Putting the Pieces Together

Example: Calvert County, Maryland

In 1976 a committee was created to review options for preserving land in response to rapid population growth in the early 1970’s. The options they reviewed included downzoning, conservation easements, and transferable development rights. Around the same time University of Maryland wrote a paper suggesting that whichever options were adopted should be equitable to all landowners. The options were presented at a series of farmers meetings after which 80% voted in favour of a transferable development rights program.

It was felt that such a program had to be designed by the people who would be using it. The government provided the framework and then the community built the program. In Calvert County’s program they downzoned the entire county and then only allowed densities to be increased on receiving areas by using TDRs. There was also a decision that there would be no rezoning anywhere. The result of this is that there was an automatic market for TDRs.

In the late 1990’s the county completed a build out scenario that looked at population growth and land use change over time if all possible building sites were used. A mail out survey was sent to all county residents in which all agreed that the results of the build out scenario showed too much development relative to the vision of what they wanted for their county. County wide downzoning was approved from one unit (or home) per five acres to one unit per 10 acres. In 2003 another downzoning was implemented to one unit per 20 acres.

The Program

A group of volunteer citizens form the Agricultural Preservation Advisory Board (APAB) which promulgates rules, develops procedures and reviews all applications. To participate in the program, a landowner applies to the APAB to have their land designated as an Agricultural Preservation District (APD). Land zoned as Farm and Forest District by the County or located in a Designated Agricultural Areas by the APAB are priority preservation areas. Land outside of the priority areas may still be eligible, but needs to meet higher standards. All applications are reviewed based on soil classification and quality, as well as suitability for cropland and/or managed forestland. Once accepted as an APD, the numbers of TDRs the land owner can sell are determined based on preset criteria. A sale of any TDRs permanently preserves the land and covenants are recorded. If no TDRs have been sold, a sending site can be removed from the APD after five years, with one years notice to the given to the APAB.

The owner of a designated sending site retains the ability to build up to three houses (one house / 25 acres to a maximum of three houses). When in the program the APAB reviews and approves the house and road locations. Building in the program is a simpler process than on land not participating in the program. Another benefit to entering the program as a sending site is that sending areas in the program are only taxed based on the residences on the land; the farm land is not taxed. The prices of TDRs in Calvert County are determined by supply and demand in a free market. Five TDRs are required to build one unit.

Key Lessons

Though one of the oldest and most successful programs in the country, Calvert County’s program is not without criticism. There was some concern expressed that the program has changed focus from agricultural land preservation to growth management (i.e., managing sprawl). Though the two are compatible, some stakeholders felt that if the focus was now on changing the nature of development there are other tools that can be combined with TDRs to better manage growth, such as “town centre planning” and promoting walkable, mixed-use town centers to establish a sense of community and provide a variety of housing choices for local residents.

Although the market price of TDRs had evolved to an acceptable price for both landowners and developers involved (about $4500), in 2004 the County entered the ‘development right’ market directly. The County chose to start purchasing and extinguishing rights to more actively protect open space, and ultimately bought rights at $9000, effectively setting the market. There was also concern expressed that using public money in a program established on the grounds of private conservation was inequitable and may have negative implications on affordable housing in the county (with 5 credits required to add an additional housing unit, the TDR program could add $45,000 to the purchase price of a house).

Since the TDR value is a factor of supply and demand in the TDR market rather than the agricultural or speculative land price, there was also discussion about the possibility of combining other options with the TDR program to ensure the landowner receives the full equity potential of their land if deed-restricting it. For example, ‘layering’ of conservation easements granted for different purposes (agricultural, forestry) would allow landowners to receive multiple payments for restricting multiple land values.

Results

As of 2007 Calvert County has preserved over 25,000 acres out of their goal of 40,000 through state and county programs. Out of the 25,000 acres already preserved more than 17,600 acres have be preserved through the TDR program.