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Transfer of Development Rights (TDR)

Transfer of Development Rights (TDR). Transfer of Development Rights. A way of dealing with rights instead of land. possession exclusion transfer compensation economic gain. Transfer of Development Rights. TDR creates an incentive-based approach to land conservation

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Transfer of Development Rights (TDR)

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  1. Transfer of Development Rights(TDR)

  2. Transfer of Development Rights • A way of dealing with rights instead of land • possession • exclusion • transfer • compensation • economic gain

  3. Transfer of Development Rights • TDR creates an incentive-based approach to land conservation • Conserving farmland and / or open space • Sensitive areas • Green belts • No mandates for implementation • A framework for a market-based approach to protecting land from excess development

  4. Transfer of Development Rights • Requires enabling legislation of some sort in most states • State delegating power to localities • Localities then create a market • The market consists of rights to develop • These rights are transferred from seller to buyer • The market is managed either by the locality or by a broker designated by the locality

  5. Transfer of Development Rights • Basic Elements: Sending and Receiving Areas • Sending Areas • Areas intended to be preserved • Area may or may not be restricted through zoning or other development regulation • Owners in sending areas sell all or some of their rights to develop • The economic gain from sale compensates owner for restricted land use regulation • A deed restriction prohibits development on subject property permanently

  6. Transfer of Development Rights • Basic Elements: Sending and Receiving Areas • Receiving Areas • Areas in which purchased development rights are exercised • Intended to focus development in critical areas (redevelopment, growth centers) • Development rights allow purchasers to go beyond existing land use regulations

  7. Transfer of Development Rights

  8. sending receiving

  9. sending receiving

  10. Transfer of Development Rights • What makes a TDR program effective? • Ease of Understanding • Managed Growth • Adequate Incentives • Careful Management

  11. Transfer of Development Rights • Ease of Understanding • Simple for everyone to understand • Buyers, sellers, citizens at-large: all participants • Creates strong political commitment • Takes time to become successful • Must be mandatory rather than voluntary

  12. Transfer of Development Rights • Managed Growth • Must be part of an overall comprehensive planning process • Vision of future • Strong (some say inflexible) zoning ordinance • Fit TDRs into public’s expectations • Plan must include rational areas for sending and receiving development rights (to include not only patterns of development, but infrastructural support for that development)

  13. Transfer of Development Rights • Adequate Incentives • Incentives for “senders” to sell their rights • Value should be predictable • Incentives for “receivers” to buy rights • Development rights should be easier to obtain than variances or special use permits

  14. Transfer of Development Rights • Careful Management • Transactions • TDR Bank • Setting “floors” during slow economic periods • Providing a broker through which unsophisticated sellers and buyers can do business • Land use terrain • Public Relations

  15. TDRs in Practice • Pinelands, NJ • Regional authority • Pinelands Commission

  16. TDRs in Practice • The Pinelands

  17. TDRs in Practice • Pinelands Commission • Regional Agency in S.E. New Jersey • Jurisdiction over 52 municipalities and 7 counties • Required a Comprehensive Management Plan (CMP) • Developed an inter-municipality density exchange • 1996 amendment to Municipal Land Use Law

  18. TDRs in Practice • Pinelands, NJ • Allows developers to meet minimum lot size & density requirements • Uses off-site lands as sending areas (“out lots”) • Density sent to receiving areas (“mother lots”) • Used in place of variances • Used within and between zones in the commission’s jurisdiction

  19. TDRs in Practice • Pinelands, NJ • Receiving areas • Should be next to or within already developed areas • Should be near existing infrastructure • Should not be located in environmentally sensitive areas

  20. TDRs in Practice • Pinelands, NJ • Sending Areas • Localities determine what they want preserved • Scattered preservation not advised • Encourage diversity of sending property owners

  21. TDRs in Practice • Pinelands, NJ • Maintenance of out parcel • Use on lots is diminished / limited but not banned completely via TDRs • Agriculture, forestry & passive recreation encouraged • May need to link sending and receiving lots via ownership (by deed)

  22. TDRs in Practice • Pinelands, NJ • Tax Complications • How liable is the owner of the “mother lot”? • Who acts as steward for “out lot”? • Neighbor • Neighborhood • Conservancy group • Satellite parcels may be linked by tax office

  23. TDRs in Practice • Pinelands, NJ • Easement vs. Fee Simple Purchase • Fee Simple ownership is outright ownership • Good for parcels owned by individuals • Bad for parcels owned by groups (POAs, HOAs) • Easements • Difficult to manage, because rights are split between legal entities

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