Preserving Resources and Property Rights: Transfer of Development Rights

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Preserving Resources and Property
RightsTransfer of Development Rights

• Jill Clark
• Director, OSU Center for
• Farmland Policy Innovation

This project was supported by the USDA
Cooperative State Research, Education and
Extension Service, USDA, Grant 2006-38428-16876
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Agenda

• OSU Center for Farmland Policy Innovation
• TDR concept and mechanism
• History of TDRs
• Success factors
• Current legislative environment
• Ohio study and demonstration project

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Center for Farmland Policy Innovation

• Mission
• To enable Ohio local governments to achieve
  farmland policy priorities by partnering on
  innovative projects and providing needed
  programming.

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Center for Farmland Policy Innovation

• What we do
• Policy demonstrations
• Policy briefs
• Annual Farmland Preservation Summit
• Community consulting

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The Concept and Mechanism
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History

• Where and what year was the first TDR used?
• 1980s use of TDRs for open space and farmland
  protection became popular
• Now 181 programs in 33 states

New York City
1916
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Experiences

• Montgomery County, MD 47,000 acres
• Well known
• Farmland focus
• King County, WA 92,000 acres
• 455 private transactions
• Over 1000 public banking transactions
• NJ Pinelands 48,000 acres
• 60 jurisdictions
• Agricultural lands and pinelands
• Warwick Township, PA
• Partnered with land trust
• Used industrial zone as first receiving area

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TDR - Upsides

• Addresses equity concerns upfront
• Market-base approach to resource protection
• Protect resources without public funds
• Growth management with carrots
• More permanent resource protection than zoning
• Makes development more predictable

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TDR - Downsides

• Developing a functioning market is difficult
• Need for increased administration
• Need for increased education
• Outcomes are uncertain
• Most communities in Ohio are over-zoned
• Matching the scale of urbanization and scale of
  program

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TDRs by Another Name

• Community Transfer Program
• Community Exchange Program
• Growth and Protection Exchange
• Market-Based Preservation Program
• Growth and Protection Initiative
• Development Swap Program
• Heritage Preservation Development Program
• Farmland and Development Initiative
• Livable Communities Development Program
• Rural Heritage Development Initiative
• Incentive-based Growth and Protection Program

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Alternative Descriptions

• Option
• Opportunity
• Voluntary
• Market-based
• Market-driven
• Private transactions

• Community-wide
• Landowner/Developer relationships
• Growth/Protection
• Personal Choice
• Expanding development rights

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The Mechanism
receiving area
sending area
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Types of Sending Areas (supply side of the market
for transferring rights)

• Farmland
• Open space
• Wetlands
• Critical habitat
• Historic buildings
• Affordable housing
• ??

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Types of Receiving Area Incentives

• Can be applied to residential, retail or
  industrial
• Exemptions from impact fees
• Exemptions from certain development standards,
  like setback, open space and parking requirements
• Additional floor space
• Additional floors
• Lot coverage
• Building permit priorities
• Density

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Potential Locations ofReceiving Zones

• In fill
• Expanding edge
• New amenity-center PUDs and towns

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TDR Design Features

• Planning, Planning, Planning
• Administration
• Designation of sending areas
• Designation of receiving areas
• TDR allocation rate
• Density bonus in receiving areas
• TDR requirement in receiving areas
• Easement provisions
• Monitoring, Evaluation,

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Overall Approach toMarket Creation

• Reactive approaches
• Whenever an upzone or variance is requested in
  receiving zone
• Proactive approaches
• Designate specific zones
• Can use a combo of reactive and proactive

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Adaptation of Rick PruetzsSuccess Factors

• Support
• Functioning Market
• Affordable TDRs
• Flexibility
• TDRs by Right
• Consistent application
• Ease of participation

American Planning Association, Planning and
Environmental Law, June 2007, 69(6), p4
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Additional Considerations

• Partnerships with land trusts
• Scale of administration, scale of processes,
  scale of resources
• Program facilitation
• Banking
• Putting in community funds

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Village of Madison, OhioMadison Township, Ohio

• Cleveland State University sponsored a
  demonstration feasibility study
• Both ag and green space focused
• Assumption of a growth of about 100 units per
  year
• Allocation rate of 1 TDR per 2 acres on
  unconstrained land and 1 TDR per 10 acres on
  constrained land
• Assumed 1500 TDRs purchased over 50 years
  protecting 5000 acres of land

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Village of Madison, OhioMadison Township, Ohio
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Ohio Law

• Demand - TDRs for farmland protection
• Current Bill
• HB 69
• Sponsor Wolpert
• Current Authority
• Within a jurisdiction
• Between jurisdictions

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http//cffpi.osu.edu
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Sources

• Village of Madison and Madison Township, Ohio
• http//urban.csuohio.edu/forum/events/pdf/04_13_07
  _madison.pdf
• Hiram Village
• http//cffpi.osu.edu/Hiram.htm
• Rick Pruetz
• http//www.beyondtakingsandgivings.com/index.htm
• Swank Program TDRs A Real Policy Option for
  Ohio?
• http//aede.osu.edu/programs/Swank/pdfs/TDR20ps2
  0File.pdf
• Resources for the Future Transfer of
  Development Rights in U.S. Communities
• http//www.rff.org/Documents/Walls_McConnell_Sep_0
  7_TDR_Report.pdf

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Preserving Open Space and Property Rights
Transfer of Development RightsThe Hiram TDR
Feasibility Study

• Lynne J. Erickson, AICP, Director
• Portage County Regional Planning Commission
• November 13, 2007

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HIRAM TOWNSHIP
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Portage County New Dwelling Units
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Portage County Farmland Preservation Plan
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Protecting Hiram Twp. Farmland
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Hiram Protected Areas
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Hiram Comprehensive Plan
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Hiram Comprehensive PlanScenic Resources
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Key Issues Identified

• Manage Growth, Preserve Small Town and Rural
  Character
• Preserve and Protect Farmland and Open Space
• Prefer conservation development of Twp.
• Commercial and residential development in
  Village-traditional pattern.

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Growth Scenarios Utilized

• RPC developed alternative growth scenarios
• Continued Trend Scenario
• Sustainable Development Scenario
• Development Impact Analysis
• Fiscal Impact Analysis

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Sustainable Development Future Scenario
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Selected Goals and Strategies

• Preserve a majority of the agricultural land
  base in the Township for future generations.
• Encourage sustainable economic growth of the
  Village.

• Township and Village will develop a Transfer of
  Development Rights Program..
• Land in Primary Agricultural Conservation Area
  will be sending area from which development
  rights will be sent to designated receiving areas
  in the Village.
• Village High Density Areas-densities of 6-8
  Dwelling units/acre permitted ONLY with
  transferable development rights

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Testing TDR Feasibility in Hiram Village and
Township

• The OSU Center for Farmland Policy
  Innovation-Farmland Protection Partnership
  Program
• PCRPC worked with Comp Plan partners to write
  grant
• Hiram Village awarded grant-58,900
• Partner Contributions-31,300
• 18 month project

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Project Components

• Organize for TDR Program Support-Citizens
  Advisory Committee formed
• Refine Sending and Receiving Area Boundaries and
  Capacity Assessment
• Conduct Feasibility Study/Market Analysis
• Development of Implementing Policies, Legislation
  and Procedures
• Public Outreach and Education

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TDR Feasibility Study and Market Analysis Phase

• Rick Pruetz, FAICP, nationally renowned TDR
  expert was contracted to do study
• TDR Program Component Options Presented to
  Citizens Advisory Committee and Community in
  October
• First Draft of TDR Feasibility Study underway

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Hiram Success Factors

• Experience with preservation and landowner
  interest in additional preservation
• Experience with tools similar to TDR
• Potential for affordable TDRs
• Easement value uniformity should keep program
  simple
• Desire for Village-Township cooperation

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Program Component OptionsSending Area

• Option 1 All land in Township
• Regulations protect constrained land
• Other funds available for sensitive land
  preservation
• Finite development projections suggest selective
  use of TDR
• Option 2 Land zoned RR
• Too broad to achieve primary land use goals?
• Option 3 RR zone plus bonus TDRs if currently
  farmed, prime soils, Primary Ag Conservation
  and/or designated as scenic
• - Complicated
• - Less land preserved per TDR

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Program Component OptionsSending Area

• Option 4 RR Zone and used for agriculture
• Wide opportunity for farmers to participate
• Achieves primary goal
• Preserves more land per TDR
• Simple

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Minimum Sending Parcel Size

• 40 acres
• Greater chance of remaining in farming
• 25 acres
• Most farmers can participate
• Viable for many forms of agriculture
• TDR can be used to keep parcels larger than 25
  acres intact

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Program Component OptionsTDR Allocation Rate

• Assume easement precludes all future divisions of
  the sending parcel and allows one dwelling
• Option 1) One TDR per 2.5 acres
• Simple
• Does not offer incentive to keep parcels larger
  than 25 acres intact
• Option 2) One TDR per 2.5 acres plus bonus TDR to
  preserve larger parcels (e.g. one TDR for each 5
  acres greater than 25 acre minimum)
• Less land preserved per TDR but offers incentive
  to keep larger parcels intact

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Program Component OptionsBonus Density Per TDR

• Option 1) One TDR allows one dwelling unit of any
  kind in excess of baseline density
• Advantages
• Simple
• Maximizes land preservation per bonus unit
• Disadvantage Does not recognize likely lower
  economic value of attached units
• Option 2) One TDR per one bonus single-family
  dwelling unit or 1.5 bonus attached dwelling
  units
• Advantages
• Simple allowance for detached units
• Recognizes potential lower profit margin per unit
  with attached units
• Disadvantage Complicates program

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Program Component OptionsDeveloper Compliance
Options

• Option1 Developer can only comply with TDR
  requirement by purchasing actual TDR
• Advantage - Simple
• Disadvantages
• Potential developer uncertainty about
  availability, delay and cost of TDRs
• Unlike B, no alternative acquisition method
• Does not facilitate landowner tax strategies or
  address reluctance to hold granted TDRs
• Option 2 Same as A plus developer has option to
  pay 10,000 cash in lieu of actual TDR
• Advantages
• Developers always know maximum cost of compliance
• Hiram can use proceeds to target high priority
  acquisitions
• Facilitates landowners who can sell easements at
  discount and take tax advantages for donating
  remainder

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Program Component Options Receiving Areas in
Village

• Option 1) Overlay on all future up-zonings
  (baseline density is maximum density of former
  zone and each unit in excess of baseline is
  subject to TDR requirement)
• - Simple
• - Works within comp plan
• - Demonstrates TDR is not inducing growth
• Option 2) Same as 1 plus community plans and
  rezones best receiving sites one by one
• Developers certain of achieving maximum density
  of the TDR receiving zone by compliance with regs
  and TDR requirement
• Engages community in visioning for future

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Program Component Options Receiving Areas
Township

• Option 1) Overlay on all future up-zonings
  (baseline density is maximum density of former
  zone and each unit in excess of baseline is
  subject to TDR requirement)
• - Simple
• - Works within comp plan
• - Demonstrates TDR is not inducing growth
• Option 2) Same as 1 plus community plans and
  rezones best receiving sites one by one
• Developers certain of achieving maximum density
  of the TDR receiving zone by compliance with regs
  and TDR requirement
• Engages community in visioning for future

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Program Component Options Receiving Area
Incentives

• Option 1) TDR only allows residential density to
  exceed baseline
• Simple and traditional
• Option 2) Same as 1 plus developers receive TDRs
  for committing to construct and operate specified
  land uses (e.g. grocery store)
• Advantages
• Helps Hiram improve self-sufficiency and quality
  of life
• Could generate support for TDR program from those
  less concerned about farmland preservation

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Next Steps

• November/December Rick Pruetz to prepare, amend
  and present draft TDR feasibility study
• Early 2008
• Use feedback on draft TDR study to prepare,
  amend and present final TDR Study
• Implementing Legislation prepared.
• Process to be completed by August 2008

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Selected Resources

• Rick Pruetz, FAICP, arje_at_attglobal.net
• Saved by Development Preserving Environmental
  Areas, Farmland and Historic Landmarks With
  Transfer of Development Rights by Rick Pruetz,
  AICP
• Beyond Givings and Takings Saving Natural
  Areas, Farmland and Historic Landmarks with
  Transfer of Development Rights and Density
  Transfer Changes, Rick Pruetz, AICP
  http//www.beyondtakingsandgivings.com/tdr.htm
• Holding Our Ground Protecting Americas Farms
  and Farmland by Tom Daniels and Deborah Bowers
• Transfer of Development Rights A Flexible
  Option for Redirecting Growth in Pennsylvania by
  Brandywine Conservancy Environmental Management
  Center http//www.brandywineconservancy.org/

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• Lynne J. Erickson, AICP, Director
• Portage County Regional Planning Commission
• 124 N. Prospect St.
• Ravenna, OH 44266
• 330-297-3613
• lerickson_at_pcrpc.org