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TDC101 Putting the Pieces Together

Example: Montgomery County, Maryland

Montgomery County has one of the oldest TDR programs in the country. After WWII there was substantial population growth in Montgomery County and it was starting to have an impact on the land use which was primarily agricultural. In 1956 a preferential tax system was introduced to assess the land at its agricultural value instead of development potential to help encourage landowners to keep their land in agriculture.

Early on in the program the county considered the amount of development possible if the pace of land use change did not slow down. They figured that 3,000 – 5,000 acres could be developed each year. By putting in an Agricultural Land Reserve (ALR) and establishing a TDR program only 6,000 acres have been developed in the last 25 years.

When the ALR was established the zoning was changed from allowing 1 unit / 5 acres to allowing 1 unit / 25 acres. In an effort to make the downzoning fair a TDR program was implemented that allowed the landowner to sell the development rights that they could no longer develop as a result of the downzoning (e.g., before the downzoning a landowner with 100 acres could develop 20 units; while after the downzoning they could only 4 units therefore the remaining 16 units would be available as TDRs). All land in the ALR became the sending area in the program and all acres were treated equally with respect to how many development rights could be sold on each property regardless of landscape features.


Unlike all other programs that we visited the program is administered by two separate groups - the sending areas are administered by Agricultural Services while the receiving areas are administered by the Planning Department. To enter the program a landowner would place a conservation easement in favour of the county on their property. The landowner can sell any number of development rights at any time. Each TDR is given a serial number as it is created and registered on title. All future TDRs on a property reference any previous TDRs sold on that property. The landowner can also sell the TDRs for the “allowed” units (1 unit / 25 acres) except for one building lot.

Receiving sites are chosen based on existing infrastructure (e.g. roads, water, sewage, etc.). Developers can choose not to purchase development rights but then must use current zoning and cannot increase density. By purchasing development rights a developer can increase the density of their project by up to 20% or higher if doing a condo or garden apartment project.

Key Lessons

There have been some low activity times in the program when there were not sufficient receiving sites for the TDRs being sent. For that reason, it was recommended that there be twice as many receiving sites available as there are sending sites thereby creating a market for TDRs.

Until now TDRs have only been used in residential developments. The county is considering a Building Lot Termination (BLT) program where landowners could sell the remaining building lot for mixed use zoning developments – e.g. commercial, industrial, retail, etc.

Montgomery County has two tax programs through which public funds support land conservation programs - the “Agricultural Transfer Tax” and the “Real Estate Transfer Tax”. Each was voted in by the public and fund “Purchase of Development Right” program and an “Open Space” program, respectively.

Montgomery County also has a Conservation District certify stewardship plans to help land owners become better land managers, dealing with such things as off-stream watering, grassed waterways, fertilizer and pesticide management, etc.

In Montgomery County conservation easements can be “layered” meaning a landowner may have sold their TDRs to protect the agricultural land base, but still have some forested area on their land that could be logged. They can then sell a conservation easement on the forested area. Many landowners who layer conservation easements work with a consultant to help them keep track of all the programs that are available, and can work with farmers to help them maintain the agricultural value of their land while realizing other economic benefits.

One point raised was that these programs need to look at agriculture as a resource, with the underlying assumption that once the land is protected, the industry will take care of itself. For instance many of the farmers in Montgomery County farm 3,000 – 5,000 acres while they may only own about 200 acres. The ALR and TDR program have set up a situation that is very conducive to rental agreements for farmland, thus keeping more land in agriculture.

The vision of Montgomery County was very clear to protect agricultural land The ALR and TDR program do this very well. To encourage a more sustainable agricultural industry the county offers other programs such as a farmer’s markets registry to promote the local industry, and management plan services which can promote best management practices.


With a goal to protect 93,000 acres of agricultural land, Montgomery County has secured nearly 49,000 acres through the TDR program. This added to the acres protected in other preservation programs results in almost 65,000 acres in total protected from residential development.



What is a TDC Program?

The Why, What, How and Who's of TDCs

Miistakis Reports

Government of Alberta


Papers and Reports

Web Resources



Support Organizations and Consultants

American Examples

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Also, check out our full list of TDC Resources.