Thursday, February 14, 2008

Possible Light at the end of the Sprawl Tunnel...Take 2

Ok, it is time to resurrect the blog.

Last night during the Chesterfield County BOS meeting, I shared my thoughts on TDR programs and comprehensive planning with the new board. It isn’t that I had nothing else to do; this topic is near to my heart and has a ton of potential. I gave the BOS members a copy of the 2007 VAPA (Virginia Chapter of the American Planning Association) “Tool Kit” for growth management. This handy document is in its third year of publication and explains the various tools currently available to localities. It is available at:

I also gave them a boatload of information on TDR programs throughout the country. As for planning, it seems like the one concept all of the stakeholders in Chesterfield are willing to champion is the “County-wide Comprehensive Plan”. Finally!

As in most localities that offer a wonderful quality of life, we have growth related issues. We have had them for decades. As we begin the process of putting our comp plan back together, I think we should be clear on dividing infrastructure responsibilities between the county and the private sector and implement a process that reflects where we want to be in twenty years. We could do this with a few fundamental principles. These principles have been around for years and some are currently used, in differing forms, in other localities (Yes, I realize some of this would need to acceptable to VDOT)

1. Commission an independent economic analysis to study the relationship between proffers, impact fees, planned improvements, and real estate taxes as they relate to total county revenue and development. We need to open the books and examine the true, non-politically motivated numbers for service levels and costs. (I served on the Chesterfield County Impact Fee committee, and this was one of the committee recommendations we made)

2. Designate “Primary Service Areas” (PSA) that have adequate infrastructure for new development. The county should be responsible for providing the necessary infrastructure so these areas are able to accept new development. (This is sometimes referred to as infill) If a locality does not want to go down the “UDA” route, this is a logical alternative notwithstanding state transportation funds.

3. If an application is filed within the PSA, the developer’s responsibility would be to work with the existing communities and proffer conditions to benefit both.

4. If an application is filed outside of the PSA, the developer would need to submit an “Impact Mitigation Study” (name it whatever you want) that would identify current and projected service levels within a defined sphere of influence. (The 527 regs could be used as guidelines.)They would need to submit a plan to maintain or improve the levels of service that would become insufficient based on the proposed development.

Between VDOT and the General Assembly, most of these requirements are going to be necessary anyway. If the real intention behind the current and pending requirements is to make wise use of public funds, some form of the procedure above should be workable.
AND it would make the process predictable to everyone. Amen

Last year, I posted some information on TDR programs. Because the topic is still near to my heart, and could be used in PSA’s I edited it a bit and included it with this post.

The way I see it, residents want to continue the high quality of life we enjoy, the development community wants to be able to do business, the business community needs flexibility in site location, and the county finds itself struggling to maintain a standard level of service for public facilities and services. A study in Loudoun County found that the cost to provide services to farms was $.50 of every dollar. In contrast, the cost to provide those services to residentially developed land was $1.55. This presents several challenges.
Other communities are experiencing a stronger rate of growth than Chesterfield. However, if you live in Chesterfield, that fact is of little importance.
I have done extensive research on TDR programs and the benefits they offer far outweigh any potential adverse perceptions. The General Assembly amended the enabling legislation last year, and they are currently considering a joint sub-committee to study amendments to the legislation that would make the programs more attractive to localities.

TDR programs have an interesting history. The density transfer concept evolved from clustering. In 1961, Gerald Lloyd published an article for the Urban Land Institute proposing the new technique. Rather than clustering the development on a single property, the transferring of development rights would allow developers to concentrate development on other properties that were better suited for the additional density. The first TDR program, New York City’s Landmark Preservation Law, was adopted in 1968. It prevents the alteration or demolition of historic landmark structures but it allows the property owners the option to transfer unused development rights to adjacent sites. Under this law, the city’s Landmark Preservation Commission denied permission to build an office tower on top of grand Central Station, a designated landmark. The developer sued the City, claiming the law had taken its property. This lawsuit was the basis for the first Supreme Court ruling on property rights in over 50 years. The court ruled that the city had not taken Penn Central’s property rights, and furthermore, gave legitimacy to TDRs by finding they “Undoubtedly mitigate whatever financial burdens the law has imposed on appellants, and, for that reason, are to be taken into account in considering the impact of the regulation.”
This ruling, and others that have followed, show these programs are enforceable when they are thoughtfully created. TDR programs can be used to:

Preserve open space, farmland, historic structures, and environmentally sensitive areas.
Promote revitalization in older communities
Promote Economic Development ( both land uses and site locations)
Provide Affordable Housing
Save money (and in some cases) earn revenue for the locality.

Landowners can choose to use the TDR program where the sending site owner places certain deed restrictions specific to the future development of the property (density and use). Once the deed is recorded, the sending site owner is able to sell a commodity created by the program. The commodity is the development right itself, and it is valuable enough to allow those landowners to realize expected profit without the time and money spent navigating the system. It also allows sending sites with non-development potential (farming and forestry) to continue to receive that income.
The most notable of locally governed TDR programs is in Montgomery County, Maryland. They began their program in 1981 and have protected more than 43,000 acres of farm land and open space. One developer was able to purchase 637 development rights from various landowners. He was then able to expand his development on the receiving site from 200 units to 1200 units, revitalize an older community, and preserve land.
The program has a 5:1 ratio for transfer and some have a bonus credit as well. This ratio provides strong incentive to landowners to participate in the program.
In New Jersey the program is regional, spanning seven counties and 56 municipalities. They have preserved over 31,000 acres of land within the 1.1 million acre area. A Commission controls the program, and its primary purpose has always been environmental protection.
Another successful program in Boulder Colorado is slightly different. Landowners sell their development rights to other landowners and place a conservation easement on their property. The county then purchases the property at a reduced price that reflects the agricultural value of the property. Sometimes, the county sells the property to area farmers and retains the easement. In addition, the county grosses roughly $350,000.00 annually from various leases.

There are over 100 programs operating throughout the country and there are many variations on the common theme. Ordinances and comprehensive plans are written to support the program and residents and developers alike can count on the governing bodies sticking to the plan. The Brookings Institute published a paper on the topic and listed several components to any successful TDR program.

Viable receiving areas- Areas that have adequate infrastructure, that can support a higher density have to be thoughtfully evaluated.
Balance between demand and supply- The program must be incentive based, and offer a range of benefits.
Sustainable, suitable sending areas- Areas under immediate threat of development, such as land abutting new highways isn’t practical and will have a value that is too high, forcing allocation rates. Fortunately, our comprehensive plan, and proposed revisions, has selected key areas to be shielded from development.
Strong Incentives for landowner participation- Successful programs allocate sufficient TDRs in the sending area so that the credits remain affordable for receiving area developers, and also provide sufficient compensation to sending area developers.
Presence of clearinghouses or banks-Some programs are coupled with nonprofit banks to aid in market stabilization. Virginia offers various programs that could possibly be used.
Low transaction costs- This is another place an expensive fee isn’t good. Sometimes, local real-estate markets take the administrative costs as part of a land transaction.
Unwavering support and promotion from the locality- The development community needs to understand that the land use plan WILL be followed for those who elect not to participate. This helps provide incentive, and encourages land use decisions that are predictable.
Strong Community support- The residents in the receiving areas need to understand the program and any potential impacts it may have. If an area is properly suited, a basic land use workshop to educate residents is usually successful. They will be more supportive of something they understand.

Some localities choose to partner a TDR program with mitigation banking and/or various types of governmental or nonprofit land banks that boost incentive by acting as intermediary for purchasing, holding, selling, or retiring large amounts of development rights to stabilize the market. There are countless choices and an abundance of resources to choose from. The business community could benefit as well by partnering with different organizations in developing the program. When growth patterns are predictable, the business community has a better opportunity to locate in close proximity to target market areas.
Due to the importance of accurately assessing the value of land in a program of this nature, several different methodologies have been formulated and can be modified to reflect the needs of individual localities. Likewise, ordinances have been adopted that mirror the intention of a sound program and can be tailored to meet to local needs.

These tools provide the opportunity to protect valuable resources and develop in a healthy, managed way. What are we waiting for?