|Conservation Tools: Transferable Development Rights - Conservation Easements - Conservation Subdivisions|
TRANSFERABLE DEVELOPMENT RIGHTS
Under a TDR program, development rights are transferred from "sending zones" which are designated for protection to "receiving zones" which are designated for future growth. Conservation easements provide permanent protection from development in the sending zone.
In 1998 the Georgia General Assembly passed legislation which authorizes local governments to implement TDR programs. These programs have been used successfully in other jurisdictions to preserve important agricultural and ecologically sensitive lands and historic landmarks; to stimulate economic growth; and to manage urban development.
HOW TDR PROGRAMS WORK
When a property owner in the receiving area purchases the development credits, he is allowed to expand development bevond current limitations. Typically the buyer is either a residential developer, who can build houses on smaller lots with development credits, or an industrial or commercial developer, who can increase the floor size of the work or sales area on the lot as dictated by the number of credits purchased (up to a specified minimum). In a successful program, the TDR credits are worth more to the seller than the unused development potential of the land and the buyer's profit from the increased development exceeds the costs of the TDR credits.
SELECTING THE SENDING AREA
The most successful TDR programs are mandatory. These programs restrict the land use in the sending area by down zoning property. Agricultural property, for example, may be down zoned from five acre lots to 25 acre lots. Under an optional TDR program, the local government does not down zone the property. Landowners in the sending areas may continue to develop their property into five acre lots, or they may sell their development credits and voluntarily limit development on their land.
Regardless of whether the program is mandatory or optional, the local government assigns land in the sending area a certain number of credits. In many programs this is a fixed value, such as one credit per five acres. This is effective when all land has roughly the same conservation or resource value. Under the mandatory scenario described above, for example, the owner of a twenty-five acre parcel would be given five development credits. He may use one credit to build a house on the agricultural land and sell the remaining four for use in a receiving area, or he may sell all five credits and permanently prohibit all dwellings on his land. Alternatively, a TDR program could assign a higher number of credits for more sensitive or valuable lands. For example, forest might be valued at one credit per acre while wetlands might be valued at 1.5 credits per acre.
SELECTING THE RECEIVING AREA
A two-tier zoning structure is established for receiving areas. The base zoning level is that level of development permitted without development credits. The upper zoning tier reflects the maximum development density allowed with the purchase of development credits. Generally this upper tier should be the development density indicated in the community's future land use map.
Overzoning must be avoided when establishing receiving areas. If, for example, a community's downtown is already zoned for industrial or commercial development beyond which the market can bear, there will be no demand for development credits. If there are multiple receiving areas, it must be determined if credits will provide uniform increases in development for each of these areas. Uniform increases are simpler but may result in uneven demand if one receiving area is substantially more attractive than others to developers. Whether this is a problem depends on the purposes and interests the TDR program reflects.
The local government must decide whether denser development in the receiving area is allowed only through the use of TDRs. Developers with other options, such as rezoning, may choose the more traditional and familiar method even if purchasing development credits would be more profitable. The valuation of development credits is left up to the free market. Price is generally determined by the number of credits assigned per acre in the sending area, the number of acres in the sending area, the demand for increased development in the receiving area and the amount of development in the receiving area that each credit permits. If methods other than purchasing development credits tan be used to increase density in the receiving area, the value of the credits will also be influenced by developers' preference for TDRs versus other methods.
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