Locals contain sprawl by transferring rights

At a crowded public hearing in Winder, Ga., subdivision residents and farmers vented to commissioners about the new Comprehensive Land Use Plan. Tommy Ledbetter anxiously awaited his opportunity to speak as people complained that potential development would be too close to them in this formerly rural city an hour north of sprawling Atlanta. Ledbetter’s complaint was the opposite: his land had been designated agricultural. He had hoped to have developers knocking on his door in the next decade when he tired of farming. When his chance at the mike came, he explained it as simply as he could: “That’s my wife’s pension plan,” he said.

Planners face the dilemma of determining where to allow growth and where to limit it. If Winder had a Transferable Development Rights (TDR) program, Ledbetter could sell his right to develop his property to another party who wishes to expand the density of another piece of property in the county.

“It’s a market-driven mechanism for handling growth that’s a win-win proposition for landowners,” says Jamie Roskie, managing attorney for the Land Use Clinic at the University of Georgia School of Law, College of the Environment. However, she warns, the devil is in the details. As in all planning, the government usually determines areas in which growth should be encouraged or discouraged.

In TDR, growth areas are designated “receiving zones” and growth-restricted areas become “sending zones.” Those in sending zones can sell their “development credits” (rights) to someone in receiving zones who wants to increase the density beyond their current limitations. Once rights are sold off the land, a conservation easement is placed on it.

The land use plan must designate how many credits exist per acre in sending zones and how many additional units can be added with those credits in receiving zones. Most local governments let the market set the price, and credits can be as valuable as 50 percent of the assessed land value. In almost all TDR programs, the local government administers the process. Some programs are voluntary, although mandatory programs are more successful at containing growth in designated areas.

In Boulder County, Colo., the checkerboard pattern of development in areas that the Comprehensive Plan proposed to preserve as agricultural spurred planners to develop a TDR program in 1995. “A few property owners were concerned because they wanted to increase opportunities instead [of decreasing them],” says Graham Billingsley, planning director for the county. “But the largest concern was that there would not be a market.”

County planners studied other successful programs in the United States, and designed Boulder County’s regulations. After the plan was adopted, demand started immediately, Billingsley says.

Larry Smith, of Longmont, Colo., purchased 31 units to add to the two he already possessed in Boulder County. Part of his acreage already had a conservation easement on it, so the only way he could develop the land was to buy those rights from the county, which had purchased them from other landowners. Purchased over five years, the rights will allow him to develop 33 lots on the parcel.

Not everyone is satisfied with TDR though. Judy Barnes, spokesperson for the Home Building Association of Greater Grand Rapids, Mich., says TDRs make houses more expensive. “Anytime you add $1,000 to the cost of a house, you price out 300,000 people from being able to afford that house,” she says.

Some people think builders absorb additional costs, she says, but they cannot. In addition, “TDRs offer a great opportunity for abuse by the local government,” Barnes says, because the designation of sending and receiving zones can be political.

Despite the complexity and weighty administrative drawbacks, many communities have successful TDR programs. Among the oldest and most studied programs in the country are those in Montgomery County, Md., and the Pinelands in New Jersey. Losing farmland at a rate of 3,000 acres per year, Montgomery County decreased farm acreage loss by 92 percent in the first decade of its program. The Pinelands’ program was designated a U.S. Biosphere in 1979 and covers 1.1 million acres and has successfully protected the land from development for 25 years. “They (TDRs) are becoming more popular,” Roskie says, “because there is a lot more development pressure in a lot more places.”
— Linda Marie Jones is an Atlanta-based freelance writer.