Develop Transfer of Development Rights (TDR) Programs

Who can implement this: County and city officials, agricultural producers, and developers

County and city policymakers should work to create an efficient transfer of development rights (TDR) program. TDR programs would enable landowners to preserve farmland by transferring development to more appropriate locations.

TDR programs are market-based tools that encourage and facilitate the voluntary transfer of development from places, such as farmland, where development is undesirable to locations where development is encouraged.[1] Transferring development rights helps preserve critically important lands, but for a TDR program to work efficiently the government must clearly define the process of facilitating transfers.

In a TDR program, landowners of a property gaining the development rights (the receiving area) compensate the owners of a donating property (the sending area). A deed restriction is then permanently placed on the property that donated its development rights. For a property to qualify as a receiving site, it must be suitable for additional development, with services and infrastructure either in place or planned.[2]

Implementing a TDR program for Utah County would provide additional options for farmers who want to profit from some of the development potential of their land without having to subdivide their property or sell it completely. It would enable them to continue farming and keep the land in agricultural use.

In order to implement a TDR program, however, cities or counties will need to address the following challenges:[3]

  • Deciding whether the TDR program will be limited to a single municipality or if it will be cross-jurisdictional. Cross-jurisdictional agreements can be set up if necessary.
  • Inadequate receiving areas as a result of developmental pressures. Ill-equipped receiving sites can result in TDR programs failing, so jurisdictions must designate appropriate receiving areas throughout the transfer process.
  • Ensuring the presence of adequate infrastructure. The receiving areas must have sufficient infrastructure (e.g. roads, utilities, and stormwater facilities) to support the added density and population growth.
  • The use of zoning and development standards in ensuring the program’s viability. TDR programs are market-based mechanisms that succeed best when there is a high demand for development. Though jurisdictions cannot control the market, the zoning and development standards in different urban and rural areas help determine the forms of viable development and how willing developers may be to transfer development to other areas.
  • The need for active support and leadership. Most successful TDR programs have strong leadership that focus on public outreach and education, program advocacy, and transaction support.

Implementation:

Establishing a TDR program within a municipality or region generally involves the following basic steps: [4]

  1. Establishing a TDR as a voluntary option with administrative provisions within the county or municipal zoning ordinance.
  2. Identifying the sending area. A sending area has significant conservation value and is usually a defined geographic area, but it can also be based on specific locational criteria.
  3. Determining the number of TDRs allocated to each landowner within the sending area. This number is usually determined through a simple mathematical formula—e.g., one TDR for every five acres. Most municipalities establish some minimum parcel size for a landowner’s eligibility to transfer development rights. The county or municipality must determine if the TDR allocation formula “nets out” constrained lands—i.e., those not easily buildable and which may have reduced development value.
  4. Establishing the procedure for severing development rights. Usually this procedure is written as part of the zoning ordinance provisions and requires the use of a Deed of Transferable Development Rights document. The ordinance can include a sample deed document approved to form by the county’s or municipality’s solicitor. The procedures must also require that an executed deed be recorded with the county recorder before a receiving area’s proposal to acquire development rights through TDR is approved.
  5. Establishing the procedure for permanently protecting the land from which the development rights were severed. Normally this procedure requires the use of a restrictive covenant, or preferably, a conservation easement held by a third party.
  6. Identifying the receiving area. A receiving area is planned to accommodate growth and preferably already has public utilities (such as water and sewer) or has plans for them. Receiving areas can be residential, commercial, industrial, institutional, or any combination thereof. Preferably, a municipality or region should have previously identified both the sending and receiving areas during a comprehensive plan update process.
  7. Creating plan-submittal requirements for the development of a receiving area. A development subject to TDR receipt can be made a conditional use within the zoning ordinance, or participation in a Traditional Neighborhood Development Overlay District can be made subject to the purchase of some level of TDRs.

Examples:

Mapleton, Utah, uses a TDR program to preserve critical environmental areas, particularly the foothill areas that lie east of the city. The Mapleton TDR program promotes the preservation of agricultural land, rural open space, scenic vistas, sensitive lands, natural hazard areas, and places where delivery of public services would be difficult and/or expensive, such as hillsides and mountainsides.

Sending areas are designated in the Mapleton general plan. The maximum density of the proposed development cannot exceed the maximum density of the site’s general plan designation. In deciding whether or not to approve development on a receiving site, the city council must consider the compatibility of the proposed development with surrounding development as well as consistency with the general plan and compliance with the development code. The city council can also determine lot sizes and other development standards, including density.[5]

© 2016 Envision Utah • 254 S 600 E, Suite 201, Salt Lake City, Utah 84102 • 801-303-1450