCs in the PD zone.

The developer who prompted adoption of the TDR provisions by suing the Township was delayed by the 1976 code revisions and never used Hillsborough’s TDR provisions. According to Mr Coughlin, in 1978, another developer with land in a development zone purchased a farm in a preservation district. By purchasing the farm, the developer obtained 30 development rights at a cost of about $3,000 each. Due to the higher cost of land, development rights on the parcel in the development zone cost about $4,000 each. The Township approved a development on the receiving site with 30 more dwelling units than the maximum allowed by the base zoning. The sending site was preserved by deeding it to the Township. When Coughlin prepared his study, the Township was considering leasing the 70-acre sending site to farmers. In addition to preserving farmland, the sending site also provided an open space buffer for a Girl Scout camp adjacent to the protected parcel.

When Coughlin performed his study in 1980, he found mixed reactions to the TDR program. The Township planning director was satisfied with the program because it was easy to understand and manage. But a former Planning Board chairman was concerned that transfers could create a patchwork quilt of publicly owned land which might or might not lend itself to agriculture on a long-term basis; he argued that agricultural preservation requires mandatory preservation of farmland. By 1980, Coughlin had found that the Township was much more interested in farmland preservation than in 1975; in 1980, infrastructure planning was being geared to steer future development away from agricultural areas and toward development zones. However, some residents questioned whether it was prudent to attempt to preserve farmland given the intense growth pressures applied by expansion of the New York-New Jersey metropolitan area.

More recently, the Township’s Planning Department reports that the ordinance has been used periodically and that the Township has acquired sending sites using this procedure.

Hopewell is primarily rural, with a mixture of farms, orchards and wooded areas. Most of the Township’s Residential and Commercial zoning surrounds Stewartstown, population 1,300, an incorporated city in the center of the Township. However, Residential, Commercial and Industrial zoning also flanks Interstate 83 which touches the northwest corner of the Township. The remainder of the Township, approximately 15 square miles, is zoned Agricultural with the exception of a two-square mile Conservation zone along Deer Creek in the southwestern corner of the Township.

In the Hopewell program, any parcel of land zoned Agricultural can potentially be a sending or a receiving site. In the Agricultural zone, residences are permitted only by conditional use permit. Even by conditional use permit, the maximum number of units is limited by two schedules. In one schedule, residential units are allocated based on the size of the tract in existence when the ordinance was adopted in 1974. This formula allows higher densities to smaller tracts: for example, a six-acre tract could be permitted one unit per two acres; but a tract greater than 830 acres would only be allowed one unit per 40 acres. In the second schedule, additional single-family residential units are allocated according to a different formula in which permitted density also decreases with increasing tract size: for example, an 11-acre tract would be allowed one unit per five acres while a 805-acre tract would only be permitted one unit per 42 acres.

In addition to these acreage requirements, residential units are only permitted on land of low quality for agricultural use or the poorest agricultural land on the tract. Land is considered to be of low agricultural quality if it has a soil capability rating of less than III in the York County Soil Survey or if farming is not feasible due to physical constraints, such as rock outcroppings, steep slopes, wetlands or woodlands, or because the size or shape of the property does not allow for efficient use of farm machinery. To provide advice in making these determinations, the Township created an Agricultural Review Committee composed of one Township Supervisor, one township farmer and the Zoning Officer.

In order to provide flexibility, when two or more parcels are in common ownership, development rights can be transferred from one parcel to another as long as the residential development is located on land of low agricultural quality and as long as the transfer would not have an adverse effect on adjacent farms. Transfers are only available to parcels of land zoned Agricultural. These transfers are approved through the conditional use permit process. The transfer is documented either through a recordable agreement with the Township or through the approval of a subdivision plan for the sending site parcel showing that the development rights have been transferred.

The Hopewell TDR program is designed to give landowners in the Agricultural zone the ability to earn some return on the development potential of their land while still achieving the goal of preserving quality agricultural land. Any parcel in the Agricultural zone could potentially become either a sending or receiving site depending on its suitability for agricultural uses. The program offers a one-to-one transfer ratio; the amount of development rights available for transfer equals the number of dwelling units precluded from development at the sending site.

Gilbert G. Malone, of the Law Offices of Malone & Neubaum in York, Pennsylvania, advises several townships in York County on land use matters. According to Mr Malone, the Hopewell TDR program has generated one transfer to date.

At the same time, the County adopted a TDR program to compensate property owners for this downzoning, which cut maximum allowable densities by up to one eighth of their prior limits. For example, some properties which had been zoned at a density of one dwelling unit per 2.5 acres were rezoned to a density of one dwelling unit per 20 acres. In addition, the TDR program was designed to discourage the County Planning Commission from granting exceptions to the new zoning regulations based on the economic hardships caused by this downzoning.

In the Island County program, sending sites are lands classified as Agriculture, Forest Management, wetlands, tributary streams and their associated buffers. Owners of land in these sending areas can apply for certificates of development rights at the rate of one TDR per gross acre of sending site.

This transfer rate is significantly higher than the density allowed for development on the sending site. The Agriculture and Forest Management zones, for example, allow on-site development at a maximum density of one dwelling per 20 acres; this transfer ratio of 20:1 is one of the highest in the nation, creating a significant motivation for sending site owners to transfer rather than build in this zone. The number of TDRs available for transfer is reduced to reflect existing homes and buildable lots on the sending site as well as any TDRs previously transferred.

In Island County, potential receiving sites consist of land classified Residential, Rural Residential, Agriculture and Forest Management. (The County also had two proposed zones in mind as potential receiving sites but these proposed zones were never ultimately created.)

The Board also determines the number of development rights which can be transferred onto the receiving sites. The receiving site zoning allows higher maximum densities to projects using transferred development rights. In the Agriculture and Forest Management zones, the maximum density is one dwelling unit per 20 acres; but when land parcels in these zones are proposed for projects using TDR, the maximum allowable density doubles to an average of one unit per ten acres, a 100 percent bonus. Similarly, the Rural Residential zone has a base density of one unit per five acres; however, TDR receiving sites of 20 acres or more can be allowed up to an average of one unit per acre and sites of 100 acres or more can receive up to an average of six units per acre, a bonus of 2,900 percent! In the Residential zone, the base density of 3.5 dwelling units per acre can be increased to as much as an average of six dwelling units per acre for TDR receiving sites, a 71 percent increase.

When development rights are initially severed, they cannot be transferred or sold until a conservation easement permanently preserving the sending site is executed and recorded. Furthermore, a deed of development rights must be executed and recorded. Once these conditions have been met, development rights can be sold or transferred to anyone regardless of whether or not the purchaser is the owner of a receiving site; in fact, purchasers do not need to own property at all but may simply be the owners of the development rights alone.

Island County anticipated requests for receiving site designations within a proposed Zone of Influence and proposed Urban Business Centers. However the Zone of Influence and the Urban Business Centers were never adopted. Consequently, the TDR program had to be implemented entirely through Planned Residential Developments (PRD). PRD applications involving TDR are subject to hearings before the Planning Commission; the Commission recommendation on the PRD is forwarded to the County Board for determination. During the PRD process, the Planning Commission and the County Board determine, on a site-specific basis, the amount of additional development which will be allowed on the receiving site as a result of transferred rights.

Also, as explained by Dwain Colby, Island County Commissioner, developers are often not interested in gaining the additional density offered through TDR; consequently the demand for transferred development rights is currently low. In addition, the receiving areas sometimes lack the infrastructure to accommodate a higher density of development than that allowed by the base zoning. For example, without sewer service, the density is limited to 3.5 units per acre despite any density bonuses that might be available due to transferred development rights.

Nevertheless, the Island County program has several factors found in the most successful TDR programs. The sending site owners are encouraged to sell their development rights by a transfer ratio of up to 20:1. The receiving site owners also can significantly increase the density of their projects by using transferred development rights. In fact, in some cases the TDR bonus yields a 2,900 percent increase in density, the highest increase of any TDR program included in this book. Due to these factors, 149 development rights have been certified so far under the Island County TDR program and 87.74 acres of land have been protected by conservation easements. According to Joyce Ryan, Island County’s Planning Manager, 18 TDRs have been used to date in three planned residential developments. An additional 28 dwelling units have been authorized on receiving sites.

The Island County TDR program is currently being reviewed in conjunction with the Comprehensive Plan revision required by the State of Washington’s Growth Management Act.

The TDR section of the Manheim Township Zoning Ordinance is designed to preserve prime agricultural soils and the agricultural character of the land by shifting development from sending areas to receiving areas. The Agricultural District is established as the sending area and the R-1 and R-2 Residential Districts are established as the receiving areas. In addition to preserving agriculture on the sending sites, Manheim Township wants to improve the quality of development on the receiving sites by promoting innovative design techniques.

Manheim Township refers to development rights as a separate estate in land which may be transferred immediately to a receiving site or held by a purchaser for future use or sale. The price of the development rights is determined by willing buyers and sellers. The Township itself can purchase development rights and accept rights as gifts; these development rights may be retired or sold by the Township. When development rights have been severed, a deed restriction is placed on the sending site allowing only agricultural uses. This deed restriction, called a Declaration of Restriction, designates the Township as a third party beneficiary.

When development rights are transferred to receiving sites in the R-1 and R-2 zones, the code permits the density of the receiving site to increase beyond the density allowed by the underlying zoning. In addition, some portions of the R-1 and R-2 zones have been designated as Density Bonus Overlay areas; within these areas, projects which incorporate transferred development rights are allowed a substantial increase in density. Specifically, in one zone, a base density of 1.6 units per acre can be increased to 2.2 units per acre through TDR and to 2.9 units per acre in the areas designated for bonus density. In the other receiving zone, the base density of 2.0 units per acre can be increased to 2.9 units per acre by TDR and to 4.3 units per acre in bonus density areas, a density bonus of 115 percent. When transferring to the bonus density areas, development must use clustering techniques and preserve at least 30 percent of the receiving site in open space.

The TDR section of the Manheim Zoning Ordinance states that landowners, developers or holders of development rights will have no damage claims should the Township decide to abolish or change the program in any number of ways. The section also requires the zoning officer to determine the number of development rights which can be severed based on various criteria. For example, sending sites must be at least ten acres in size. Furthermore, land used for non-agricultural purposes or already precluded from development by easements is not eligible for transfer of development rights. The amount of land determined to be eligible by these criteria is multiplied by 0.73 to calculate the number of development rights available for transfer.

To determine the base density of the property to be developed, the applicant must submit a preliminary subdivision plan prepared in compliance with the Manheim Subdivision/Land Development Ordinance. When development rights are severed from the sending site, they are conveyed by means of a Deed of Transferable Development Rights. The Deed of Transferable Development Rights is accompanied by a Declaration of Restriction of Development. One additional dwelling unit may be built on a receiving site for each development right transferred from a sending site. The transfer is approved through the Town’s subdivision/land development approval process.

To encourage innovative design on receiving sites, Manheim Township allows modifications of certain development requirements through the conditional use permit process. The innovations listed in the code include off-center home placement, zero lot line dwellings, patio homes and other housing types. Five special standards are used to evaluate these CUPs.

The Manheim Township program has the ingredients to motivate transfers. Owners of sending sites can only achieve a density of one unit per 20 acres on site; conversely, those owners can transfer development rights to receiving sites at a density of 0.73 units per acre, representing a substantial transfer ratio of 14.6:1. Similarly, receiving site owners are motivated to buy development rights by the ability to more than double base zoning density in some areas. In addition, the ability to sell, buy and hold development rights increases flexibility for landowners and developers.

According to Jeffrey Butler, Manheim Township’s Director of Planning, 124 development rights have been severed to date, preserving approximately 170 acres. Most of these severed rights were purchased by the Township itself using general fund money and contributions from developers. The Township is creating a revolving fund with money provided by TDR sales. So far, the Town has solicited bids for the purchase of these rights. To date, one developer has bid on purchasing about 40 rights. So far, no receiving site developments using transferred development rights have been approved, but the Township is currently processing a development proposal that uses 40 development rights.

This is a respectable track record considering that the ordinance is only five years old. In addition, the Township had an unused inventory of about 2000 approved lots when the program was adopted in 1991. Builders used these approved lots and the rate of subdivisions was consequently slow in the early 1990s. It is anticipated that the use of TDR will rise right along with increased applications for subdivisions which is inevitable as the current stock of approved lots dwindles.

Mr Butler has observed that some sending site owners may be expecting too high of a selling price for their TDRs; in some cases the asking price for a development right is comparable to the price of a fully-approved lot. These unrealistic expectations will probably change as more transfers occur and an accepted market rate price for TDRs begins to emerge.

As a final note, Mr Butler reports that Manheim Township is currently updating its general plan and considering the use of TDR in commercial and industrial districts.

Nicasio Valley, an agricultural area in the center of the County, was the subject of a community plan adopted in 1979. The Nicasio Valley Community Plan discussed using clustered development as a means of preserving portions of farms for agricultural purposes. However the plan concluded that TDR was preferable to clustered development as a means of preserving agriculture because TDR is capable of locating development where it belongs within the entire community regardless of property ownership patterns. Consequently, the plan recommended that TDR be studied as a possible means of preserving agriculture and protecting water quality.

In 1981, the Marin County Board of Supervisors agreed that TDR could be effective in protecting agricultural land. As a result, TDR was added as an implementation measure to the Marin County wide Plan, the Nicasio Valley Community Plan and the Agricultural-Residential Planned District of the Marin County Zoning Ordinance.

Marin County’s Agricultural-Residential Planned (A-RP) zoning district allows flexibility for the inclusion of residential development in agricultural areas. Specifically, this zone allows development rights to be transferred from productive agricultural land and environmentally-sensitive areas to locations where impacts would be minimized. The TDR provisions are only available in areas where a community plan or County wide plan has identified TDR as an implementation measure. To date, the Nicasio Valley Community Plan is the only community plan in Marin County that recommends TDR and, consequently, TDR can only be used within Nicasio Valley at this time.

Under the A-RP zone, sending sites are not pre-designated. Developers propose sending sites through the master plan process. In the master plan process, the applicant must demonstrate that the sending site should be preserved and that the proposed receiving site can accommodate the transferred development. In addition, the applicant must outline how the proposed TDR will implement the conservation criteria set forth in the applicable community or County wide plan. The criteria from in the Nicasio Valley Community Plan for sending areas include the following: property with steep slopes; property near streams or the Nicasio Reservoir; wooded property; property with prime agricultural soils; property needed for the continuation of agricultural activities; and properties on which development would be highly visible. When transfers are approved, restrictions against future development are secured through conservation easements recorded against the sending sites.

The master plan approval process allows bonus density to be awarded to the receiving site in addition to the density allowed by the base zoning plus the density transferred to the site. Receiving sites must be evaluated under the criteria established in the applicable community plan. The Nicasio Valley Community Plan contains the following criteria for judging the suitability of a proposed receiving site: the property should have the infrastructure and support services needed to accommodate the proposed development; the traffic generated by the proposed development should not significantly impact agricultural activities; the proposed receiving site should be large enough to accommodate the increased density; the site should not create landslide hazards; and the proposed site should not affect unique environmental resources.

The Marin County TDR program benefits from purchase of development rights programs which have been active in the County for many years. For example, the Marin Agricultural Land Trust alone has protected over 22,000 acres of farmland by acquiring conservation easements. As a result, the concept of severing development rights is familiar to County property owners and the value of these rights is well established. The Marin County program also benefits from the fact that it is difficult to obtain additional density on receiving sites without using TDR unless affordable housing bonuses are used.

Even though the demand for new development in Marin County is high, the pace of development is relatively slow, about 0.3 percent per year; this may be due to the fact that prime sites have already been developed, leaving parcels with steep slopes and other development difficulties. According to County Planning Director Mark Riesenfeld, this slow growth rate partly explains why only one TDR project has been approved in Marin County since the TDR concept was introduced in the late 1970s.

In Marin County’s only approved TDR project, the sending site was a ranch located about a mile outside the village of Nicasio. The owner of this ranch also owned the receiving site: a 120-acre parcel immediately adjacent to the village of Nicasio. The sending site was deed restricted for agricultural uses. The 120-acre receiving site was granted development rights for two dwelling units by the underlying zoning. Ten more dwelling units were transferred in from the sending site and an additional five dwelling units were awarded as a transfer bonus, bringing the receiving site total to 17 units. This project is considered a success because it transferred development which could have occurred in the countryside to a location adjacent to an existing village. However, the one-dwelling-unit-per-seven-acre density of the approved development is a significant density reduction from the compact development pattern of the adjacent village.

In 1989, the County adopted a new Comprehensive Plan which required the development of a Transfer of Development Rights Program to implement at least five Plan objectives:

In 1993, the County adopted a new TDR program designed to preserve native ecosystems, rural residential areas and other environmentally-sensitive lands.

The Palm Beach County Planning Division identified numerous factors to explain why the first TDR program, adopted in 1980, only produced one transfer in ten years:

The 1989 Comprehensive Plan addressed some of the factors which reduced the effectiveness of the 1980 TDR program. For example, the 1989 Plan decreased the highest density zone in the County to eight units per acre. As mentioned above, the 1989 Plan also called for the development of TDR programs to achieve five different preservation goals including the protection of environmentally-sensitive areas. In response, the County adopted an Interim Transfer of Development Rights Program which became effective in 1993. In addition to protecting environmentally-sensitive lands, the new Palm Beach County TDR program is intended to compensate the owners of these lands through the purchase of development rights by developers wanting to increase densities at appropriate receiving sites.

Under the Palm Beach County TDR program, there are three types of land eligible as sending areas:

The transfer rates differ depending on the designation of the sending site. In the RR-20 classification, one development right per five acres can be transferred; since the density permitted for on-site development is one unit per 20 acres, this represents a transfer ratio of four to one. Development rights may be transferred from Native Ecosystem "A" sites outside of the Urban Service Area at a rate of one development right per five acres; since property owners are limited to either one dwelling per 10 acres or one unit per 20 acres west of the Urban Service Area boundary, the transfer ratio bonus ranges from two-to-one to four-to-one. For Native Ecosystem "A" sites inside the Urban Service Area as well as sites designated for preservation by the County Board, development rights can be transferred at a rate equal to the density allowed by the future land use designation for those sites. Potential sending areas are also subject to environmental constraints which make it difficult to achieve the density stated in the zoning code; consequently, sending site owners often have a greater motivation to transfer than simply the bonus density generated by the transfer ratio.

To facilitate transfers, the Palm Beach County Code created a TDR Bank to hold development rights purchased by the County using bond issue proceeds and other County funds. The County sells these rights to the developers of eligible receiving sites at a price determined by one of three methods: current market value; the value recommended by the Land Use Advisory Board and the Planning Division; or, the price received at a development rights auction. The revenue generated by the sale of development rights is earmarked for the Natural Areas Fund, which is used to acquire and manage environmentally-sensitive areas.

The Palm Beach County TDR program does not pre-designated receiving sites. Instead, property owners request designations using one of two processes. Owners may apply for Planned Developments which would increase density above the density permitted by the future land use designation if the proposed receiving area is within the Urban Service Area and meets all code requirements. Alternatively, property owners may apply for a Traditional Neighborhood Development (TND) to exceed the density allowed by the underlying land use designation.

Receiving sites are allowed an additional two dwelling units per acre to accommodate transferred development. However, when using the Planned Development process, the maximum density is limited to eight units per acre unless a proposed project would provide affordable housing. Receiving sites cannot contain any "A" Native Ecosystem sites.

The application process begins with the sending site owner requesting a determination of the number of development rights available for transfer. Within 25 days, the County staff must verify that the site has not been altered and send the applicant a written determination of the number of available development rights. When development rights are severed from a sending site, a conservation easement must be recorded which protects the site from development in perpetuity. If a sending site owner donates environmentally-sensitive land to the County, the owner is issued Development Rights Certificates. The certificates can be sold, traded or transferred until used by a Planned Development or TND at a receiving site.

The application for the development of a receiving site must be accompanied by a contract for sale and purchase of development rights. The Land Use Advisory Board considers the application, a report from the Planning Director, support materials and testimony at a meeting. The Board must render a recommendation on the application after determining whether the density bonus proposed for the receiving area would be compatible with surrounding land uses. If the Board recommends approval, a preliminary report is prepared and the Development Review Committee makes a recommendation on the application. Then the Zoning Commission considers the application and makes its recommendation. Finally, the Board of County Commissioners approves the transfer if six findings can be made, including a finding that the proposed development is compatible with the surrounding area.

Only two applications were submitted under Palm Beach County’s first TDR program. The first application was withdrawn after the sending site owner rejected the TDR price offered by the receiving site developer. In the second application, 423 development rights were purchased for $846,000, or $2,500 per development right. As a result, a 640-acre parcel of Environmentally-Sensitive Land in an Agricultural Reserve Area was preserved. The receiving site is a 141-acre parcel developed at a density of 7.9 units per acre.

The new program, adopted in 1992, has many of the features found in some of the most successful TDR programs. An incentive to use TDR is produced by the fact that from twice to four times as many units can be transferred than can be built on sending sites. The County has also created a TDR bank. To date, the bank has acquired 6,400 development rights from the purchase of 2,321 acres of environmentally sensitive lands. As of December 1998, the County had sold 448 TDCs and approved the use of these TDCs in five separate receiving site projects.

In the early 1990s, the Town was looking for a way to save a particular 56-acre parcel for recreation by transferring development rights to a non-contiguous site. The Town considered using its existing clustering ordinance. An advisory opinion from the Attorney General of the State of New York stated that the enabling legislation for cluster subdivisions did not specifically limit density transfers to single parcels or contiguous parcels. Nevertheless, the Town waited for the passage of New York State’s Town Law 261-b which specifically granted Towns in New York State the power to use TDR. In 1993, Perinton adopted an Open Space Preservation ordinance based on Town Law 261-b and immediately used it to preserve the 56-acre recreational site.

Perinton’s Open Space Preservation ordinance allows density adjustments for the purpose of preserving natural features, preventing soil erosion and creating open space/recreational areas. Under this ordinance, sending sites are rezoned to a designation of Open Space Preservation and land use controls for that sending site are established by an approved open space preservation plan. The receiving site is also rezoned and can be granted adjustments for density, area and open space; however the density permitted on both sending and receiving sites as a result of TDR cannot exceed the total density which would be allowed to both these sites under conventional zoning.

An applicant for a rezoning to Open Space Preservation must submit two sets of concept plans. One set shows how the sending and receiving sites would be developed under baseline zoning and conventional procedures. The second set of plans shows the open space preservation proposed for the sending site and the development proposed for the receiving site incorporating the zoning code exceptions requested by the applicant.

The Town Planning Board and Conservation Board review the application and file a report and recommendations to the Town Board. Following a hearing, the Town Board may grant the rezoning if it finds that the proposal promotes community goals and will not cause significant environmental damage. In adopting the rezoning, the Town Board may attach whatever conditions it finds necessary to protect the public health, safety and welfare. After the open space preservation zoning is approved, the applicant can submit the necessary subdivision and/or site plan applications to the Planning Board.

The Perinton Open Space Preservation Ordinance has a one-to-one transfer ratio; the extra amount of development on the receiving site cannot exceed the amount of development transferred from the sending site. Nevertheless, sending site owners can still be motivated to transfer density because of sending site constraints such as lack of public utilities and facilities, access difficulties and high site improvement costs.

For example, the 56-acre parcel discussed above would have been very expensive to develop due to the steepness of the terrain and the amount of work needed to serve the site with roads, sewers and other infrastructure. The owner of that site found it more cost-effective to develop the receiving site at a higher density than attempt to develop both the sending and receiving sites at the densities allowed under conventional zoning.

The Perinton Town Board approved this transfer request as the first use of its Open Space Preservation ordinance. In the process, development rights for 76 dwelling units were transferred to a receiving site. On the receiving site, an additional 24 acres were preserved as open space. In return, the 56-acre sending site was rezoned to Open Space Preservation and deeded to the Town for use as recreational open space. Between the sending and receiving sites, a grand total of 80 acres were preserved as open space. The sending site has been linked to the Town’s public trail system; at this time, the trail system serves approximately one-third of the community.

To date, Perinton’s 1993 Open Space Preservation Ordinance has only been used by the project described above. Scott Copp, Director of Perinton’s Building Department, states that the Town is very satisfied with the results so far and reports that an adjacent town is considering a TDR program very similar to Perinton’s. He explains that the current slow pace of development reduces the interest in TDR for the moment. However, as the economy improves, developers are likely to look to Perinton’s Open Space Preservation ordinance as a way of reducing overall development costs by transferring development rights and preserving sending sites as open space.

BACKGROUND

Pitkin County, population 13,000, lies in the Elk Range of the Rocky Mountains in the center of Colorado. The City of Aspen is located in Pitkin County and the County includes several ski resorts. However most of the County’s land area remains undeveloped and lies within national forest boundaries.

In the 1980s, the County adopted a master plan which recommended a transfer of development rights program as an implementation measure; a TDR ordinance was not adopted as a result of that master plan. However, in 1993, the Pitkin County Board directed the Planning and Zoning Commission to develop new zoning regulations for the Little Annie Basin/Richmond Hill planning area, a sparsely-developed, 2,275-acre rural area. The Board further directed the Commission to address eight issues for this planning area, including reducing minimum lot size, prohibiting new roadways and minimizing the construction of driveways.

As a result of this effort, the Planning Commission recommended a new Rural/Remote (RR) zone which the County Board adopted in July of 1994. The RR zone is designed to preserve alpine and subalpine environments in areas that are not close to utilities and public services and to discourage development in areas that are subject to wildfires, slope failure and avalanches. The new zone is intended to provide land for back country recreation and lifestyles. The only use permitted as a matter of right in this zone is non-commercial recreation. However, by special review use permit, the new zone allows alternative dwellings, such as domes, yurts, tepees and treehouses, as well as commercial recreational uses. Prohibited uses and activities include the extension of utilities ( such as electricity, water, sewer and telephone), new roadways, water wells, above ground generators and septic systems.

The new RR zone also significantly reduces the allowable density, with a minimum lot size of 35 acres, a maximum building footprint of 400 square feet and a maximum floor area of 800 square feet. The code does not limit the number of building permits granted annually for dwellings that are deed-restricted to be occupied by residents "year around"; however, no more than three building permits per year can be granted for dwellings which are not deed-restricted. In addition, an existing, deed-restricted dwelling is exempt from the density requirements. Finally, to further promote preservation, the RR zone provides a transfer of development rights component allowing the transfer of single-family residential development rights.

The Pitkin County Board of Commissions has complete discretion to approve or deny requests for TDR. The potential sending sites are all parcels within the Rural/Remote zone. When transfers are approved, the sending sites are no longer eligible for development. The potential receiving sites are land parcels within the RR zone as well as land within the Aspen metro area. The metro area is the designation for a portion of the county which is close to Aspen but not within the Aspen city limits.

Transfers are approved through a special review process which requires hearings before both the Planning Commission and the Board of Commissions. The special review process is used to determine the number of rights which can be transferred to the receiving site; the transfer ratio is decided on a case-by-case basis depending on several factors including the potential difficulty of developing the sending site.

If the transferred development would create a project that does not comply with the zoning standards for the receiving site, the proposal must be deemed appropriate for rezoning. However, as explained by Planner Ellen Sassano, the County does not anticipate rezoning receiving sites in order to accommodate transferred development rights. As an incentive to use TDR, development rights which are transferred from the RR zone to the Aspen metro area are exempt from the County’s growth management competition. This can be a significant inducement to use TDR since the quota system can limit development in the metro area to as few as 24 units per year.

The new development standards imposed by the Rural/Remote zone give the owners of potential sending sites a strong motivation to use the TDR process unless they are only interested in using their land for recreation or back country dwellings. In addition, sites in the Rural Remote zone can be difficult to develop, with or without regulations, since they are often steep or environmentally-sensitive parcels which are far from roads, utilities and public services.

On the other end of the transfer, receiving site owners should be interested in TDR as a means of becoming exempt from the County’s growth management competition. In fact, the new ordinance has already generated considerable interest in the real estate community. On the other hand, the Pitkin County TDR program requires discretionary approvals which could discourage the use of transfers due to developer concerns about time delays, extra costs and uncertainty.

Almost immediately after its TDR regulations were adopted, the County approved its first application. The proposed sending site is 175 acres of very remote, subalpine land containing five mining claims. The applicant transferred the development rights from these claims and clustered them, through a rezoning, in a less remote area adjacent to an existing road where some development had already occurred.

In 1987, the County amended its zoning code and included provisions for TDR. This original program used a one-to-one transfer ratio and allowed land in the Agriculture zone to be a receiving site as well as a sending site. Receiving site projects were limited to residential developments in three zoning districts.

In 1993, the County adopted a new Comprehensive Plan. One year later, the zoning code underwent major revisions and the TDR components were amended. The sending sites remained land in the Agriculture and Countryside zoning districts. But the potential receiving sites were expanded to include land in any district except the Agriculture and Neighborhood Conservation districts; in addition, non-residential as well as residential developments can now use TDR. Standards for receiving site projects were revamped to provide incentives to use TDR. And transfer ratios were established, specifying the amount of land which must be deed-restricted in the Agriculture and Countryside districts to generate a transferable development right.

In original 1987 program, sending sites could be any parcels of land in the Agricultural or Countryside zoning districts. The number of rights available for transfer was equal to the number of units allowed by the zoning code; the sending site owner could build one unit per eight acres on site or transfer development rights at the rate of one unit per eight acres. In other words, the original program used a one-to-one transfer ratio.

When the code was changed in 1994, the potential sending sites remained parcels in the Agricultural and Countryside districts but sending sites now have to be at least 20 acres in size. Sending site owners can still build on site at a density of one unit per eight acres. For each development right used at a receiving site, four acres of land must be deed restricted as open space in the Agricultural zone; since the on-site density limit in the agricultural zone is one unit per eight acres, the transfer ratio in this zone is two-to-one. Since five acres must be restricted in the Countryside zone for each transferable development right, the transfer ratio is slightly lower for sending sites in the Countryside zone.

Under the original 1987 ordinance, potential receiving sites could be parcels of land in the Agricultural, Countryside or Suburban Estate zoning districts, subject to the following limitations.

The amendment also replaced the three receiving site limitations listed above with five new limitations on receiving site projects.

In addition to limitations, receiving site projects are assigned special development requirements. In the original 1987 code, receiving site projects were allowed special open space ratios, higher gross densities and higher net densities depending on whether the site was served by individual septic systems or common septic systems or land treatment systems.

When the code was changed in 1994, the incentives available to receiving site projects using TDR varied depending on the zoning of the receiving site. In the Estate, Suburban Estate, Suburban Residential, Urban Residential, Village Center and Countryside districts outside of Critical Areas, the following standards apply to receiving site projects using TDR.

When the receiving site is zoned either Countryside or Neighborhood Conservation and also within the Critical Area Resource Conservation Area, the development requirements for projects using TDR are less generous and 20 acres of land on the sending site must be deed-restricted for each development right transferred.

The 1994 amendment also allows the transfer of development rights for non-residential uses. Receiving site projects incorporating TDR in six zoning districts are subject to the following standards.

After development rights have been transferred, the sending site cannot be subdivided or used for any purpose other than agriculture. The ordinance allows intermediate transfers to be made from "original transferors" to transferees prior to approval of a receiving site project. However, these rights continue to be considered as part of the sending site for the purpose of assessment and taxation until they are approved for use on a receiving site and transferred to the County Commissioners.

As reported by Faith Rossing, Assistant Planner with the Queen Anne’s County Department of Planning and Zoning, the original 1987 TDR ordinance resulted in the deed-restriction of 1,509 acres of land in the Agriculture zone.

In the Countryside zone, 62 TDRs have been lifted representing a total of 746 acres under permanent deed restriction.

The County adopted a Planned Agricultural District (PAD) zoning designation in order to keep prime agricultural land in production and minimize conflicts between agricultural and non-agricultural uses. To achieve these goals, the County approved several objectives.

To achieve these goals, the PAD uses various implementation techniques including transfer of development rights.

San Mateo County’s Planned Agricultural District (PAD) includes three classifications of land in the Coastal Zone. Two of these classifications are farming-related: prime agricultural land and "lands suitable for agriculture" which are areas that are not classified as prime agricultural land but which can support some kinds of agriculture including animal grazing and forestry. Both of these classifications permit only agriculture and agricultural-related improvements as a matter of right. The third category, Other Lands, include all land that is not found in the first two classifications.

Property owners can apply for residential development in the PAD zone through a Planned Agricultural Permit. To receive a Planned Agricultural Permit, applicants must demonstrate that a proposed land division promotes the goals for the Planned Agricultural District stated above. In addition, each application must be found consistent with six general criteria, including the following: minimize encroachment on agricultural land; cluster all development; supply all non-agricultural development with on-site well water; maintain water supply for agriculture and wildlife habitat; and deed restrict the transfer of riparian rights.

Three specific criteria apply to proposed subdivisions on prime agricultural land: a parcel consisting entirely of Prime Agricultural Land cannot be subdivided; a land subdivision cannot reduce the agricultural productivity of any resulting parcel; and a subdivision cannot occur if the only building site would be on Prime Agricultural Land. In addition, 14 more special criteria apply to the conversion of agricultural land to recreational, agriculturally-related and other uses.

San Mateo County regulates density through density credits. One credit with landslide susceptibility, land with slopes of 50 percent or more and remote lands, meaning land more than one-half mile from an all-weather public road in existence prior to the initial certification of the County Local Coastal Program in 1980. One density credit per 80 acres is allocated to fault zones and lands with slopes greater than 30 percent but less than 50 percent. One density credit per 60 acres is assigned to flood hazard zones, agricultural preserves/exclusive Agricultural Districts and land with slopes greater than 15 percent but less than 30 percent. All other areas are assigned one density credit per 40 acres. If land falls into more than one category, it is assigned to the category that allows less density.

To apply for a land division, a property owner must submit a Master Land Division Plan showing how the initial parcel will be divided into agricultural and non-agricultural parcels.

Non-agricultural parcels cannot be larger than five acres. If the land division is approved, agricultural parcels must be permanently preserved for agricultural uses by granting an agricultural easement to the County.

San Mateo County allows bonus density credits to be created by the combination of contiguous parcels. A 25 percent density credit bonus is granted if all parcels in the merger are 40 acres or less in size. The bonus is ten percent if any of the parcels in the merger are greater than 40 acres.

Bonus density credits are also granted for the development of agricultural water impoundments. The amount of bonus density varies with the size of the water storage facility. A density bonus of one dwelling unit is granted for an agricultural water impoundment of at least 24.5 acre-feet of capacity. An additional density bonus of one dwelling unit is added for each additional 24.5 acre-feet of capacity.

Whether they are gained through lot consolidation or the construction of agricultural water storage facilities, bonus density credits can be transferred to approved receiving sites in the rural Coastal Zone. In approving these transfers, the Planning Commission must determine that the proposed transfer complies with the Local Coastal Program and that the transfer will not convert Prime Agricultural Land or scenic corridors. A maximum of four bonus density credits can be transferred to a receiving site. More than four credits can be transferred if the Planning Commission finds that additional density would not overburden coastal resources.

To finalize a transfer, a deed restriction must be placed on the sending parcel acknowledging that the bonus density credit has been relinquished. A covenant on the receiving parcel must also be recorded, noting that the parcel has been granted bonus density credits in addition to the density allowed by zoning.

In addition to transferring bonus density credits, the San Mateo program allows the transfer of density credits from rural Coastal Zone areas which have either Prime Agricultural Land or Prime Agricultural Land plus other land which is not developable under the Local Coastal Program. Once transfers have occurred, the sending parcels must be permanently restricted for agricultural use only through easements granted either to the County or another governmental agency. A deed restriction on the sending parcel must also record the fact that density credits have been relinquished.

Under this program option, the potential receiving sites include other Coastal Zone properties east of Highway 1 which have been determined by the Planning Commission to be suitable for transferred density under the Local Coastal Program. The Commission must also find that the density credits will not convert Prime Agricultural Land or scenic corridors. A deed restriction must be recorded to show that the receiving parcels have been granted additional density credits.

The San Mateo County program has several features found in successful TDR programs. The restrictions placed on land in the Planned Agricultural District make it difficult to subdivide prime agricultural land, giving the owners of these parcels a motivation for using the transfer process. In fact, regardless of the level of transfer activity, the County is achieving its goal of agricultural preservation through its zoning ordinance. Potential receiving parcels are controlled by the Local Coastal Plan, making approvals of increased density difficult unless the proposed increase promotes a Coastal Plan goal, such as the preservation of agricultural land.

Despite these promising features, only two density credits have been transferred since the program started in 1988. The credits were bonus credits created by the development of an agricultural water impoundment. According to Diane Regonini of the San Mateo County Planning Department, there could be several reasons for the relatively low level of transfer activity. Under the bonus density credit program, there may be a limited number of contiguous land parcels with the ability to generate a significant number of bonus density credits through lot consolidation. Similarly, there may be a limited number of farmers with the ability to finance the development of water storage facilities; under the current program, the water storage improvement must be completed before the farmer receives the bonus density credits.

As described above, density credits can also be transferred from parcels that are completely prime agricultural land. It is possible that there are relatively few parcels which meet these requirements, further reducing the potential supply of density credits. At the receiving end of the transfer, it is also possible that there are a limited number of receiving sites that comply with the transfer criteria, reducing the demand for transfers. Diane Regonini also points out that a TDR bank and additional promotion of the program could increase interest in TDR.

Under Sarasota County’s TDR ordinance, sending zones are designated as Residential Sending Zones (RSZ). For a proposed sending site to qualify for the RSZ overlay zone, the proposed RSZ overlay must be consistent with the Comprehensive Plan and the site must be one of the following:

Receiving sites are designated as Residential Receiving Zones (RRZ). The RRZ overlay allows uses permitted in the underlying residential zone plus the single-family or multiple-family residential uses needed to accommodate density transferred into the zone via TDR. The RRZ overlay cannot be applied where it would be inconsistent with the Comprehensive Plan.

The number of units which can be transferred from a sending site is based on the site’s zoning density or the number of lots already allowed through a platted subdivision. Prior to transferring these development rights, the owner of the sending site must grant a conservation easement for agriculture or open space to Sarasota County.

An application for transferring development rights is considered by the County Planning Commission following a public hearing. The County Commissioners consider the recommendations of the Planning Commission and approve or deny the application. If approved, a condition of the rezoning to the RSZ overlay stipulates the number of development rights approved for transfer. A rezoning to the RSZ overlay also results in a Transfer Permit.

After issuance of a Transfer Permit, the Clerk of the Board of County Commissioners registers the owners of the development rights and any subsequent owners to which these rights have been assigned. Severed development rights do not have to be assigned to receiving sites. Severed rights can be bought, sold and held by private individuals for later use. These transactions occur on the private market since the County does not have a TDR bank.

The owners of development rights must be allowed to use these rights in a RRZ district subject to the requirements of the RRZ district and the underlying zoning. As mentioned above, a RRZ allows additional single family homes and multiple-family dwellings with the utilization of TDR as permitted uses. However, even with transferred development rights, the residential density of the receiving site cannot exceed the residential density of the underlying zoning by more than 25 percent. And in no event can residential density exceed 13 units per acre.

The Sarasota program provides a one-to-one transfer ratio; the number of extra rights permitted on receiving sites equals the number of rights transferred from the sending sites. Instead, the program relies on owners to be motivated to sell their development rights because sending sites are often inappropriate for development due to site constraints, environmental regulations and antiquated subdivisions.

TDR has been used in six projects since 1982. In the largest transfer to date, an apartment complex was built using 52 transferred TDRs. Transfers have also been used for various senior housing facilities.

According to Olga Ronay of the Sarasota County Planning Department, major developments in the County occur on land initially zoned for agriculture. There is a large amount of agriculturally-zoned land in the County available for rezoning to residential. Developers routinely request rezonings from agriculture to residential zones.

Most developers are also satisfied with the densities allowed as a matter of right by the zoning code. Since these developers are not always interested in the 25 percent bonus achievable via TDR, they often apply for a straight-forward rezoning to residential rather than a rezoning to the RRZ overlay which would involve the added expense of acquiring development rights from a sending site.

In about 1988, the Township adopted a TDR program designed to protect quality farmland in the Agricultural Preservation District, which encompasses about 70 percent of the land area in the Township. The Agricultural Preservation District was established to protect agriculture as a viable, economic activity by generally permitting only agricultural or agricultural-related activities. This district includes areas with highly productive soils and strong agricultural activity. The regulations in this district are designed to protect rural characteristics, limit development which conflicts with agricultural activity, reduce the need for additional roads and other infrastructure and preserve land parcels capable of sustaining efficient agricultural operations.

The TDR component of Shrewsbury’s zoning ordinance is designed to provide relief to the owners of quality farmland who are unable to maximize the residential-development potential of their properties. In the Agricultural District, residential development must be located on land which is agriculturally-inferior. If an owner of property zoned Agricultural Preservation cannot achieve base-line density limits without developing quality farmland, that owner may transfer the unusable development rights to agriculturally-inferior land elsewhere in the Agricultural Preservation District. These transfers must comply with one of two sets of criteria depending on whether the sending and receiving sites are under common or separate ownership.

In the Shrewsbury program, both sending and receiving sites are parcels of land zoned Agricultural Preservation. The density for single-family residential development allowed as a matter of right in the Agricultural Preservation District declines as the size of the parcel increases. Parcels up to five acres in size are allowed one dwelling unit and parcels larger than five acres but less than 15 acres are allowed two units. At the other end of the spectrum, parcels 150 acres in size are allowed eight units with an additional unit permitted for each additional 30 acres in excess of 150 acres. This baseline density is calculated on parcels as they existed in 1976.

In the Agricultural Preservation District, dwellings can only be located on lots with soils that are less suitable for agriculture, (Classes III through VII), or land which cannot be farmed due to constraints such as rock outcroppings, woodlands or a parcel size/space that precludes the use of farm machinery. If these restrictions prevent the base-line density from being achieved, each parcel smaller than five acres is allowed at least one unit and parcels larger than five acres are permitted at least two units.

In addition to the restrictions outlined above, a lot intended for a dwelling unit can be no more than one acre in size unless there are physical land characteristics which require a larger lot. A property owner can only contest the soil classification through an engineering analysis of the soils.

The TDR provisions of the zoning ordinance allow the Shrewsbury Board of Supervisors to approve transfers of dwelling unit allocations under the following conditions if the sending and receiving sites are under common ownership.

When the proposed sending and receiving sites are not in common ownership, the conditions needed for approval are almost identical. However, in this situation the sending site cannot qualify by being classified as a "farm" as defined by the zoning code; the sending site must qualify because it is unable to use its full dwelling unit allocation due to the presence of prime agricultural land. As with a transfer between two parcels under common ownership, the proposed receiving site must be unsuitable for agriculture and cannot be located in the Township’s best agricultural areas as determined by an analysis of a one-mile radius of the proposed receiving site for soil type and amount of land in agricultural security areas.

In addition to the conditions outlined above, a sending site must retain either one existing dwelling unit or the right to construct at least one unit. Alternatively, the sending site can be permanently joined to an adjacent parcel which contains either an existing unit or the right to construct a unit. Prior to approval of the transfer, the owners of the sending and receiving sites must enter into a recordable agreement with the Township using a form approved by the Township Solicitor. Alternatively, an approved subdivision plan can also be used to document the transfer of dwelling rights from the sending site to the receiving site.

The Shrewsbury TDR ordinance offers a transfer ratio of one-to-one: the number of TDRs transferred to receiving sites can only be increased by the number of dwelling rights precluded from development at the sending site. However, sending site owners should be motivated to transfer rights by the land use restrictions imposed on these properties. For example, prime agriculture land (Classes I, II and III) cannot achieve the maximum residential-development potential available to land that is agriculturally-inferior. Consequently, to achieve the maximum density allowed by the dwelling allocation formula, the owner of land with prime agricultural soils must transfer those rights to receiving sites which have inferior soils and which are not located in the Township’s best agricultural areas.

In fact, the Shrewsbury program has been relatively successful. According to Gilbert G. Malone, an attorney who serves as the Township Solicitor for Shrewsbury and several other York County townships, from 20 to 25 dwelling rights have been transferred so far. In most cases, the receiving sites have been small lots created in woodland areas that are unsuitable for farming. Most of these transfers have been between parcels in common ownership. But Mr. Malone estimates that about five transfers have used the provisions for transferring between parcels in separate ownerships.

Approximately half the land in the Southeast Quadrant (SEQ) District is designated as development areas; development areas allow farming, forestry and low-density residential development. The other half of the SEQ is designated as restricted areas. Restricted areas are further classified as wetland, floodplain, woodland/wildlife habitat, open space and parkland; in addition, open space/scenic corridors flank the two major roads that cross the SEQ in an effort to protect scenic views which the City considers spectacular and unique.

Restricted areas are limited to farming, forestry, recreation and other open space activities. However, on lots in existence when the SEQ was created, the South Burlington code allows one dwelling unit to be constructed. Within restricted areas, new lots cannot be created for the purpose of residential development. However, the owners of restricted land can use a Planned Residential Development (PRD) process to allow limited development in restricted areas and to transfer density from restricted areas to development areas.

Under this PRD process, property owners submit a plan for non-contiguous parcels. The Planning Commission can approve residential development within restricted areas as long as the proposed PRD promotes the intent and purpose of the SEQ. The Planning Commission reviews the plan for a parcel in a restricted area to determine whether the open space proposed in the plan maximizes the preservation of farmland, scenic view corridors, streams, wetlands, floodplains, wildlife habitat and other natural resources. Development can be clustered as long as the maximum density of four units per acre on the receiving site is not exceeded. To ensure preservation, the Planning Commission can require the recording of preservation easements.

In addition to allowing development in restricted areas, the PRD process can be used to transfer development from restricted areas to development areas. At sending sites in the restricted areas, development rights can be assigned at the rate of 1.2 dwelling units per acre. These rights can be transferred to receiving sites in the development areas. In order to accommodate transfers, density on receiving sites can increase from the base rate of 1.2 units per acre to an average of four units per acre.

The owners of receiving sites have a substantial motivation to buy development rights since they can result in a density bonus of 233 percent, going from a base zoning of 1.2 units per acre to a density of four units per acre.

Likewise, the owners of land in restricted areas have significant incentives for using TDR. These restricted sites often have site constraints which could inhibit or even prevent development regardless of any land use restrictions. In addition, South Burlington has designated these sending sites as restricted sites, meaning that the City will not allow them to be developed unless code exceptions are granted. Consequently, transferring development rights may be the only way for an owner to receive development-related revenues from a restricted site. As a case in point, the owner of a wetland, who would otherwise be unable to make productive use of his or her property, can transfer development rights from that unbuildable land at the rate of 1.2 units per acre.

The South Burlington TDR program, adopted in 1992, has already experienced a noteworthy success. In this project, approximately 50 units were transferred from a 45 acre site so that it could continue to be used as a hayfield. The 50 units transferred from that site were used to increase the base density on a 221-unit development.

In the early 1990s, Springfield adopted a Comprehensive Plan Update which calls for the protection of vital natural resources including farmlands, prime agricultural soils, water sheds, wetlands, woodlands and steep slopes. To implement the Plan, Springfield adopted a zoning ordinance in 1996 that uses TDR as a means of transferring development rights from sending areas in the Conservation and Agricultural zoning districts to receiving sites in the Residential Open Space, Residential and Village Center zoning districts. In addition to preserving the resources of the sending areas, the TDR provisions are designed to "encourage flexibility, economy, and ingenuity in the development of parcels in the designated receiving areas".

In the Concept section of the TDR ordinance, Springfield emphasizes that transfers are voluntary agreements between willing buyers and sellers. The ordinance prohibits the Township from forcing the sale or use of development rights. The rights can be purchased, resold or held by anyone for future use for investment or other purposes.

Under the original TDR program, transfers could be made between parcels in the Conservation and Agricultural zoning districts as long as the parcels were under the same ownership. Although this program experienced two transfers, it allowed transfers into both the Conservation and Agricultural zoning district. Under the new program, adopted in January of 1996, the sending areas are parcels in the Conservation and Agricultural zoning districts. In these districts, the number of development rights available for transfer is determined by the total number of dwelling units permitted to be built on site. However, for each development right transferred, three additional units can be built on a receiving site, representing a transfer ratio of three-to-one.

On a parcel of land zoned either Conservation or Agricultural of less than five acres in size, one dwelling is permitted. However, the allowed density decreases as the size of the parcel increases; for example, a parcel 30 acres in size is allowed five dwellings, or a density of one unit per six acres. When a parcel is over 150 acres in size, seven units are permitted plus one additional lot per each 30 acres of land in excess of 150 acres.

To create transferable development rights, the owner submits a plan of the sending site showing the number of rights applicable to the parcel, the number to be transferred and the number remaining. (The sending site must either have an existing dwelling unit or retain at least one development right.) The Township Board must approve the creation of the transferable rights at a public meeting.

The Township Board also must approve a Deed of Transfer of Development Rights which specifies the individual or receiving site property to whom or to which the development rights are being transferred. The document cannot be recorded prior to the execution and recording of a Declaration of Restriction of Development, a deed restriction which permanently deed restricts the residential development on the sending parcel.

The receiving sites are parcels zoned Residential Open Space, Residential District and Village Center District. Developments using transferred rights can increase from a density of 1.0 to 1.2 units per acre, a 20 percent increase, in the Residential Open Space District, from 2.0 to 3.0 units per acre, a 50 percent increase, in the Residential District and from 2.5 to 3.0 units per acre, a 20 percent increase, in the Village Center District.

The ordinance also allows development rights to be converted into commercial floor area for use in commercial and office projects at a ratio of 4,000 square feet of floor area for each development right transferred from a sending site. However, each development right must be applied to either a residential or a commercial receiving site project.

The receiving site must be served by either a public water supply or central sanitary sewer system. The receiving site project must also comply with all development standards required by the zoning code.

An application for a receiving site project must be accompanied by the following:

The final plan for a receiving site development cannot be approved until the Town receives proof that the Deed of Transfer of Development Rights and the Declaration of Restriction of Development have been recorded. After approval of the final plan, a new deed for the receiving parcel must be recorded.

Springfield’s ordinance also provides a separate mechanism for transferring development rights on a one-to-one basis, by condition use permit, between parcels which are both in the Agricultural zoning district under several limitations:

Two transfers occurred under the original TDR program. In both instances, a property owner transferred two development rights from a parcel on a dirt road to another parcel fronting on a paved road. In both cases, the sending site was zoned Conservancy and the Receiving site was zoned Agricultural. Since the new program was only adopted in 1996, it is too early to gauge its success. According to Township Secretary-Treasurer Barb Sweitzer, demand for extra density is constrained by the fact that the Township does not yet have a sewer system and a sewer system is needed to achieve the receiving site densities offered by TDR. However a sewer system is now being planned. The Township can expect to see greater use of the TDR program once the sewer system is available.

In response to this growth, the Town considered a TDR ordinance in 1973. However, this proposal was rejected in favor of a more comprehensive planning process which included six citizen advisory groups. In the goal-setting phase, these groups identified a need to preserve farmland along the Connecticut River for scenic and open space purposes as well as agricultural use. However, it was also recognized that farmland preservation, without some form of compensation, could cause economic hardships for landowners in general and could specifically make it difficult for farmers to obtain loans to finance ongoing farming operations.

In 1975, a comprehensive zoning code amendment created critical resource districts in which all new development was required to obtain a special permit from the Zoning Board of Appeals. The amendment also contained a provision that preserved open space by allowing clustering in any district except the prime agricultural zoning district. In addition, the new code included a TDR component which allowed transfers from prime agricultural districts to areas designated as appropriate for growth. Since then, additional code amendments have expanded the scope of the TDR program in an effort to preserve watershed and other environmental resources as well as farmland.

Sunderland’s sending sites are parcels within its three overlay zones, called special resource districts: the Prime Agricultural District, the Critical Resource District and the Watershed District. The Prime Agricultural District covers the farmland on the east side of the Connecticut River for the entire length of the Town. The Critical Resource District, which primarily covers riverbanks and steep slopes, is an overlay zone designed to protect lands of critical importance from the standpoint of hydrology, water quality, erosion, natural habitat, scenic value, historic character and other environmental considerations. The Watershed District, which covers the headwaters of a brook at the southeastern corner of the Town, is designed to protect groundwater and surface water from land uses and structures which could contaminate or otherwise adversely affect water resources; unlike the two other overlay zones, land within the Watershed District is limited to a minimum lot size of three acres.

Development in the special resource districts can only be approved by special permit after non-development alternatives have been explored. In one alternative, the developer must demonstrate that it would be infeasible to preserve the land in any of three ways: by transferring the development rights, using the major residential development process described below; by selling the development rights; or by selling the land to a public agency or a land preservation organization. In the other option, the Board of Appeals can grant the special permit without a demonstration that preservation would be infeasible; however, when this option is used, the Board must prohibit all on-site work for 120 days unless, within that 120 days, a Town Meeting votes on a proposal to acquire the land or the development rights.

A special permit application must be accompanied by a report detailing the effect of the proposed development on the environment, including surface and ground water hydrology, water quality, soil erosion, wildlife habitat, scenic features and historic resources. The Board of Appeals must consider the recommendations of the Conservation Commission and the Planning Board as well as hold a public hearing before making a decision on a special permit. The permit can only be granted if the Board makes written findings that the benefits of the proposed project outweigh all the potential adverse impacts in the areas of socio-economics, traffic, adequacy of infrastructure, neighborhood character, natural environment and fiscal impact. In granting special permits, the Board may impose whatever conditions are needed to achieve the purposes of the code.

These special permit requirements motivate the owners of land in special resource districts to explore the potential for using their land as sending sites under the TDR provisions of the major residential development approval process. Sending sites need not be contiguous to the receiving sites or be in the same ownership as the receiving sites proposed for the major residential development. To create transferable development rights, sending sites must be preserved from nonagricultural or nonconservation uses either by perpetual deed restriction or by deeding the land to the Town or a preservation organization. The development units which can be transferred are calculated by determining the number of dwelling units which could be built on the deed-restricted land and multiplying by two. In other words, the program offers a two-to-one transfer ratio.

Receiving sites can be located in three of the Town’s four underlying zoning districts: Village Residential (VR), Rural Residential (RR) and Commercial (C). However, land within one of the three special resource district overlay zones cannot be a receiving site.

Transfers must be approved by special permit under an approval process called "major residential development". If a project would produce more than six new dwelling units within a two year period, it must be approved through the major residential development process. Alternatively, the developers of smaller projects can also use the major residential development process in order to take advantage of special provisions such as transfer of development rights and flexible development standards. Using flexible development standards, major residential developments can have a greater number of substandard lots and can achieve minimum lot sizes that are one half the size required under normal zoning procedures.

In addition to flexibility in lot size and frontage, a major residential development can be awarded density increases if the proposed project incorporates affordable housing or if it uses development rights transferred from approved sending sites. An approved sending site must meet several requirements: it must be land in a special resource overlay district which the Planning Board, after a recommendation from the Conservation Commission, has found to be of special resource value because of wildlife habitat, fragile terrain or visual importance; the proposed sending site must abut an existing street; and it must be preserved for agricultural-conservation uses by a conservation restriction or because it will be deeded to the Town.

The proposed receiving site development can be granted up to 25 percent more density through TDR if the Planning Board determines that the proposed receiving site development provides resource protection through sensitive site selection and design.

When Coughlin reviewed the Sunderland program in 1980, he found that there had been no transfers approved in the five years that the program had been in existence. There was little interest in using TDRs, Coughlin reported, partly because growth slowed down at the University of Massachusetts However, even though no transfers occurred, the Town largely succeeded in achieving its land use goals; according to Coughlin, no farmland was lost in the 1970s after passage of the new agricultural zoning district in 1975.

According to Tom Fydenkevez, Chairman of the Town Planning Board, the TDR process was used only once. In 1992, a 30-lot subdivision was approved with extra density provided by transferring development rights from two sending-site lots. The project was controversial because the sending site lots were considered by many to be undevelopable due to extremely steep slopes. As a result, the Town has held public meetings to discuss further refinements in the TDR ordinance, particularly adding provisions which ensure that proposed sending sites are actually developable.

Sunderland has many features found in successful TDR programs. The permit process needed to build in special resource districts gives land owners a motivation to consider transferring development rights rather than trying to use them on site. The two-to-one transfer ratio also provides an added incentive. On the receiving site, developers are encouraged to use TDR by the 25-percent density bonus as well as the ability to get exemptions from lot size and lot frontage requirements using the major residential development approval process.

However, the demand for transferred development rights may be reduced by a relatively slow rate of growth in Sunderland. The Town has a development rate limitation ordinance which limits building permits to a quota of 18 units per year, with exceptions for affordable housing and development on individual lots. This quota is based on historic growth rates in the Town, indicating relatively low development pressure.

Talbot County’s Rural Conservation (RC) District is designed to conserve wetlands, forests and other natural environments as well as provide for resource development activities such as agriculture, forestry, fisheries and aquaculture. While agricultural uses are intended as the primary activity in the RC District, large-lot and clustered development is allowed outside of Habitat Protection Areas. The District has a base density of one dwelling per 20 acres.

Within the RC District, density can be transferred through joint subdivisions. Joint subdivisions include a sending area and a receiving area. The sending area is property within Plant and Wildlife Habitat Areas, Drainage Basins of Anadromous Fish Propagation Waters, natural park sites and recreational open space sites excluding areas that are within 500 feet of significantly eroding shorelines, ( with an erosion rate of at least two feet per year) plus adjacent shorelines within 100 feet.

The receiving area is land in the RC District within 500 feet of significantly eroding shorelines plus adjacent shorelines within 100 feet. In promoting transfers to these areas with high erosion rates, the County requires developers to build erosion control facilities at their expense; as the developers sell lots in these subdivisions, the individual owners are required to repair and maintain these erosion control facilities.

In a joint subdivision, the development rights from the sending area are used in the receiving area. Development rights are transferred from the sending area at the rate of one dwelling per 20 acres. The density in the receiving area cannot exceed one dwelling per five acres combining both the units transferred and those permitted by the base zoning. Following a transfer, the sending area is protected from further development through fee title donation, conservation easements and/or cooperative agreements with property owners, whatever method is determined by the Planning Officer to be most appropriate. Using joint subdivisions, the County benefits from shoreline protection at the receiving site and resource preservation at the sending site.

Talbot County also uses a second TDR mechanism to preserve agricultural land in its Rural Agricultural Conservation (RAC) District. The RAC District is intended to provide for agricultural activities while allowing limited single-family residential development. Cluster and TDR-cluster options are not available for parcels of six acres or less. For parcels larger than six acres, the base density is one dwelling unit per 20 acres plus three dwelling units. For cluster subdivisions, the density is one dwelling unit per ten acres plus three dwelling units. And for TDR-cluster subdivisions, the density is one dwelling unit per five acres plus three dwelling units.

Developers who choose the cluster subdivision option obtain a higher density than the basic subdivision density in return for preserving much of their parcels in open space through Reservation of Development Rights Agreements which prohibit future development. The TDR-cluster option allows development rights to be transferred from one RAC District property to another as long as it is within the same County Election District. Development restrictions must be placed on ten acres of the sending area for each dwelling unit transferred to the receiving area. Through this process, the density on the receiving site can be almost twice the density allowed through the normal cluster subdivision process.

To illustrate the options, a 60-acre parcel would yield six dwelling units under the normal subdivision process; one unit per 20 acres plus three dwelling units. The same 60-acre parcel under the cluster subdivision option could be developed at one unit per ten acres plus three units, or nine units in total; in return, 65 percent of the 60-acre parcel, or 39 acres, would be preserved as open space. The TDR-cluster option offers a density of one unit per five acres plus three units, or a total of 15 units on the hypothetical 60-acre parcel; as in a normal cluster subdivision, 65 percent of the parcel would have to be preserved in open space. In addition, for every unit transferred to the receiving site, ten acres would be preserved as open space at sending sites elsewhere in the RAC. In this 60-acre example, six units are transferred in, representing 60 acres preserved at the sending sites in addition to the 39 acres protected at the receiving site. In this example, the 15 units achieved under the TDR cluster option represents a 150-percent density bonus over the six dwelling units allowed under the normal subdivision process.

As of 1997, only one joint subdivision project in the RC District had been approved by Talbot County. That project, approved in 1990, has a 37-acre receiving site. Six units were approved; one unit was allowed by base density and five units were transferred in from two separate sending sites. A total of 100 acres were permanently preserved at the two sending sites as a result. The developer chose not to build the maximum allowable density of seven units because the extra unit would have created a need to build a public road. Since 1997, a second transfer was approved saving another 480 acres.

In 1997, Tracey L. Greene, Assistant Planning Officer, stated that the TDR provisions are not used more often because the demand in Talbot County is greater for estate-sized lots than for smaller-lot subdivisions. As a result, there is less demand for the additional density offered through the transfer process. In 1998, Frank Hall, Assistant Planning Officer, reported three more reasons for the relatively slow rate of transfers: 1) little development pressure, 2) the need to install water and sewer service to use the density bonus allowed by TDR, and 3) the fact that many property owners are initiating shoreline protection measures without using the TDR incentives.

Washington Township, population, 2,800, is located in Berks County, Pennsylvania, 35 miles northwest of Philadelphia. It is a rural township surrounding two incorporated villages, the Boro of Bally and the Boro of Bechtelsville. Most of the Township contains prime agricultural land owned for generations by farming families.

Washington Township did not experience intense development pressure, even during the building boom of the 1980s. However, Township officials believe that growth-related problems are inevitable due to the Township’s proximity to Philadelphia and its location on the state highway connecting Pottstown and Allantown/Bethlehem. Consequently, the Township Board of Supervisors aims to preserve farmland by channeling future growth into areas where higher density development is most appropriate.

In 1988, the Pennsylvania Municipalities Planning Code (MPC) officially authorized communities to use TDR. As a result, this technique was of interest to the Washington Township Planning Commission when it began a complete revision of its comprehensive plan and zoning ordinance in 1990. One year later, the Pennsylvania Environmental Council distributed "Guiding Growth", a publication that included eight characteristics common to successful growth management programs using TDR.

The Township’s land use consultants were initially concerned about the feasibility of using TDR in a municipality with only 15 square miles of land area. But the Township Board, with the assistance of the Planning Commission and the Agricultural Advisory Committee, proceeded to identify the conditions needed for a successful TDR program. The Board determined that a sewer system was needed since there was already evidence of septic system failure; furthermore, the Board found that a sewer system would not only allow for the concentration of development but would also would reduce the per-household cost of providing sewerage to existing homes and businesses. The Board also countered criticism that TDR encourages growth by observing that TDR was one way of channeling inevitable growth pressures into the most appropriate areas and away from the areas that should remain rural.

The Township’s consultants considered numerous alternatives and a TDR concept eventually evolved with the Township’s agricultural preservation area as the sending site. Under Pennsylvania Town Law, development rights cannot be transferred to other municipalities; consequently, the incorporated boros of Bally and Bechtelsville could not serve as receiving sites. Instead, the receiving area is a valley in the Township lying between the unincorporated villages of Barto and Eshbach. The zoning ordinance which implements this concept was adopted in 1993. In adopting that ordinance, the Township identified prime agricultural land as a non-renewable resource and acknowledged that regulations, like zoning, affect the development potential of that resource and, consequently, the viability of farming.

Specifically, the 1993 zoning ordinance established the following five objectives of the TDR program.

In Washington Township, development rights need not be transferred immediately to a receiving site; the rights can also be resold or held as an investment by a purchaser. The code specifies that the severance of development rights is entirely voluntary, that the use of severed rights on receiving sites is also voluntary and that the buyer of development rights need not be the owner of a receiving site. The code also requires the Township to render a decision on a request to create or transfer development rights within 90 days of the date that the Planning Commission accepts the plans for review.

Sending sites include all land in the Agricultural District. This two square mile area is located just east of Bally in the northeastern corner of the Township. The Agricultural District allows residential development according to a sliding scale: one unit per six acres, two per 15 acres, three per 45 acres, four per 90 acres and five units per 175 acres; for each 100 acres over 175 acres, one additional dwelling unit is allowed. About three quarters of the Agricultural District is designated as the "one-acre overlay".

For sending sites in the one-acre overlay of the Agricultural District, development rights are calculated by subtracting the number of existing units from the number of eligible acres in the tract. To determine eligible acres, gross acreage is reduced by the number of acres prohibited from development by easement or covenant, land situated outside of the Agricultural District and land located in designated wetlands, floodplains and public rights-of-way. For sending sites which are not designated as one-acre overlay, the transferable development rights are calculated by subtracting the number of existing units from the number of eligible acres and dividing by three.

This formula provides a considerable incentive for sending site owners to use TDR rather than building on-site. For example, an undeveloped 15-acre sending site in the one-acre overlay, would be allowed two units on site but could be allowed as many as 15 transferable development rights; a significant transfer ratio of 15:2. The same lot outside the one-acre overlay could generate as many as five TDRs, which is still a substantial transfer ratio of 5:2.

The process for severing rights begins when the sending site owner submits a plan of the proposed sending site showing all easements, wetlands, floodplains and rights-of-way as well as the calculation of eligible acreage and existing dwellings. Upon the advice of the Planning Commission and the Township Engineer, the Board of Supervisors approves the number of development rights available for transfer at a public meeting. The development rights are created when the applicant records the approved plan with the Berks County Recorder of Deeds.

To transfer development rights, a deed of transferable development rights must be approved by the Board of Supervisors and recorded along with a declaration which deed-restricts the sending site in perpetuity for the number of development rights transferred. The owner need not transfer all transferable development rights from the sending site; however, fractional rights may not be transferred.

A receiving site developer who wishes to use TDR must prove ownership or equitable ownership of the development rights needed for a proposed project. When the project is approved, a new deed must be recorded attaching the deed of transferable development rights to the receiving site in perpetuity.

Receiving sites for transferred development rights are primarily in the Township’s High Density Residential and Village (HDV) district. This zone, which extends for two miles between the unincorporated villages of Eshbach and Barto, is designed to accommodate higher-density, mixed use development where it can be served by public sewer, water and transportation.

Maximum by-right density in the HDV district is one unit per acre when a lot is not served by public water, public sewer or both. By using transferred development rights, lots served by either public water or sewer can achieve a density of one unit per 37,500 acres. Lots served by both public water and sewer have a maximum by-right limit of one unit per 25,000 square feet; when TDR is used the maximum density increases five-fold to one unit per 5,000 square feet. In other words, this option offers a 400 percent density bonus. Development rights cannot be used to increase density on lots which have neither public water or sewer. A formula requires about one transferred development right for each additional dwelling unit allowed on the receiving site.

In addition to extra residential units, development rights transferred to the HDV district can be used to allow specified commercial uses. For some of these uses, each transferred development right permits a specified amount of floor area; for example, one development right allows 500 square feet of retail, 800 square feet of restaurant, 400 square feet of beauty parlor and 500 square feet of professional office space. In other cases, a transferred development right permits a given use regardless of its size; for example, one development right can allow a school, library or day care center.

TDR can also be used to build shopping centers greater than 30,000 square feet in the Township’s Commercial district, a one-half square-mile area east of the HDV district. In this zone, developers must acquire one transferred development right for each 500 square feet of shopping center floor area in excess of 30,000 square feet.

In addition to the HDV and Commercial districts, transferred development rights can also be used to increase the density of potential receiving sites in the Suburban Residential (R-2) district. The two-square-mile R-2 district lies east of Bectelsville and the Town’s Commercial district. On R-2 land, the allowable density depends on whether the site is served by on-site water and septic or public water and sewer systems.

TDR cannot be used to increase density on a lot that has neither public water or sewer. However, TDR can slightly increase the density of receiving sites with either public sewer or public water systems from one unit per acre to one unit per 40,000 square feet. To achieve this higher density, roughly one development right must be transferred for each unit proposed at the receiving site. Receiving sites served by both public water and sewer systems can achieve a four-fold density increase to one unit per 10,890 square feet by transferring development rights at the rate of one development right for each additional unit proposed for the receiving site. Alternatively one transferred development right is required for each lot at the receiving site proposed to be less than one acre in size.

The Washington TDR program has many features found in successful TDR programs. The owners of land in the sending area, the Agricultural District, can build relatively little on site but can be awarded transferable density rights at the rate of one TDR per acre; this attractive transfer ratio provides a substantial motivation for these property owners to use TDR. Similarly, density increases of up to 400 percent over baseline for projects using TDRs should be of great interest to the developers of receiving sites.

In fact, as reported by the August 1995 edition of "Pennsylvania Township News", developer interest in the TDR process is high. Soon after the ordinance was adopted, 95 development rights were created when preservation plans for 300 acres of agricultural land on three farms were approved by the Board of Supervisors and recorded. In addition, the Boro of Bally has severed development rights for land it owns within the Township. As of June 1996, the Town had given final plan approval to its first receiving site project: a mini-market/drug store on the Township’s major highway.