Transfer of Development Rights
A Transfer of Development Rights (TDR) program is designed to limit potential development in vulnerable areas, while compensating property owners for the reduction in property values. A locality can identify vulnerable “sending” areas, where development intensity should remain low, & upland “receiving” areas where higher density density development is more suitable. A market can be established where landowners in the sending area can be compensated for the transfer of some of their development rights to a property owner in the receiving area. Localities may also choose to compensate these landowners through tax credits.
A TDR program can protect ecologically valuable land like floodplains & wetlands that have benefits for flood & stormwater mitigation. It can also help shift development upland, where it will be less susceptible to recurrent flooding, storm surge, and SLR.
Frederick County: Board of Supervisors adopted a successful TDR program in 2010. The receiving area is targeted as a Urban Development Area (UDA). Sending parcels are in agricultural zones over 20 acres & sited outside the UDA. The sending/receiving area map & density bonuses are based on 3 distinct sending areas. This encourages farmland preservation & increased development opportunities within the County's target growth area.
By 2012 there were at least 239 TDR programs in 35 states. Collier County, FL TDR program used to preserve 31,400 acres - sites receiving increased development rights were separated in a “new-town” area, to underscore the idea that no economic development was lost, which had great success.
New York: 2 or more localities may collaborate under a TDR program. This could be beneficial in situations where one locality seeks to preserve open space but doesn't have a sufficient recieving area, while a nearby locality is attempting to incentivize development in a given area. VA code also authorizes regional TDR programs.
Arlington, VA Code of Ordinances Article 9: Special Planning Area Regulations
"9.3.5. Transfer of Development Rights Permitted for historic preservation, open space and affordable housing purposes for sending sites specifically identified in the Plan and located in the “Conservation Area” designated in the Plan … Additional sending sites that are located within the “conservation area” designated in the Plan may be approved by the County Board… 4. In order to achieve the goals of the Plan, it is preferred that density be transferred to sites within the “Revitalization Area” designated in the Plan…"
Rising flood insurance rates are beginning to change the conversation about TDR programs at the local level, although local staff find difficulties in implementation - concern about administrative complexities of TDR, especially tracking & record keeping of development right transferals.
Solution: Ocean City, MD streamlined the administrative process, requiring only a simple transfer form between the sender & receiver.
It is also difficult to establish a TDR program in highly built-out areas. One urban locality located in Hampton Roads noted that a TDR program has not been considered for this reason.
Some localities have comparable programs to TDR, which have the effect of reducing potential development in ecologically valuable areas.
Ex. Virginia Beach uses Agricultural Preservation zone to downzone in priority area
Ex. Poquoson has identified the highest land area in the city & created an overlay area which allows for greater development density
- Provides design flexibility & fits into a range of growth management scenarios
- Provides a financial incentive for land conservation in especially sensitive areas
- Allows a locality additional control over which areas are further developed
- There is already widespread implementation of TDR in the US
- Provides a less expensive alternative to land acquisition
- Passes the cost of the development rights onto a private party.
- Can create the perception of economic loss
- As a voluntary program, relies on property owner interest (marketing is important)
- Urban areas that are mostly built-out are unlikely to have many options to establish a TDR program
- Program complexity
A development rights land bank ensures there is a ready market for development rights. Localities establish the “bank” & acquire/retain rights within a sending district. When a property owner in the receiving district seeks to purchase additional development rights, they are immediately available. The state of New York implemented development rights banks through enabling TDR legislation. New York has also implemented an innovative variation on conventional TDR programs.
Ex. Southampton NY: Code allows for “zoning lot merger,” where a property owner of two contiguous parcels can place a conservation easement on one plot & transfer its development rights onto the adjacent parcel.
Coastal communities can consider a TDR program to retreat from the shoreline by designating parcels along the coast as the sending zone.
Ex. Ocean City, MD: Beach Transfer Program used to remove development rights to property landward of the mean high water line.
Credit for regulations providing TDR away from the floodplain
Environmental Site Design is an initial step to meet Runoff Reduction requirements for stormwater management plans. Clustered development, conservation subdivisions, and low impact design can be incentivized with density bonuses from TDR programs, minimizing impervious cover and prioritizing protection for natural stormwater conveyance. TDR can also be used as a land-use change tool to meet TMDL goals as an Urban Growth Reduction BMP.
Credit for requirements or incentives to reserve floodplain portions of new developments as open space
Code of Virginia, § 15.2-2316.2:
Localities may provide for transfer of development rights through ordinance
Code of Virginia, § 15.2-2223.1:
Allows localities to establish urban development areas, which can be designated as an area for transfer of development rights
Model TDR Program (Virginia Municipal League)
Locality Assistance Program for Natural Heritage Conservation (VDCR): includes recommended language for PDR/TDR programs
Grannis, J. (2011). Adaptation Tool Kit: Sea-Level Rise and Coastal Land USe. Georgetown Climate Center.
James River Association. (2010). Examples of Code and Ordinance Language for Better Site Design. Greener Results Consulting , Richmond.
Jarbeau , S. H., & Stiff, M.-C. (2015). Flood Protection Pay-Offs: A Local Government Guide to the Community Rating System. Wetlands Watch.
Lausche, B. (2009). Policy Tools for Local Adaptation to Sea Level Rise. Marine Policy Institute at Mote Marine Laboratory.
McStotts, J. A Preservationist’s Guide to Urban Transferable Development Rights . National Trust for Historic Preservation.
Siders, A. (2013). Managed Coastal Retreat: A Legal Handbook on Shifting Development Away from Vulnerable Areas. Columbia Law School, Center for Climate Change Law.
Silton, A., & Grannis, J. (2010). Stemming the Tide: How Local Governments Can Manage Rising Flood Risks . Georgetown Climate Center.