LIBRARY
MIchIgan State
Unlverslty

 

 

 

PLACE IN RETURN BOX
to remove this checkout from your record.
TO AVOID FINES return on or before date due.

DATE our: ! DATE DUE DATE DUE
1381* 1 9' gt

if“ 1 h ‘
:1 21555523 5% '

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1M chleGS-p.“

 

 

TRANSFERABLE DEVELOPMENT RIGHTS AS A GROWTH MANAGEMENT
TECHNIQUE IN LANDSCAPE MANAGEMENT: A CASE STUDY APPROACH

VOLUME 1

By

Patricia L. Machemer

A DISSERTATION

Submitted to
Michigan State University
in partial fulfillment of the requirements
for the degree of

DOCTOR OF PHILOSOPHY

Department of Resource Development

1998

ABSTRACT
TRANSFERABLE DEVELOPMENT RIGHTS AS A GROWTH MANAGEMENT
TECHNIQUE IN LANDSCAPE MANAGEMENT: A CASE STUDY APPROACH

By

Patricia L. Machemer

Land use determines how the landscape appears and how it functions economically,
socially and environmentally. Land use issues that are associated with sprawl, a low-density
growth pattern, are becoming increasingly apparent. Existing tools have proven ineffective in
preventing the encroachment of urban development on rural lands. In theory, transfer of
development rights (TDR) as grth management tool can address some of the failures of
existing techniques. Transfer of development rights involves the buying of development rights
and the transfer of those rights from the restricted property to another property where they enable
additional development. The use of TDR has been avoided due to its perceived complexity. The
theoretical literature on the TDR programming is limited. Additionally, given the minimal use of

TDR programs and the youthfulness of these programs, the applied literature is limited.

This study advances the theory of TDR and illustrates its potential use in a Michigan
context through simulation modeling, thereby diminishing its complexity and promoting greater
understanding of TDR programming in landscape management. This study uses an exploratory
multiple case study approach to identify important characteristics of TDR programming that
indicate program success or failure. Additionally, an explanatory comparative case study was
undertaken to test the hypotheses and propositions about the role of TDR characteristics. Once
tested, these hypotheses and propositions were developed into decision rules for a simulation

model that Michigan communities can employ to investigate the use of TDR to achieve

economically, environmentally and socially sustainable communities. Using the model,
communities can study within their local context the effects of TDR program characteristics,
relative relationships between characteristics and their overall relationship with program success
in landscape sustainability. Model output includes statistical and graphic representations of the

resultant landscape and illustrates the spatial and temporal effects of a TDR program.

Transfer of development rights programming is a private market alternative to managing
community growth and preserving resources. This study has examined the use of TDR to protect
open space and agricultural land and reduced this policy’s complexity through tangible examples
and the simulation model. It is important because communities are contending with the loss of
economically, socially and environmentally valuable lands at the hands of uncontrolled
development. As communities increase in population and the resident’s density requirements
continue to rise, growth and urbanization result in further degradation of the landscape. While
development must continue, sprawl need not. An understanding of TDR and its concepts can
offer communities facing this pressing land use issue with an alternative. This study assists
communities in making an educated decision on whether TDR or elements of TDR are an

appropriate alternative.

Copyright by
Patricia L. Machemer
1998

In dedication to Papi who emphasized through words
and action the value of knowledge and education.

ACKNOWLEDGEMENTS

This study would not have been possible without the assistance of my committee, Dr. Jon
Bartholic, Department of Resource Development, Dr. Stuart Gage, Department of Entomology,
and William Rustem, MS, from Public Sector Consultants. Dr. Tom Edens, without whose
immense help and support this project would not have been completed, chaired the committee.
John Koches, Rod Denning, Christy Klinge and Amy Toering at Grand Valley State University’s
Water Resources Institute provided data and technical support. Additional data and inspiration
were provided at the Institute of Water Research. Dr. David P. Lusch and William Enslin from
the Center of Remotes Sensing and Geographic Information Sciences provided technical access
and helpfiil insight. I would also like to acknowledge Terry Brown, Department of Landscape
Architecture at the University of Michigan, who was willing to discuss my research long after I
sat in his class. Finally, I thank Brian whose constant support has allowed me to reach my goal.

vi

TABLE OF CONTENTS

Chapter 1 Introduction

The Problem .......................................................................................... 1
Research Purpose and Setting ................................................................ 5
Overview of Research ........................................................................... 9
Research Questions and Propositions ................................................... 13
Research Assumptions ......................................................................... l4
Implications of the Study ..................................................................... 15

Chapter 2 Landscape Management and Ecology

Introduction ......................................................................................... 16
Landscape Perceptions and Definitions ................................................ 16
Landscape Design and Planning ........................................................... 22
Landscape Management ...................................................................... 26
Why Landscape Management is Appropriate ................................. 28
Requirements ................................................................................ 26
Landscape Management in Relation to Landscape Ecology ............ 30
Landscape Ecology .............................................................................. 34
Introduction .................................................................................. 34
History .......................................................................................... 37

Landscape Ecology Concepts Applicable in Landscape Management... 42

Holism, Hierarchy and Overlapping Systems ................................. 42

vii

Landscape Characteristics: Structure, Function and Change ........... 45

Scale Dependency of Landscape Characteristics ............................ 49
Changes in Landscape Characteristics- Fragmentation ................... 50
Role of Advanced Technology ...................................................... 51
Chapter Summary ................................................................................ 52

Chapter 3 Land Use

Introduction ......................................................................................... 54
Land Use ............................................................................................. 54
Defining Land Use ........................................................................ 54
Why Land Use Issues Are Difficult to Address .............................. 56
Why Land Use Issues Must be Addressed ...................................... 57
History of Land Use Control ................................................................ 59
Settlement to Early 18005 .............................................................. 59
18305 through 19205 ..................................................................... 6O
Depression Years through 19305 ................................................... 62
19405 through 19505 ..................................................................... 63
19605 to Present ............................................................................ 63
Regulatory Context .............................................................................. 64
Land Use Trends ................................................................................. 70
Michigan Land Use Trends .................................................................. 72
Michigan Land Use Issues ................................................................... 74
Sprawl: A Critical Land Use Issue ....................................................... 76
Defining Sprawl ............................................................................ 76
Causes of Sprawl ........................................................................... 77
Effects of Sprawl ........................................................................... 79
Growth Management as a Method to Address Sprawl .......................... 80

viii

Growth Management Techniques ......................................................... 81

Zoning .......................................................................................... 81
Open Space Zoning ....................................................................... 82
Agricultural Preservation Techniques ............................................ 82
Purchase of Development Rights ................................................... 83
Mitigation ..................................................................................... 84
Urban Growth Boundaries ............................................................. 85
Concurrency .................................................................................. 85
Cluster Development ..................................................................... 86
Limitations of Techniques ................................................................... 87
TDR as an Option ................................................................................ 87
Economic and Environmental Balance ........................................... 87
Private Property Rights ................................................................. 88
Land Market System ..................................................................... 90
Michigan’s Home-Rule Structure .................................................. 90
Chapter Summary ................................................................................ 90

Chapter 4 Methodology

Introduction ......................................................................................... 92
Study Overview ................................................................................... 93
Unit of Analysis .................................................................................. 93
Case Study Methodology ..................................................................... 94
Appropriateness of Qualitative Research .............................................. 96
Research Design: A Study in Three Parts ............................................. 97
Part 1: Exploratory Case Study ...................................................... 97
Research Questions ................................................................. 98

Case Selection ......................................................................... 99

ix

 

 

Data Collection ....................................................................... 99

Data Display ......................................................................... 100
Data Reduction ..................................................................... 100
TDR Index Development ...................................................... 101
Part 2: Explanatory Multiple Comparative Case Study ................. 102
Research Questions ............................................................... 105
Case Selection ....................................................................... 105
Data Collection ..................................................................... 106
Data Display ......................................................................... 107
Data Reduction ..................................................................... 108
Part 3: TDR Simulation Modeling ............................................... 109
Research Questions ............................................................... 110
Alpine Township Study Area ................................................ 110
Data Collection ..................................................................... ll 1
Data Analysis ........................................................................ 1 l 1
Data Summary ...................................................................... l 13
Chapter Summary .............................................................................. 113

Chapter 5 Transfer of Development Rights

Introduction ....................................................................................... 115
Transfer of Development Rights Program Definition ......................... 115
Basic Concept ............................................................................. 116
Advantages and Disadvantages .................................................... 116
Relationship with Familiar Grth Management Techniques ...... 117
Main Elements .................................................................................. 119
Sending Area .............................................................................. 119
Receiving Area ........................................................................... 120

Relationship Between Sending and Receiving Areas ................... 122

Development Rights Allocation Method ...................................... 122
Transfer Procedure ...................................................................... 127
The Roles ofa TDR Bank .................................................................. 128
Mandatory Versus Voluntary ............................................................. 130
History of TDR ................................................................................. 132
Theoretical Development ............................................................ 132
Program Development ................................................................. 134

Chapter 6 Legal Aspects

Introduction ....................................................................................... 140
Property Rights .................................................................................. 140
Defining Property Rights ............................................................. 140
History of Property Rights ........................................................... 141
Legal Aspects of the Bundle of Rights ............................................... 144
TDR Enabling Legislation ................................................................. 145
Legal Basis Beyond Enabling Legislation .......................................... 146
Is TDR a Legitimate Use of Police Power? .................................. 146
Police Power Considerations for TDR ......................................... 149
Zoning as Police Power ............................................................... 149
Zoning Considerations for TDR .................................................. 150
Is TDR a Legitimate Use of Eminent Domain? ............................ 152
TDR as a Hybrid ......................................................................... 155
Case Law .......................................................................................... 156
French v. City of New York (1976) ............................................. 156
Penn Central v. City of New York (1978) .................................... 157
Aptos Seascape Corp. v. County of Santa Cruz (1982) ................. 159
xi

 

 

Corrigan v. City of Scottsdale (1985) ........................................... 160

Barancik v. County of Marin (1988) ............................................ 162

West Montgomery County Citizens Assoc. v. Maryland- ............. 163
National Capital Park and Planning Commission (1987)

Suitum v. Tahoe Regional Planning Agency (1997) ..................... 164

Chapter Summary .............................................................................. 166

Chapter 7 Exploratory Case Studies

Introduction ....................................................................................... 167
Buckingham Township, Bucks County, Pennsylvania ........................ 167
Setting ......................................................................................... 167
Planning History ......................................................................... 168
Program Description ................................................................... 169
Status .......................................................................................... 176
Calvert County, Maryland ................................................................. 177
Setting ......................................................................................... 177
Planning History ......................................................................... 177
Program Description ................................................................... 178
Status .......................................................................................... 183
Chesterfield Township, Burlington County, New Jersey .................... 184
Setting ......................................................................................... 184
Planning History ......................................................................... 184
Program Description ................................................................... 185
Status .......................................................................................... 196
Thurston County, Washington ........................................................... 197
Setting ......................................................................................... 197
Planning History ......................................................................... 198
xii

A Cartographic Model ........................................................... 335

Model Findings ................................................................................. 347
Further Research ............................................................................... 352
Chapter Summary .............................................................................. 353

Chapter 12 Discussion and Conclusions

The Research Study ........................................................................... 355
Research Findings ............................................................................. 356
Exploratory Case Study Findings ................................................. 356
Background .......................................................................... 356
Participants ........................................................................... 359
Sending Side ......................................................................... 361
Receiving Side ...................................................................... 362
TDR Allocation .................................................................... 364
General ................................................................................. 366
Explanatory Case Study Findings ................................................ 369
Foundation for TDR .............................................................. 369
Regulatory Process Must Have Sufficient Integrity ................ 370
Sense of Place ....................................................................... 371
Resource Perceived as Valuable ............................................ 371
Rapidly Growing Area .......................................................... 372
Understanding Development Demands and Patterns .............. 373
Viable Receiving Areas ......................................................... 373
Public Support ...................................................................... 374
Political Leadership .............................................................. 376
Mandatory versus Voluntary ................................................. 377
TDR Bank ............................................................................ 379

xvii

PDR/I'DR Linkages .............................................................. 37 9

Simple and Cost-Efficient ..................................................... 380

Simulation Model Findings ......................................................... 381

Integration of Findings ...................................................................... 385
Recommendations for Future Research .............................................. 389

Appendix A Interview Questions .............................................................................. 391
Bibliography .............................................................................................................. 396

xviii

 

LIST OF TABLES
Table 7-1: Chesterfield Township Credit Requirements .............................................. 196
Table 8-1: Manheim Township 1987 Future Land Use ................................................ 231
Table 8-2: Manheim Township 1994 Future Land Use ................................................ 232
Table 8-3 Receiving Area Acreage and Capacity ........................................................ 234
Table 8-4: Value Added by PRD versus a Traditional Development ............................ 242
Table 9-1: Status of Program ..................................................................................... 272
Table 10-1: Pinelands Development Credit Program Allocation of Rights per Year ..... 310
Table 10-2: Letters of Allocation ................................................................................ 310
Table 10-3 Rights Purchased or Transferred ............................................................... 311
Table 10-4: Land Protected through PDCs .................................................................. 312
Table 10-5 Resales and Secondary Transfers of Development Rights .......................... 313
Table 11-1: Model Scenarios ...................................................................................... 334
Table 11-2: Pairwise Matrix for Desirability ............................................................... 339
Table 11-3: Pairwise Matrix for Profitability ............................................................... 339
Table 11-4: Desirability Factor Weights ...................................................................... 340
Table 11-5: Profitability Factor Weights ..................................................................... 340
Table 11-6: Densities per Zone ................................................................................... 345
Table 11-7: Receiving Area Option 1 Base and TDR Bonus Densities ........................ 346
Table 11-8: Receiving Area Option 2 Base and TDR Bonus Densities ........................ 346
Table 11-9: TDR Allocation Rates .............................................................................. 347

xix

 

Table 11-10: Cross Tabulation Results ........................................................................ 349

LIST OF FIGURES

Figure 10-1: Sending Areas ........................................................................................ 294
Figure 11-1: Conceptual Model .................................................................................. 330
Figure 11-2: Cartographic Model ................................................................................ 336
Figure 11-3 Vector Land Use File for Alpine .............................................................. 341
Figure 11-4: Raster Land Use File for Alpine .............................................................. 342
Figure 11-5: New Residential Development ............................................................... 348
Figure 11-6: Sending Area Options ............................................................................. 351

Chapter 1

Introduction

The Problem

The use to which land is put and the intensity of that use determine how the landscape
appears and how it functions economically, socially and environmentally. Here land refers to a
holistic entity; it includes water, flora, fauna and other resources associated with land. These
aspects in total, combined with a human dimension, form a landscape. Landscape management
involves the landscape and its processes including the interrelationships between humans and the
physical and biological elements. Landscape management often involves a balance between
conservation and use, a balance that can only be achieved when both are addressed. Landscape
management provides an opportunity to influence spatial practices and to create new landscape
structures. It is a process of managing transformations of the landscape to bring land use in
harmony with natural processes, based on knowledge of the reciprocal relationship between
people and the land (van Langevelde 1994 p. 29). Land use, more than any other human activity,
affects water quality, sensitive environments, public health, public service delivery, economic
development and community character (MUCC 1993). Land uses may have positive or negative
effects on other uses and ecosystems. Understanding land use issues involves complex
interconnected systems, including social, economic, political, legislative, bureaucratic and
ecological systems. Planners and land use decision makers need insight into how land is utilized,
developed and managed to help them anticipate how the landscape may be used and sustained for

future use and development. Sustainable landscapes maintain both ecological and human systems

2

over time. They require an understanding of natural and social processes and, more importantly,

an understanding of their spatial relationships in a comprehensive way.

Land use issues such as loss of agricultural land, destruction of environmental resources,
abandonment of urban centers, decreased quality of communities and their inherent
interconnections are rapidly moving to the forefront of the state of Michigan’s and local
communities’ agendas. In 1996, over fifty land use bills were introduced (Rustem 1997, Wyckoff
1997, Norris 1997). In 1992, a Relative Risk Analysis report set environmental priorities,
resulting in the ranking of twenty-four important State of Michigan issues. “Lack of land use
planning that recognizes the integrity of ecosystems” was at the top of the list, closely followed
by the “degradation of urban ecosystems” (Rustem 1996, MDNR 1992). Issues associated with
the change of land use from open space and agricultural to residential, especially those related to
land use policies that affect the environment, are of particular importance in Michigan (MDNR
1993). Urban development, in particular residential development, threatens the State’s
agricultural and forest resources. Both agricultural and forested areas have been fragmented,
decreasing the ecological integrity which threatens the function of the natural and human systems

(MDNR 1995).

All of these land use issues are related to urban and exurban sprawl. Sprawl is the current
predominant pattern of growth, characterized by low-density development that extends from
cities into rural area. Sprawl is land and energy consumptive, automobile dependent, requires a
very high ratio of road surface to development served and is often poorly planned on an area-wide
or metropolitan basis (Wyckoff 1997). Results of the Trend Future survey, conducted by the
Institute for Public Policy and Social Research (IPPSR) at Michigan State University, found that
among stakeholder leaders, urban sprawl (11.5%) was mentioned most often as the most

important land use problem facing the state, followed by redeveloping urban areas ( 10.8%),
Chapter 1

3
protecting private property rights (8.1%), and preserving productive farm land (7.4%) (Hembroff

1995).

The Michigan Society of Planning Officials Trend Future Report includes a projection of
1.1 million more people in Michigan between 1990 and 2020. If the present land development
and density trends continue, that expected 11.8% increase in population will result in an increase
of 63-87% in urbanized or developed land (Michigan Society of Planning Officials 1995). The
implications of this increase in urbanized area include 1055 of agricultural, forest and open space
lands; runoff and water quality concerns because of increases in impervious surface;
abandonment of existing infrastructure and existing communities and associated infrastnrcture
costs. In itself this statistic on urbanized land is alarming, but given the importance of land to
Michigan’s economy, the effects may be staggering. Tourism, forestry, mining and agriculture
all rely on the State’s land base. As agricultural land is lost, it becomes more difficult for the
remaining farms to stay in agricultural use. Between 1982 and 1992 the number of farmland
acres converted to other uses was 854,000 (Michigan Farmland and Agricultural Development
Task Force 1994). The effects of urbanization on the agricultural community include 1055 of
prime farmland, reduction in the number of farms, fragmentation of agricultural blocks, loss of
farm support industries and the impennanence syndrome. Loss of open space contributes to the
decrease of wildlife habitat and corridors and diminishing aesthetic values, all of which have a
direct impact on Michigan’s tourism industry. With increased development, runoff and
stormwater management pose physical and economic challenges, particularly when urban
infrastructure is being abandoned. The implications of urbanization go beyond physical
manifestations; there are social consequences as well. Because the dominant low-density growth
pattern excludes lower socio-economic groups from the suburbs and contributes to the
abandonment of urban infrastructure, the poor are forced to concentrate in declining communities

(Downs, 1996). Additionally, sprawl results in developments without communities. No longer

Chapter 1

4

can the end of one community and the beginning of another be detected. The result is a loss of

community character and a decline in quality of life.

Although the effects of sprawl are apparent, government efforts to control this pattern of
low-density growth in developing rural areas have been limited (Daniels 1991). Existing
techniques are inadequate for preventing or slowing the encroachment of urban development on
rural lands. For example, all too often zoning is changed, as is the membership of the governing
body. Allowances and variances result in further unplanned urbanization. Many communities
have no master plan; others have plans that are outdated. Additional techniques that recognize an
economic and environmental balance, private property rights, the land market system and
Michigan’s home rule structure are needed. Land use policies have typically been focused on
either the environment or the economy, failing to recognize their inherent connection. Property
rights are so ingrained in the American perception of land that they must be scrutinized carefully
from both legal and practical standpoints. Policies contrary to the land market will face serious
challenges; policies that work with and within the land market face less opposition. Additionally,
public funds are limited and land control through public acquisition is cost prohibitive. Other
techniques that capitalize on the private market are needed. In states with home rule authority,
through legislation or through practice, the role and power of the local units of government must

be understood.

Transfer of Development Rights (T DR) addresses the limitations of existing growth
management techniques and may offer an altemative. TDR addresses both environmental and
economic goals. It recognizes both private and public rights by treating development as one
aspect of property that can be severed and transferred through the private market. However, TDR
is complex and has seen limited use. This land preservation/growth management technique is

often misunderstood. Therefore this study will focus on TDR as a potential policy to address
Chapter 1

5
growth management. This study will reduce the complexity surrounding TDR, offer insight into

its potential use as an alternative growth management technique and explore its applicability.

Research Purpose and Setting

There are four main reasons for undertaking this research study on transferable
development rights programming. First, TDR is misunderstood. Second, TDR is a relatively new
growth management policy. Third, TDR is a pressing topic in that several Michigan communities
are currently addressing their land use issues, in particular growth management and land
agricultural land preservation. Fourth, as the land resource diminishes further there is a need for

growth management alternatives.

Although TDR has received much attention over the last twenty years as a promising
growth management technique for local and regional governments, the complexity of issues
involved with creating TDR programs remain unknown or misunderstood. This is true even
though the basic concepts of TDR are an extension of such acceptable land use techniques as
cluster development and zoning (Gottsegen 1992). Misunderstanding, in part, led to the failure of
the TDR portions of Senate Bills 573-575, specifically the perception of TDR programming as
too complex and antithetical to Michigan’s home rule governmental structure. Currently many
people view the transfer of development rights as further government involvement. TDR is
perceived as an infringement on private property rights, rather than a growth management
technique that acknowledges and capitalizes on these rights. The main reasons cited for not
investigating TDR use are that it is complex and requires government intervention. Further
explanations, while difficult to acquire, indicate that the basic concepts of transferring
development rights are misunderstood. It is perplexing how advocates of purchase of

development rights perceive TDR as excessive government intervention.

Chapter 1

TDR is a relatively new concept and therefore not well documented. Although TDR was
introduced in the 19705, the theoretical literature needs further development. Additionally, given
the limited number of states with TDR programs in place and the youthfulness of these programs,
many of which were not initiated until the mid-eighties, the applied literature is very limited
(Pizor 1986, Bowers 1997). Even fewer states have enabling legislation for TDR programming.
Only one Michigan jurisdiction, Peninsula Township, is implementing a TDR program.
Additionally, TDR programs involve complex systems, e.g. planning, legal, administrative,
economic and social systems, that are beyond investigator control. Therefore, an evaluation of
TDR programming and its potential for success in Michigan to manage growth requires a closer

examination of existing programs.

A study on TDR is timely, in view of current efforts statewide to address land use issues
in general and specifically growth management. Washtenaw County established an agricultural
lands task force to study agricultural trends and investigate preservation alternatives. Kent
County established a land use committee in the North Kent Township Association to address
issues associated with the growth of the Grand Rapids metropolitan area and the threat on
valuable agricultural lands including the County’s prized orchards. In the Saginaw Bay area, the
Partnership for the Saginaw Bay Watershed has been conducting sustainable land and water use
workshops directed at local planners, developers and community leaders. A multi-county
initiative in the Grand Traverse area is utilizing a grassroots approach in their New Designs for
Growth project. This project provides education and services to northern Michigan communities
interested in sound land use planning. While TDR may not be applicable in all these instances,
the underlying concepts are applicable. Furthermore, the TDR program characteristics identified
are applicable to a wide range of growth management techniques. Communities uninterested in

TDR gain useful knowledge of TDR program characteristics. For example, information on
Chapter 1

7

agricultural awareness and education programs in TDR program communities could be applicable

to many other communities.

The fourth reason for undertaking this study is the need for additional growth
management alternatives. Because urban and exurban sprawl continues to encroach on
agricultural and open space lands, it is evident that mechanisms for controlling low-density
growth are ineffective. Needed are growth management alternatives that recognize an economic
and environmental balance, private property rights, the land market system and Michigan’s home
rule structure. TDR may offer a viable alternative for some communities. The implications of
sprawl have forced communities to examine growth management techniques that permit growth
while protecting the environment. While economic development and environmental protection
are often viewed as mutually exclusive, TDR programming as a growth management technique
can address both goals (Roddewig and Inghram 1987, Fluharty 1997). Economic development
goals include encouraging responsible development in an appropriate spatial context, maintaining
and enhancing agricultural viability, maintaining land values and cost efficient allocation of
infrastructure. Environmental goals include providing enough land for aquifer recharge,
maintaining and sustaining wildlife habitat and minimizing land fragmentation. A TDR program
is intended to maintain designated areas in undeveloped use while transferring those development

rights to other areas where development is desired.

The conflict between public and private interests evolves from an inherent contradiction
in the social needs that land serves and the private rights of ownership and control of land
(Foglesong, 1986). Growing development pressures and the diminishing land resource base has
exacerbated the conflict. TDR provides a means of achieving a community’s comprehensive
long-range goals (public interests) while accommodating development (private) interests (Pizor

1986, Gottsegen 1992). Such programs recognize the value of a community view of property over '

Chapter 1

8
an individual view of property. The conceptual key to TDR’s is the notion that the right to

development in the bundle of sticks representing land ownership can be separated from the other
ownership rights and made transferable (Rose 1975, Hagman and Juergensmeyer 1986, Barlowe

1986)

In severing development rights from the bundle of rights and exchanging rights in a free
market system, TDR programming avoids significant public expenditure. While some techniques
that seek to protect lands from development involve fee simple land purchase, this may lead to
significant costs to local and state governments where development pressures are most pervasive
(Burchell 1997). TDR programs allow the exchange of separate property rights without fee
simple acquisition. The value of a development right is established on a free market basis in a
willing buyer/willing seller setting. The developer will pay only what is determined to be the
economical benefit to the developer of the additional development (Skjaerlund 1997). TDR
programming offers a market-driven and incentive-based altemative, which in conjunction with
other land use planning techniques may lead Michigan communities to a more economically,

environmentally and socially sustainable future.

Historically, American land has been managed at the local scale with an absence of
cooperative planning. Michigan has approximately 1800 planning entities that typically make
land use decisions in isolation (Americana Foundation 1992). Given Michigan’s home rule
structure, combined with the absence of a state land use plan, local communities are forced to
address growth management on a township basis. However, the influences of sprawl as well as
the consequences may cross multiple jurisdictions. A growth management technique that can be
implemented at the local and regional levels could prove useful in redirecting development
patterns and trends. In other states, TDR programming has been implemented at the township,

county and regional levels. Because a top-down approach is not yet apparent in Michigan and

Chapter 1

9

local communities have limited resources, a better understanding of TDR programming and its
characteristics is needed. In providing this understanding, local communities can focus their

limited resources to best achieve their growth management objectives.

Overview of Research

This research study is composed of three parts. The first part will be an exploratory
multiple case study using documents on transfer of development rights (T DR) theory and
programs in the United States. The purpose of this part of the study is to advance the theory of
TDR to develop hypotheses and propositions and to identify important characteristics of TDR
programming that indicate program success or failure. In the second part of this study, an
explanatory comparative case study using documentation, interviews and fieldwork from three
program cases was undertaken. The purpose of this second part is to test hypotheses and
propositions about the role of TDR characteristics, and develop them into decision rules for a
simulation model. In the third and final part, a model for TDR scenario analysis was developed
to study TDR concepts and program characteristics within a Michigan community context. Using
local data and decision rules from the study’s second part, the model was developed. The
purpose of the simulation model is to assist local communities in understanding and analyzing the
TDR concept. With it Michigan communities interested in potential TDR programs can examine
the effects of the characteristics, the relative relationships between program characteristics and
program success in landscape sustainability. Local communities can then compare the importance
of the characteristics in their local context, helping them decide where to focus their limited

168011 {068 .

While there is a body of literature regarding the theory of TDR (Chavooshian et al 1973,

Coughlin 1981, Roddewig and Inghram 1987, Redman/Johnson 1994), the applied literature is

Chapter 1

 

—

lO
limited. This study is concerned with identifying the TDR program characteristics that indicate

success or failure. Subsequent questions are why or how do these characteristics influence the
program. These questions are best addressed through a case study approach, given the limits of
applied literature and program data. A case study approach is appropriate when examining
contemporary phenomena such as TDR within a real life context (Yin 1994). It is the TDR
context that is most important to those interested in understanding TDR programming and its
potential applicability. The context offers more insight than quantitative data such as the number
of transfers or number of acres preserved. Given the limits to data sets regarding TDR
programming, it was critical to be able to draw upon all sources of evidence. A case study

approach not only permits the use of multiple sources of evidence, it is encouraged.

Given that the focus of this study is on transfer of development rights (T DR)
programming, there are four reasons why a qualitative approach was utilized: TDR can only be
studied in a real world context, TDR programming is context specific, TDR has seen limited use
and a study purpose is to reduce TDR complexity. Because TDR is a form of public policy,
specifically a growth management technique, an experiment cannot be designed. TDR must be
studied within its real local context. Qualitative data are a source of well-grounded, rich
descriptions and explanations of processes occurring in local contexts (Miles and Hubennan 1984
p. 15). Qualitative studies are appropriate for research that stresses the importance of context and
setting. Because every community is different, with its own set of economic, environmental,
social and political variables and processes, every TDR program is context-specific. A set of
rules for TDR programming cannot be developed. By studying TDR in its context its complexity
is reduced. Given the limited use of TDR programming and the limited number of development
right transactions, case study methodology was appropriate. Additionally, because there is no
active TDR program in Michigan, case study findings were integrated into a TDR simulation

model. The model is an appropriate way to examine TDR issues in a Michigan context. By

Chapter 1

11
presenting TDR in its simplest form, some of the perceived complexity will be eliminated. Each

case provides a clear example of TDR use, offering illustrations of TDR concepts. In part this
study was undertaken to reduce the complexity associated with TDR Complexity will be
reduced through exploration and description of existing programs. Recognizing that all programs
are community-specific, a multiple case study approach was undertaken. Using replication logic,
similarities between programs were supported and differences were predicted. When the
hypotheses or propositions were not supported or differences between programs were not

anticipated, the developing TDR theories were modified.

The exploratory case study settings are Buckingham Township, PA; Calvert, County,
MD; Chesterfield Township, NJ; and Thurston County, WA. A balance between levels of
implementation was achieved while offering an opportunity to capture variation between
programs (Stake 1995) by including these cases. The variation included program scale, age of
program and program goals. Two programs were at the county level and two were at the
township level. Program initiation dates were 1975, 1977, 1975 (revised in 1997) and 1996
respectively. Program goals were agricultural land preservation, growth management and
affordable housing. These TDR programs are well documented and program administrators were

accessible for verification of exploratory case study conclusions.

The comparative multiple case study settings are Manheim Township, PA, to represent
TDR programming at the township level, Montgomery County, MD, at the county level and the
New Jersey Pinelands at a regional level. These programs were selected for a number of reasons.
Because land use is undertaken at the local level in Michigan, a township case study was selected.
Manheim Township is located in Lancaster County, PA, and represents a township with valuable
agricultural and open space lands under development pressure. There a number of counties,

including Kent, Ottawa and Washtenaw, are considering TDR programming at the county level;

Chapter 1

12
for this reason the Montgomery County case study was included (Koches 1997, Vander Veen

1996, Brinkman 1997). Michigan’s lack of acceptance of TDR programming is partly based on
the assumption that such programming is inappropriate for a home rule state. The New Jersey
Pinelands was selected in part because New Jersey is in practice a home rule state. Additionally,
there are numerous parallels between the NJ Pinelands program goals and Michigan land use
goals. The Pinelands perceived a need to protect their agricultural resources including a fiuit
industry, their natural resource base that supports their recreation and agricultural tourism
industry, and the area’s water resources. Finally, the Pinelands recognized the need to balance

environmental interests with economic growth.

The model setting is Alpine Township in northern Kent County. Currently this Township
is investigating alternative techniques for agricultural preservation. Because this Township is
located northwest of Grand Rapids, it is experiencing residential development pressures. TDR
programming is most appropriate in situations where the development pressure is high, and
therefore the potential for a market for development rights is greatest (T ustian 1983, Norris
1997). Furthermore, land use decision-makers in Alpine Township recognize the threat this
development pressure places on their agricultural and natural resource base. The Township is
83% agriculture and open space, and has a projected population increase of approximately 30%
from 1990 to the year 2000 (Koches and Toering 1996). While Alpine Township has strong
zoning, the threat of development emanating from neighboring Plainfield Township and Grand
Rapids puts the Township’s agricultural land, including its valuable orchards, at risk.
Recognizing the rate of agricultural land 1055 in Kent County, the Township initiated agricultural
preservation zoning. Currently, the Township is updating its Master Plan and is considering new

techniques for agricultural preservation. One potential technique is TDR.

Chapter 1

13
Research Questions and Propositions

Research questions in qualitative research differ from research questions in quantitative
research. In quantitative research the questions are hypothesis-driven, in qualitative research they
are hypothesis-seeking. Therefore valid research questions initiate hypotheses and proposition
development. Good research questions in a case study direct attention and thinking, enough but
not too much (Stake 1995). Too much direction could lead the research down an erroneous path.
Flexibility is an important element to qualitative research. Qualitative research questions are
asked to generate theories. In the exploratory case study, questions are asked to generate
hypotheses and propositions. In the explanatory case study, questions are asked to test the
validity of the generated hypotheses and propositions. With the simulation model the questions

are asked to determine how the TDR characteristics apply in a particular setting.

Research questions addressed in the exploratory case study are:

0 What characteristics of a TDR program can be used as indicators of program success
or failure?
0 What is the role of sense of place in TDR programming?
0 What is the role of zoning in TDR programming? 15 down zoning necessary to
create a demand for development rights?
0 Do the characteristics change if the management plan is implemented at differing
scales, such as township, county or region?
0 What is the relative importance of each characteristic, and does this change with level
of implementation?
0 Potential proposition: Relative importance of characteristics will remain the same
across program levels.

Research questions addressed in the explanatory case study are:

0 How do these characteristics influence the success of TDR programming?
0 Potential proposition: Sense of place contributes to a feeling of stewardship or
ownership that moves people to take action and participate in the program.
0 Potential proposition: There will be an increase in number of development right
transactions when there is a strong sense of place.
0 Potential proposition: By allowing transfer of rights in a market system, citizens’
perception of land ownership and property rights is maintained.
0 Why are certain characteristics more relevant than others in TDR programming?

Chapter 1

l4

0 What influence does degree of development pressure have on TDR market strength?
0 Potential proposition: When development pressures are high, the market for
development rights is strongest, making TDR programming an effective growth
management technique.
0 How have existing TDR programs influenced landscape sustainability, specifically
land values and land fragmentation?
0 Potential proposition: Effective TDR programming maintains the program area’s
overall land values.
0 Potential proposition: Effective TDR programming minimizes the degree of
fragmentation in the landscape.
0 Why do the characteristics or the relevancy of characteristics change if the
management plan is implemented at differing scales?
0 Potential proposition: Characteristics of TDR programming will remain constant
across different program levels.
0 What are the obstacles of a home rule structure in TDR programming and how can
these obstacles be overcome?

Research Assumptions

Several assumptions are made in this study. The first assumption is that landscapes have
value. The value includes both the value of areas to be developed and areas to be preserved. The
latter are valuable because they possess a valued resource in need of protection. An associated
assumption is that growth is inevitable and planned growth is beneficial to a landscape.
Additionally, it is assumed that low-density development is in fact an inappropriate form of
development. While this study includes the rationale behind this assumption, and the effects of
sprawl are known, the perception that sprawl is not harmful enough to warrant change still exists.
A core study assumption is that policies and programs have affected and can affect the land
transformation process of agricultural and open space lands to residential land use. This study
will not address the ontological question of whether policies have an effect. It is assumed that
land use change has not happened haphazardly, rather that policies and programs have had an

effect, although the effects may not have been intended.

Chapter 1

15

Implications of the study

As communities continue to experience the social, economic and environmental effects of
low-density development, the need to develop and understand innovative growth management
techniques is rising. While TDR offers an alternative to traditional land use management
techniques, it has remained misunderstood due to its complexity and therefore has seen limited
use. This study develops the theory of TDR and removes the perceived complexity of this growth
management concept. A set of TDR program characteristics has been identified. These
characteristics are pertinent to a myriad of growth management and land preservation techniques;
they are applicable to a broad set of landscape management policies. From the case studies a
TDR simulation model was developed. The model may serve as a facilitation tool, assisting
communities in understanding TDR concepts within their local context. Using the TDR program
characteristics and the TDR model, communities can determine which variables in the residential
land development process and which characteristics of a TDR program are most influential. By
simulating the effects of residential land development and TDR programming on a landscape,
including number of rights to be allocated and the spatial distribution of program areas,
communities can better understand the role of landscape management in general and TDR
programming in specific. This study will be of benefit to citizens, municipal officials, planners

and legislators seeking alternative land preservation and growth management techniques.

Chapter 1

Chapter 2

Landscape Management and Ecology

Introduction

In this chapter landscape definitions will first be explored in order to address landscape
design and landscape planning. Landscape management, which encompasses landscape planning,
will be addressed, including why it is important and what it requires. Because the requirements
of landscape management suggest the use of landscape ecology, the relationship between these
two disciplines will be discussed. A discussion of landscape ecology as it applies to landscape
management is presented, including an introduction and a historic summary. Pertinent landscape
ecology concepts in landscape management are presented, for example the notion of scale and the

role of fragmentation.

Landscape Perceptions and Definitions

The word landscape has numerous definitions and interpretations. Specific disciplinary
or philosophical perspectives allow for interpretation of this word to best suit particular needs or
orientation. The landscape to the artisan is very different than the landscape to an engineer,
biologist or economist. Given the terrn’s different interpretations, five interpretations shall be
addressed: landscape as 1) a common reference to land, 2) an aesthetic asset 3) an environment

we experience, 4) a system and 5) an ecologically based unit of analysis.

The first two interpretations have dominated throughout history. Traditionally the

landscape has been viewed as part of the physical environment or as an aesthetic asset. A

16

 

 

17
landscape is both and much more. Landscapes can be viewed as living models of the sustainable

use of the land and the natural resources upon which the planet’s firture and its people depend
(Lucas 1992). As models of sustainable use the last three interpretations of a landscape play an
important role. As questions of sustainability gained strength the traditional interpretations have

been replaced by the more comprehensive interpretations that recognize human interaction.

(1) According to Turner (1987) the current common definition of the term landscape can
be traced back to Old English where it first was documented in reference to a ‘a district’ or ‘a
tract of land’. Cook (1994) notes that while the term fell out of use in English it continued to
exist in Old Dutch terminology in landschap as an artisan’s term. Like the Old English term, an
early definition of the Dutch word Iandrchap meant simply ‘region, tract of land.’ In Germanic
languages, landscape and its etymological equivalent, landschaft, also contain the geographic-
spatial connotation of ‘land’ (Naveh and Lieberman 1984 p. 4). Land generally refers to all parts
of the surface of the earth, wet or dry. A landscape is composed of a conglomeration of features
on a part of the surface of the earth that distinguishes it from another area. It is then a
combination of elements that set it apart from another combination of elements. In the early
nineteenth century A. von Humboldt defined landscape as the total character of an Earth region.
The term’s meaning has been refined to the characterization of the physiographic, geological, and

geomorphological features of the earth’s crust.

(2) The term landscape acquired the artistic connotation as ‘a picture depicting scenery
on land.’ This meaning was the one reintroduced into the English language in the sixteenth
century. When first recorded in 1598 the term landscape was utilized as a artisans’ term,
referring to inland scenery. It was not until the seventeenth century, nearly a quarter century

since the word landscape’s first recording, that the word was used in reference to a view or vista

Chapter 2

18
of natural scenery. The American Heritage dictionary’s definition emphasizes landscape as

scenery, as an aesthetic asset, “an expanse of scenery that can be seen in a single view; a picture
depicting an expanse of scenery; the branch of art dealing with the representation of natural
scenery.” This dictionary goes on to note “that in the case of the word landscape we have an
example of nature imitating art, insofar as development is concerned.” The influence of the
aesthetic perspective is evident even today. Steiner (1990) noted that a landscape is more than a
picturesque view; it is the sum of the parts that can be seen with one’s eye. Even though he
acknowledged that a landscape was more than a view, that it was the sum of what could be seen,

the choice of the verb limits the definition to a visual experience.

(3) While Naveh and Lieberman recognize the ‘visual experience’ associated with
landscapes, they define landscape further by including a spatial aspect. The spatial connotation of
landscape has acquired a more comprehensive meaning in which the landscape is experienced as
a spatial-visual whole reality of the total environment (Naveh and Lieberman 1984 p. 4). The
landscape is not merely a spatial or visual entity, it is the experiences of that entity that define the
landscape. landscape, as described by the International Federation of Landscape Architects, is
the environment that is experienced, the interaction of natural resources and people’s needs
(Lucas 1992 p.2). The landscape encompasses the uses of land — housing, transportation,
agriculture, and natural areas — and is a composite of those uses. The same area may be used for
a variety of human activities, all of which are in one way or another connected with land.
Landscape is related to land use. Many components are encompassed in our understanding of a
landscape; the geological structure of the land, its soils, animals and vegetation; and the pattern of
human activity both past and present. The patterns present in the landscape tell our history, how

we have lived and what we have valued.

Chapter 2

19
The environment that is experienced may be natural or cultural. Langer (1973) explored

the differences between naturlandschaften (natural landscape) and kulturlandschaften (cultural
landscape) that had first been noted by Schmithusen in 1963 (Naveh and Lieberman 1984 p. 7).
Langer stressed that the cultural landscapes are related not only to the natural sciences but also to
the sociocultural sciences, as expressed by anthropogenic impacts through utilization. Others
have addressed the relationship natural and cultural landscapes (F abos 1985, Steiner 1991, Van
Langevelde 1994). Fabos also recognized the connection between the natural and the social in his
reference to cultural landscapes. He viewed the natural landscape as the resource base for the
cultural landscape and as such it highly influenced cultural landscape development (F abos 1985).
Steiner (1991) views a landscape as an interface between environmental and social processes.
The cultural and natural landscapes are dependent on each other and they therefore should be

considered as dimensions of the same landscape.

While we see a controversy between separation and integration of nature and cultural
dimensions, from a landscape ecology perspective, this controversy cannot exist. These are both
prerequisites for the existence of the same system. Rather than a controversy, it is a question of
balance giving rise to questions of scale and tolerance. Landscape managers must understand the
symbiotic relationship between separation and integration of natural and cultural land uses to
have a functional whole landscape system. We recognize the failure of separation of land uses at
scales where people can make no connection between uses; the results include long commutes

and class segregation.

The strength of the relationship between the natural and cultural dimensions is also
evident in processes. “Social processes or human practices will spatially interact with natural

processes in the landscape. Landscape ecology deals with landscapes as the total spatial and

Chapter 2

20
functional entity of natural and cultural systems.” (van Langevelde 1994 p. 36) The landscape is

a system in itself. A landscape reflects both the natural physical elements and their ecosystem
firnctions as well as the social elements and their human system functions. These two
components come together to define and structure the landscape, which in turn determines future
social and environmental development. Landscape management decisions cannot be made in a
single area, one can not just address environmental process without regard for the social

processes, and vice versa. The entire landscape system must be considered.

(4) No matter what discipline is used, no matter what definition is supported, it is evident
that due to the complexity and diversity of a landscape’s component parts it is difficult to
perceive the specifics of a landscape. However, the landscape is more important than the
components themselves; what is most important are the interconnections and interdependencies,
the ways in which the various parts are integrated into the whole (Capra 1982). In part these
interconnections express themselves as functions and processes in the landscape. The importance
of the processes within the landscape is evident in the modern definition of landscape that
incorporates aspects of the earlier narrow version with nineteenth century humanistic and
scientific values. The Oxford English Dictionary cites the predominant modern definition of the
term as “a tract of land with its distinguishing characteristics and features, especially considered
as a product of shaping processes and agents (usually natural)” (Cook 1994 p.2) Importance lies

in landscape characteristics that are the end result of function and process.

Recognizing the landscape as a system, human ecologists and landscape ecologists study
the landscape as a holistic entity made up of different elements, all influencing each other.
“Buchwald (1963) defined the landscape as the total living space as a multi-layered

‘wirkungsgefuge’ -interacting system - of both the geosphere and the biosphere. Elger (1964)

Chapter 2

21
coined the phrase ‘total human ecosystem’ to define the highest level of integration of humans

and their environment. Dansereau (1957) supported this idea of the landscape as the highest
integrative level of environmental processes and relations. He regarded human ecology, which is
related to human geography as well as anthropology, agriculture, forestry, sociology and history,
as the science studying the influence of man on the landscape.” (Naveh and Lieberman 1984 p. 7)
Poore and Poore (1987) defined a landscape as a matter not only of beauty, of aesthetic
appreciation of nature and architecture, but of the whole ecology of an area and the history of its

occupation and use by people (Poore, D. and Poore J. 1987).

By focusing on processes, a system that can be used as a unit of analysis may be defined.
The patterns and processes define the landscape boundary, i.e. the unit of analysis. The boundary
that is defined in part is dependent on what patterns and processes are of interest, for example
settlement or p0pulation patterns, vegetation patterns and soil pattems. The pattern observed and
thus the boundary of a landscape may change depending on the discipline of the observer. For

example a historian may define a boundary differently from a soils scientist.

(5) Historically, a landscape has not been used as a unit of analysis. In part this is due to
the ambiguity of the term itself, and the difficulty in defining boundaries of a landscape. A unit
of analysis requires a definable measurable unit. Ecologists have brought insight into defining
the boundary based on an ecological definition of landscape as ‘a heterogeneous land area that
contains a mosaic of land forms, vegetation types and land uses’. According to Forrnan and
Godron (1986) the interdisciplinary field of landscape ecology has developed a specific definition
of landscape, ‘a heterogeneous land area composed of a cluster of interacting ecosystems that is
repeated in similar form throughout (Cook 1994 p. 3). By examining the interacting ecosystems a

boundary can be defined. Fonnan and Godron identify three mechanisms that operate within a

Chapter 2

22

landscape boundary: geomorphological processes, colonization and local ecosystem disturbances.

These mechanisms are what form the landscape.

While landscapes are heterogeneous, the mosaic they represent - the pattern — exhibits an
overall homogeneity. Common to many definitions of landscape is the concept of homogeneity
(Lyle 1985). This offers flexibility, allowing landscape managers to choose what ‘kind of

homogeneity’ is most appropriate for the management issue at hand.

Even though the word landscape retains its physical and aesthetic connotations, it
developed into a more comprehensive concept. Common to the comprehensive definitions are
the land, its physical form and ecology, and the human dimension expressed in the use of the land

and the values such uses represent.

Landscape Design and Planning

Our responsibility is to retain what we treasure, because we are merely guests on those
spaces of the earth that we inhabit. We should leave good impressions about our visit
(Steiner 1990 p. x).

While a distinction can be made between landscape design and landscape planning, they
are closely related. Lyle (1985) makes a distinction between landscape design and landscape
planning, where design refers to the shaping of landscapes rather than an administrative activity.
He refers to landscape design process as a vehicle for creative participation in natural processes,
using the term ‘design’ to refer to the act of giving form to physical phenomena. Comparatively,
he views planning as an administrative, legal or policy-making activity. However, the shaping of
the landscape cannot be separated from political and institutional activities. Both must be

addressed, and for that reason any reference to landscape planning includes landscape design.

Chapter 2

 

23

Traditionally, planning has been viewed as a human activity inherently related to the use
of land. Planning involves “the use of scientific and technical knowledge to provide options for
decision making as well as a process for considering and reaching consensus on a range of
choices.” (Steiner 1991 p4) (van Langevelde 1994 p. 28) Planning takes knowledge and moves it
toward action. The type of knowledge considered will influence what direction planning will
take. Planning involves Visioning and decision-nuking in order to wisely use and sustain a
community’s resources. “It is more than a tool or technique; it is a philosophy for organizing
actions that enable people to predict and visualize the firture of any land area. Moreover,
planning gives people the ability to link actions on specific parcels of land to larger regional
systems.” (Steiner 1990 p.4) While project planning has been perceived as separate from
comprehensive planning, in reality they should be considered simultaneously due to their impacts

upon each other.

Because the landscape is a system containing both environmental and social processes,
landscape planning is a comprehensive activity. It involves environmental, economic, social and
historical planning. The focus of planning can vary over time depending on the issues at hand.
Since the late 19605 the focus has been on the environment, where the historical link between
ecology and planning became increasingly apparent due to a growing environmental
consciousness in response to pollution, destruction of nature and the depletion of resources.
Environmental planning is just one aspect of landscape planning. Environmental planning is an
attempt to balance and harmonize the various enterprises, which man, for his own benefit, has
superimposed on natural environments (Edington an Edington 1977 p. 1). Ecological planning
then may be defined as the use of biophysical and sociocultural information to suggest

opportunities and constraints for decision making about the use of the landscape (Steiner 1990

Chapter 2

24
p.9). Steiner goes on to state that the ecological planning method is primarily a procedure for

studying the biophysical and sociocultural systems of a place to reveal where specific land uses
may be best practiced. McHarg makes a connection between ecological planning and the

maintenance and enhancement of human health and well-being (1981 pp 112-113).

While the focus of planning may be varied, the subject of study in landscape planning is
the landscape and its processes. These processes include the interrelationships between humans
and the physical and biological elements within the landscape. Landscape planning has a spatial
orientation. Landscape planning provides an opportunity to influence spatial practices and to
create new landscape structures. Landscape planning is a process of managing landscape
transformations to bring land use in harmony with natural processes, based on knowledge of the
reciprocal relationship between people and the land (van Langevelde 1994 p. 29). Landscape
planning involves the allocation of land uses based on conscious decisions regarding the positive

and negative effects of the associated activities upon the environment.

Land uses may have positive or negative effects on other uses and ecosystems.
Landscape planning must consider all possible effects over space and time. Sustainable
landscapes, maintaining both ecological and human systems over time, require an understanding
of natural and social processes. More importantly, landscape planning requires an understanding

of their spatial relationships in a comprehensive way.

Because landscape planning addresses the allocation of land uses and the subsequent
effects on the environment, landscape planning is concerned with allocation of resources at the
landscape scale. Landscape planning is both a process and a activity. Lovejoy (1979) stated that

landscape planning examines landscape resources, determines and estimates present and future

Chapter 2

25
demands which will have modifying effects on the landscape, and then attempts conflict

resolution (Lovejoy 1979 p.21). Landscape planning, unlike the traditional approach to land use
planning, relies on landscape resources and environmental attributes as the driving force in
decision-making. Traditionally land use planning had a ‘town planning’ focus. A more
comprehensive one replaced this traditional focus, due to the necessity for land mangers to
consider not only the land within a town but also the land surrounding the town. Land use
planning has moved toward resource planning, where the resource in question is the land, thereby

bringing it in line with landscape planning.

Historically, resource planning applied to a single resource. However, resource managers
who recognize the interconnections between resources have taken a systems science approach.
This approach examines the whole system rather than taking a reductionist approach and reducing
the whole into component parts. Furthermore, by examining individual parts the relationships,
including their effects cannot be understood. The interconnections between resources make it
difficult to define boundaries between resource and resource systems. It is often difficult to
separate resources and manage them individually; each has an effect on the others. By
recognizing and respecting the linkages and connections between resources, managers can more

appropriately address resource issues.

Landscape planning from an ecological perspective suggests a systems science approach
in order to achieve understanding of the natural and cultural forces (systems). Only through an
understanding of these systems and an adherence to these systems can the landscape be
appropriately managed. For example, the connection between land and water planning in land
use is apparent. The focus of resource planning is on the relationships between natural resources,

the exploitation or protection of any having a direct effect on others. With the realization that a

Chapter 2

26

solution to one problem may create another problem, resource planning moved from a single-
purpose to comprehensive approach. In the late 19605 and early 19705 this was encouraged by
federal and state efforts toward an integrative approach to planning, for example the Nation’s
Water Resource Act of 1965 and land use planning that emphasized the land and water

relationship.

To be successful, landscape planning must provide an appropriate fit between human
behaviors, values and goals with landscape resources, processes and systems. Because the term
landscape has not historically been associated with a unit of analysis, most landscape planning
issues have been addressed based on political or administrative boundaries making it hard to
achieve an appropriate fit. By broadening the definition of landscape to include a fundamental
unit of analysis, an appropriate fit is more likely. Cook notes that the landscape as a fundamental

unit of analysis is becoming more evident in landscape planning and land management (Cook

1994).

Landscape Management

While landscape management has been used synonymously with landscape planning, it is
actually much more. Landscape management includes landscape design, planning, maintenance
and evaluation. Management must begin with planning, when a plan is envisioned and
designed. Management moves beyond planning and involves implementation and evaluation.
Landscape management requires planning in a variety of arenas, including environmental
planning, economic planning, social planning and cultural planning. Landscape ecology, given

its multidisciplinary nature, offers insight into landscape management.

Chapter 2

27
The American Heritage dictionary offers definitions of manage and management that

emphasize control, “to direct or control the use of; the act, manner, or practice of managing;
handling, supervision, or control.” Many landscape managers have sadly not replaced this notion
of control. Landscape management given the object of the act is the landscape and the land must
broaden this definition of manage; it must move beyond control. Landscape managers cannot
control the landscape; rather, they must work within the landscape in ways that allow them to
meet their goals and objectives by capitalizing on the inherent characteristics of the landscape

system. We manage the landscape not to control, but rather to participate (Lyle 1985).

Management has been defined as the judicious use of means to accomplish a desired end.
It involves working with the system in question and its component parts to achieve specified
goals and objectives. Management is an action that requires recognizing challenges and
capitalizing on opportunities in order to solve problems. While landscape planning may refer to
the use of knowledge to provide options for decision-making and processes for considering and
reaching consensus on a range of choices (Steiner 1991), landscape management is the action

associated with the planning effort.

Landscape management often involves a balance between conservation and use, a
balance that can only be achieved when both are addressed. Lovejoy (1979) notes that
conservation cannot be preservation and protection alone. Rather it requires positive
management including definitive decisions and actions in the management, maintenance and
sustainability of the environment. Landscape management involves treatments, practices and
actions on and within the landscape in order to arrive at a balance between conservation and use
that meets the goals and objectives of the managers. Because landscape management involves

treatment, practices and actions on the land it is closely related to land use. With each use there

Chapter 2

28

are management options: how we use, treat, care for, and maintain the land and its resources, and

additional options on timing and identification of management tasks.

Why is Landscape Management Appropriate?

Only if we know how the land was can we know how it is. Wendall Berry

Given that the focus of landscape management is the landscape, 3 system of both natural
and social processes, management based on ecological principles is most appropriate. There are
three main rationales why we should engage in landscape management: 1) it is inevitable, 2)
resources are limited and 3) the complexity of land and land use issues requires a

multidisciplinary approach.

(1) The connection between human activities and the environment has existed since
humans have existed. At times this connection, while apparent, was de-emphasized due to the
seemingly insignificant impact upon one another. Yet, at other times the connection is drastically
apparent, typically when the consequences directly affect human activities. Those who settled
aloflg riverbeds while aware of the interconnection between their activities and the river resource
beCame painfully aware of the interconnection when their settlements were flooded and swept

away,

As long as human communities live and work on land, they will actively and passively
affect their environment. Given the inevitability of human influence, it is prudent to manage with
interltion rather than in reaction to consequential development. Landscape managers should
dire“ human ecosystems through conscious thoughtful choices rather than respond to unplanned

human ecosystems. By managing human ecosystems based on ecological principles, we can
Chapter 2

29

develop and guide ecosystems that meet human needs, that are sustainable, and that support non-
human communities as well. Not every landscape can achieve all of the ends. Resources are

limited, priorities must be assigned and choices must be made.

(2) Our definition of landscape includes natural resources such as water, land and air
whose usage many times results in conflicts. Natural resource limitations and the concept of
carrying capacity imply conflicting uses of environmental resources. With the intermixing of the
distinctions between urban/rural and natural/cultural, understanding landscapes from a spatial,
functional and dynamic perspective becomes a key to balancing conflicting uses of land, water
and air (Steiner 1990 p. ix). In order to make better landscape and land use decisions, land
managers need to assess the relative quantity, quality and distribution of those landscape

resources within the content of a community’s conflicting needs.

Landscape management with an ecological basis provides an explanation of the
environment’s supply of natural resources, the limits and the carrying capacity. Without this
explanation sustainability cannot be understood or achieved. The limits of natural resources
have been acknowledged at different times in history. However, this recognition has not always
tra”Slated into action. Land is the most fundamental resource of all and is being developed and
ex1310ited ever faster and often without proper assessment either of the need to develop or of the
effPets that development will have (Lovejoy 1979 Preface). Too often in American history there
has been the perception that there is an abundance of pristine land. The absence of a principal
goal to conserve and protect these areas from consumptive land uses has added to the demise of
these lands. Cook (1994) noted the danger in this belief that land is plentiful; it has led to the
notion that there is always more to replace that which has been spoiled. We see the effects of

this belief today, as developments abandon urban centers and consume greenfields.

Chapter 2

30

Given that the earth and its landscapes provide only a limited amount of resources, the

need for order is strengthened as resources are depleted due to use, misuse and their effects. The

need for order is highlighted by the complexity of landscape issues.

(3) The complexity of landscape and land issues requires a transdisciplinary approach.
Landscape management not only allows such an approach, it requires it. Landscape planning
requires a multi-disciplinary effort, integrating landscape planning, land and water use planning,
landscape architecture, ecology, soil sciences, forestry, geography and many other disciplines
(Steiner 1991). Today communities face many social, economic, political, and environmental
Problems and opportunities. These problems and opportunities manifest themselves in the
landscape. More importantly these problems and opportunities often overlap and are connected.
Patterns within the landscape, in particular land use patterns, are associated with many of
SOCiety’s social, economic and environmental problems. Because the landscape is where the
Social and environmental processes merge, it is also where the solutions to problems can be
found. Solutions to environmental and societal problems require cross-disciplinary design and
Planning; landscape management offers an arena where this can be achieved. An understanding of

the importance and complexity of land use issues have led to need for transdisciplinary approach
to decision making and problem solving.
Requirements - A Transdisciplinary Approach and a Holistic Viewpoint

Given that landscapes are the inevitable interface between human and natural systems,
that they highlight the conflict between limited resources and that they are inherently complex,

lands(tape management requires a transdisciplinary approach and a holistic view.

Chapter 2

31

Landscape management requires tradeoffs between environmental, social, and economic
values. In order to formulate landscape management alternatives, ecosystems and human systems
must be understood. Problem solving at the landscape level requires knowledge and awareness
of the complex interactions between social and natural components in the landscape (van
Langevelde 1994 p. 38). In order to study these complex interactions and any associated
problems, a transdisciplinary approach is needed. No single discipline can bring all the
knowledge to bear on a landscape issues; no single discipline is sufficient for understanding
landscape complexity. Rather, what is needed is a range of disciplines that integrate their

methOds, information and knowledge.

At the rudimentary level, natural scientists must connect with social societies and share
insight, information and knowledge. At more discrete levels, the biologist needs to communicate
with the ecologist. Accomplishing this transdisciplinary exchange is not easy, since each
discipline brings its language and set of values; each also brings its own paradigm. In order to
aChieve successful landscape management a new landscape paradigm must evolve, bringing to it
a blending of values and, more importantly, a new emergent value set which respects the
landscape as a whole system. This integration of multiple disciplines is what allowed the field of

landscape ecology to emerge.

With the integration of concepts, theories, and models of multiple disciplines, holistic
pr Obltam-solving can be achieved. Responsible landscape management to address problems and
0pPortunities is dependent on a knowledge of landscape processes and a holistic view for defining
the Problem. The term “holistic,” from the Greek halos (“whole”), refers to an understanding of
reality in terms of integrated wholes whose properties cannot be reduced to those of small units.

Tron, a German biogeographer, introduced a holistic perspective to the term landscape. In 1971

Chapter 2

32
be detailed the epistemological developments in “landscape.” The landscape is a fully integrated

holistic entity; its “whole” is more than the sum of its parts and therefore should be studied in its

totality (Troll 1971).

In response to landscape complexity, a system science approach is most appropriate
(Checkland 1981). It is difficult to separate the landscape into components and identify the
interconnections, which is why a systems science approach to learning may be most appropriate.
Landscape issues require examination of the whole rather than separate parts. With regard to
IaDdScape assessment, a landscape is more than the sum of its component parts. Aristotle argued
that the whole was more than the sum of its parts. The continuation of this perspective would
have enhanced landscape management through time. However, against a landscape’s best interest,
the scientific revolution of the 17th century and Newton’s physics replaced Aristotle’s view with
a reductionist perspective. The role of the reductionist and scientific method in landscape
deterioration can not be downplayed. A mechanistic approach, touted by Decartes, has its limits
‘0 understanding landscape processes. While reductionism may yield information on the
components, the emergent relationships at various levels are still unknown. Only through an

undcrstanding of interconnections and emergent properties can landscape solutions be plausible.

Landscape management requires an understanding of process and interconnections.
Many of these exist at varying levels of organization. If a landscape manager looks at the
components or at a particular level of landscape structure he/she may miss the driving process or
interconnection. There exists a concept of organized complexity in a landscape, in which a
hierarchy of levels of organization exist, with each level being characterized by emergent
properties which do not exist at lower levels (Checkland 1981). Ecologists have recognized the

role of levels of organization and emergent properties in succession. Landscape management

Chapter 2

33
requires an understanding of the emergent properties. Only in understanding the emergent

properties and the processes involved can we address landscape problems and their complexity.

Related to this concept of levels of organization is the need to create, enhance and
promote order, given the complexity of landscape and landscape issues. In regards to order, Lyle
writes, “in the midst of complexity, with its many opportunities for diversion, we need to keep
reminding ourselves that the purpose of creating order in human ecosystems is to enable them to
fulfill the needs of both their human and other components.” In landscape management, there are
various kinds of order, including, ecological order, social order, economic order and visual order.

BY Creating or recognizing order we can better deal with complex issues.

In summary, the multidimensional nature of landscape management requires a
transdisciplinary approach and a holistic view in order to identify problems and generate
alternative solutions. A systems approach allows for the holistic view needed for effective
landscape management. The whole or complete scene is something greater than a series of
individual elements, however significant those components may be in the overall composition.
The concern is not so much with the detail of topography, historical and archaeological features
and natural habitats or individual features such as trees and woodlands, but with the way in which
t1138c separate components together make up the whole scene and how people react to the scene
(LuCas 1992). It is in these reactions that landscape management policies are either supported or

thWauted.

Landscape Management in Relation to Landscape Ecology
While landscape management and landscape ecology are both spatial disciplines, their

regau’d for the landscape is very different. Landscape management requires active participation in

Chapter 2

34
the landscape, while landscape ecology is driven by observation and understanding of the

landscape. Landscape management can be perceived as purposeful intervention in the landscape
to bring about change. Management involves decision-making, which requires goal identification
and valuation. The focus of landscape ecology is understanding and describing the landscape’s
structure, function and changes. However, in order to engage in landscape management one must
first engage in landscape ecology; without an understanding of the landscape structure, function
and Change one cannot appropriately envision (imagine) the space at hand nor can one effectively
manage. While ecologists have minimized the role of planning and touted landscape ecology, in

fact they are complementary and both are necessary.

Landscape Ecology

Introduction to Landscape Ecology

The complexity of a landscape system requires the study of its attributes in an integrated
way, A transdisciplinary approach and a holistic perspective to land management are found in the
field of landscape ecology. Landscape ecology is an interdisciplinary science that deals with the
interrelation between human society and its living space, its open and built-up landscape (Naveh
and Lieverrnan 1983, 1984, Zonneveld 1994). This discipline evolved as a result of the holistic
a13131'0ach adopted by geographers, biologists, ecologists, landscape planners, designers, and
managers in their attempt to bridge the gap between natural, agricultural, human and urban
S”terns (Naveh and Lieberman 1984). Landscape ecology has brought the classical science and
3095811 science paradigms together, and thus allows the complexity of landscape problems to be
best recognized and respected. Furthermore, landscape ecology allows landscape managers to

addrcss the complexity.

Chapter 2

35
While landscape ecology has been influenced by ecology, geography and vegetation

sciences, it has gone beyond the traditional biological/ecological disciplinary boundaries and
integrated a multitude of disciplinary approaches to landscape management. The word ecology is
derived from the Greek word for house, oikos. Ecology is generally defined as the study of the
interactions among living organisms and their environment. While landscape ecology can be
viewed from a biological perspective by concentrating on the ecology at the landscape scale, this
provides limited understanding of the landscape as an entity unto itself; it disregards connections
and linkages which are absent organisms, for instance relations between land, soil, water and
climate. An expanded definition is the study of the reciprocal relationships of all living things to
each other and to their biotic and physical environments (Steiner 1990 p. 4). It is a study of the
relationships between all living things, including people, to their biological and physical
environments; or, as stated by Zonneveld (1994), the study of the total of existing relations in
cchrnetic context in the ‘oikos’ (among all the attributes, inhabitants and element forming the

‘house’). Landscape ecology is more than the ecology of a landscape.

Landscape ecology ventures from classical bio-ecological sciences to include human-
Centered social sciences connected with land use including economics and geography. It is a
diverse interdisciplinary science that establishes common ground between seemingly
incompatible disciplines in the areas of solving problems of humans and nature (Cook 1994 p. 3).
Because landscape ecology recognizes the dynamic role of humans in the landscape it moves
away from traditional ecological thinking and Clementsian succession-to-climax tenets. It was
i"ll-"Oltant to broaden the ecological paradigm by including causal ecological relations between
Vegetation and environment that were based on ecophysiological studies and insight (Naveh and
Lieberman 1984 p.9). Landscape ecology has shifted its basis to the broader interdisciplinary

concepts of human ecology. Human ecology focuses on the way people interact with each other

Chapter 2

36

and with the environment. We are surrounded by human ecology; we are human ecology. In
moving toward human ecology, landscape ecology places an emphasis on the overall impact of
anthropocentric land uses. Applied human ecology provides an approach that can assist planners
to analyze the problems of a region as they relate to each other, to the landscape, and to the
national and local political economic structure. Each problem is linked to the community in one
or more specific ways. For example, banking is related to real estate, which is related to
development pressure, which is related to the rising tax base, which is related to retirees
organizing against increasing property taxes. Human ecology and the associated discipline of
landscape ecology examine how people are affected by these chain reactions and present options
for the future based on those impacts (Steiner 1990). Landscape ecology provides the scientific
basis for the creation of more balanced and farsighted policies and decision-making tools (Naveh

and Lieberman 1984).

Another aspect of landscape ecology that sets it apart from fundamental types of

ecological studies is its spatial orientation (Golley 1987). Landscape ecology emphasizes patterns
and processes. It is the study of spatial relationships and functional interactions between
component landscape components (ecotopes) of a kilometers-wide heterogeneous area, and the
way in which these bring about changes of structure and function in the ecological mosaic over
time (Formon and Godron 1986, Naveh and Lieberman 1984, Turner 1987, van Langevelde
1994). Landscape ecology is based on spatial constructs. One of the most relevant contributions
that landscape ecology makes to landscape management is the use of horizontal or spatial
con<>epts as fundamental principles. While landscape planners are experienced in working with
ideas relating to structure, function and change, landscape ecology brings insight into how these
conCcpts are spatially connected. Landscape ecology focuses on spatial patterns in a section of a

‘andscape, where biological communities interact with the physical environment (Troll 1939,

Chapter 2

37
1968 from Dramstad et a1 1996). As noted by Zonneveld (1994), the central theme in landscape

ecology is the study of relations between the attributes and elements of the landscape at the earth
surface. These relationships are evident in three dimensions: topological (vertical), chorological
(horizontal) and geospherical (global). The topologic dimension contends with vertical
heterogeneity. The relations between the land attributes and between very near ecosystem
elements play a dominant role in the topological sphere. The chorologic dimension focuses on the
horizontal heterogeneity. The relations between the patches of the mosaic of ecotopes are called
choral ogical relations. The geospheric dimension encompasses all global relations (Zonneveld
1994) - It is important that landscape managers - no matter what sphere is their focus for the issue

at hatld - consider all three spheres.

History

"The history of landscape ecology began before the discipline emerged. Given that
landscape ecology is based on a comprehensive or integrated approach, while landscape
designers, managers and professionals have not deemed themselves landscape ecologists, they
have util ized multiple disciplines and employed holistic techniques. Geographers, plant
geographers, foresters, soil scientists, climatologists, natural historians and planners all made
contfibutions to the basis of landscape ecology. Landscape ecology’s multidisciplinary roots
were entrenched before the discipline was formally established. Perhaps the origins of landscape
°°°l°gy trace back to 1865 when George Perkins Marsh addressed the impacts of human activity,

rn palTicular the growth of industrial societies, on the natural environment (Fabos 1985).

Landscape ecology concepts and principles, including the concept of a multidisciplinary
app roach, emerged nearly half a century before the interdisciplinary approach to landscape

e
901033, came on the scene in the 19505. Such concepts and principles were found in early work

Chapter 2

38
of land and regional planners such as Aldo Leopold, Sir Patrick Geddes, Benton MacKaye and

Lewis Mumford. When landscape ecology emerged as a formal discipline it evolved from a
multidiscipline to an interdiscipline. Later, elements of ecological approaches to landscape
planning and spatial concepts in landscape planning were found in data collection, data analysis,
plan implementation and plan monitoring techniques (e.g., McHarg 1969, Fabos, 1979, Vink
198 3, Ruiicka and Miklos 1990, Steiner 1991). The actual integration of concepts, principles and
methodology did not occur until landscape ecology became transdisciplinary, when the discipline
of landscape ecology transcended interdisciplinary thinking, when land scholars and professionals

identi fled themselves first as landscape ecologists and second as researchers in their given sub-

disc i p l ine.

Since the early twentieth century, planning has been an arena where ecological principles
were uti lized. Aldo Leopold (1933, 1949) was one of the first to advocate an ‘ecological ethic’
for Pia-tariing in the 19305. This thinking was supported by regional planners such as Geddes,
Macde and Mumford, who brought a biological perspective to planning (Geddes 1915,
MacKaye 1962 and Lewis Mumford 1961). Their work integrated growth and ecology. Sir
Patrick Geddes, a Scottish biologist and town planner, and the English garden city advocate
Ebemazer Howard strongly influenced the work of Mumford and MacKaye. Geddes and
MacKaye had a theoretical approach to land use planning. In part Geddes’ work examined the
intemqion between human activities and the natural environment. He developed landscape
survey techniques and proposed a classification system for natural resources (Fabos 1985).
Howard proposed ‘garden cities’ that emphasized small communities located in the countryside,
scparatcd from existing urban areas by greenbelts of permanent rural land (Howard 1965).
Howard’s work recognized the relationship between urban industrial centers and surrounding

m . . . .
fal landscapes, the complexity of land use, and the interconnection between economic, legal,

Chapter 2

39

social, environmental and political systems. Today the garden-city concept is evident in planned
unit developments (PUDs) and planned communities. Benton MacKaye was a forester whose
work in the Boston area is viewed as one of the earliest examples of regional planning. He
developed a regional approach to open space and urban development in 1928. MacKaye
identified categories of land that were deemed valuable or fragile and as such should be protected

fi-om development.

Formally, landscape ecology originated with geographers and ecologists in Central and
Eastern Europe following World War II and is therefore a relatively recent discipline. The
theoretical foundations of landscape ecology were provided by scholars who interpreted the
natural history and physical environment patterns of large areas. Landscape ecology gained
strength when aerial photography began to be widely available. In 1950, recognizing the holistic
character of landscapes, the German biogeographer Carl Troll introduced the term ‘landscape
ecology’ . Troll (1971) had a biological understanding of ecosystems and experience as a
geographer with aerial photo-interpretation. The role of biogeographers like Troll played an
importal-‘t role in the early stages of landscape ecology . They perceived the landscape as more
than 2:11 aesthetic asset, as was the tendency of landscape architects, and as more than part of the
PhySiCal environment, as is the tendency of geographers (Naveh and Lieberman 1984 p.21). Troll
defined landscape as ‘the total spatial and visual entity’ of human living space, integrating the
geosphere with the biosphere and its noospheric (from the Greek “noos,” meaning “mind”) man-
made artifacts. Nodsphere is related to man, as biosphere is related to organisms. Troll viewed a
lamdscape as an integrated holistic entity that must be studied in its totality. The term ‘noosphere’
and man’s role in its formation was reevaluated by the nature philosopher Teilhard de Chardin

(1966) - According to Naveh and Lieberman (1984), Teilhard de Chardin believed in the active

Chapter 2

4O

role of man in designing and furthering constructive evolution through self-reflection and human

consciousness, and called this process ‘noégenesis’ (Naveh and Lieberman 1984 p. 8).

While the literature had been dominated by Dutch and German works since the 19603,
North American researchers have made contributions. In addition to biogeographers, landscape
des i gn and planning professionals contributed to the foundations of landscape ecology with their
ecological approach to planning. Those who made major contributions include include Kevin
Lynch (1960), G. Angus Hills (1961), Lewis Mumford (1961), Jane Jacobs (1961), Carl Ortura
Sauer (1963) Philip Lewis (1969), Ian McHarg (1969), Luna Leopold (1974), G. Eckbo (1975),
Woebse (1975), Zube et al. (1975), I. Zonneveld (1979), Steinitz (1979), Anne Spim (1984),
Julius Gy. Fabos (1979, 1985), A.P.A.Vink (1983) and Frederick Steiner (1990). In the 1960s
and early 19708 landscape ecology was embraced by the landscape designing and planning
professions (Lynch 1960, Woebse, 1975, Hills, 1976, McHarg 1969). Natural resource mapping
in 1"’SPCDIBe to the destruction of natural resources through development and natural disturbance
played a part in the development of landscape ecology. An important aspect of McHarg’s
landscape approach to planning was the integration of economic and environmental models for
land use allocation. McHarg’s overlay technique, which mapped multiple resources, can be used
to i‘kirl‘iify suitable areas for development while protecting critical water and other related
resourCes' In Design with Nature, McHarg (1969) exposed landscape modification within
ecological constraints. In 1975, Woebse wrote a handbook on landscape ecology for architects
emphasizing an ecological design approach. According to Woebse, the criteria to be used for the
evalllEltion of landscape quality should be oriented toward the maintenance of natural functions
and stNCture and the landscape’s ecological equilibrium, as conditioned by ecological site factors

0f Clin'late and soil, by natural design material and not by artificial material, by the natural shapes

Chapter 2

41
of the land and not by geometric or other preconceived lines and shapes (Naveh and Lieberman

1984 p.13).

At this same time, another discipline that played a major role in the formation of the

discipline was ecology (Odum 1969, Leopold, L. 1974, and Foin 1976). Eugene Odum, a theorist

of ecologically based planning, formulated a model of land use allocation based on ecological
principles (Odum 1969). Odum’s model classified land into four categories depending on its
mncti on in the regional ecosystem: productive environment (growth), protective environment
(matu re), compromise environment (multi-use) and urban-industrial (non-vital). The productive
environment represents the growth area, where the major function is production. The protective
envi ronment represents the mature natural environments that have been permitted to succeed.
The compromise environment is where multiple uses occur. And the urban-industrial

environment is the area that is non-vital to biological ecosystems.

It has taken landscape ecology nearly thirty years to establish itself as a scientific basis
for land and landscape evaluation, planning, management, conservation and reclamation (Naveh
and Li ebennan 1984). Principles of landscape ecology have proven critical in land evaluation
studies (Zonneveld 1979); pattern analysis; soil and agriculture (A.P.A Vink 1980, 1983); total
human ecology (Naveh and Lieberman 1984, 1993); hierarchy theory (O’Neill et al 1986) and
land nlosaics (Forman & Godron 1986, Forman 1995) A number of researchers have contributed
to the theory of landscape ecology, regarding general concepts (Forman and Godron 1981, 1986,
Ruiiéka 1982, Zonneveld & Forman 1990, Dramstad et al 1996); land evaluation (Zonneveld
1979> Davidson 1992, Yonguan Yin 1993); concepts of fragmentation and conservation

(costa-llza et al. 1990, Hansson & Angelstam 1991); quantitative methodology (Burrough 1986,

Chapter 2

42
Tumer & Gardner 1991); land use classification (Schultink 1992); and heterogeneity, boundaries

and restoration (Turner 1987, Vos & Opdam 1992).

Although many disciplines and individuals have contributed to the principles and
concepts of landscape ecology, while others formalized the discipline, and yet others
accomplished the integration of the concepts, all those who practiced ‘landscape ecology’ shared

their focus on the landscape components, processes and the interaction between them.

La ndscape Ecology Concepts Applicable in Landscape
Ma r- agement

Holism, Hierarchy and Overlapping Systems

Given the multidisciplinary roots of landscape ecology, a variety of landscape ecology
definitions emerged. The broadest and most comprehensive definition was presented by
Zonneveld, regarding the landscape ecology as both a formal bio-, geo—, and human science and
as a ho] istic approach, attitude, and state of mind. A critical piece of this definition is the

inclusion of a holistic approach.

A holistic landscape concept presupposes that people, plants, animals and their biotic and
abiotic environments all become understood as interdependent parts of a larger system (van
Lange\Ielde 1994). This concept, which includes humans as part of a larger system, is not new.
In 1926 Smuts stated that ‘the cosmos is composed by wholes in a hierarchical setting’
(Zm‘l'ieveld 1994 p. 13). It is found in Aldo Leopold’s land ethic, where he held that people are a
part Of the larger ecological system. As part of the system, humans have responsibility to the

larger System.

Chapter 2

43
The holistic axiom, which states that ‘the whole is more than the sum of its parts,’

provides the basis for studying entities without knowing all the details of their internal functions.
It is not necessary to understand all the properties of components within the whole in order to
understand the whole. The holistic approach is in contrast to the reductionist approach, where
understanding is achieved by reducing the topic of study to its parts, and through an
understanding of the parts the whole is understood. A landscape is a complex system that cannot

be reduced to its component parts. Holism is at the heart of landscape ecology.

While each whole is a system unto itself, it is also connected with and dependent on
others (Zonneveld 1994 p. 13). The role of ‘holism’ and ‘general systems theory’ is useful in
understanding landscapes as a basic unit of a whole and as wholes within wholes. A
conglomeration of wholes forms yet another whole system at a higher hierarchical level, with
complexity and heterogeneity increasing with each hierarchy level. The notion of scales parallels

the concept of levels of organization held by ecologists. According to this concept , each level of

OTSaDization has special properties.

A landscape is a living system, which like all living systems is composed of subsystems,
and at the same time is part of higher order systems. Zonneveld uses a translation from

‘Lands Chapstall’ provided by Schroevers (ed) 1982 to provided a holistic landscape concept:

“the total of abiotic and biotic phenomena and their interrelations in the three
dimensional space on the earth surface. It can be observed and recognized by its
horizontal and vertical structure and its combination of the variation in attributes. ..'I'his

holds as well for the material and organisms us (as) such as for their activities and
artifacts.”

Chapter 2

 

44
We shape a landscape within a larger frame of reference, and the landscape we shape in turn

becomes a frame of reference for the smaller landscapes within it in a hierarchical relationship.
The holistic landscape concept defines the landscape as the concrete space-time system of the
total human ecosystem, with the ecosphere as the largest global one and the ecotope as the
smallest rnappable landscape unit. Lovelock (1979) introduced the term Gaia for the highest
hierarchical level of landscape in this ordering process. Using Lovelock’s Gaia concept,
Zonneveld suggests that the highest hierarchical level of landscape, although not an organism, is
an ‘organization’, a ‘system’, where “the whole is more than the mere sum of the parts.”
(Zonneveld 1994 p. 15) A lower-level landscape unit commonly used in landscape planning,

natu ral resource management and ecosystem analysis is a watershed or drainage basin.

By applying a holistic concept, landscape complexity may be simplified by examining
the properties and mechanisms at each scale level in the landscape hierarchy. Land use planners
have recognized this technique of reducing complexity by decomposing the landscape into a
hicraI’Cllical framework. For example, by decomposing the state landscape into county

landscapes, boundaries can be put on the component systems, such as political and social
SYStems - The county can be decomposed into township landscapes, thereby simplifying the
”Stem further, perhaps placing boundaries on rural and urban townships. Each scale level has it
0w“ Properties and mechanism, its own set of values and its own institutional ways of doing
things ' By dealing with hierarchical scales, managers have typically been able to capitalize on
known properties and mechanisms. However, this approach also permits managers to avoid the

complexity of the highest level system, thus missing out on other opportunities.

Though land planners and managers work on a small scale, they must take into account

the li'u‘age of humans and ecology on a broader scale. Many have realized that their work on

Chapter 2

 

 

45
pieces of land within a landscape have led to design and management solutions that have failed

along social, ecological and economic lines. When we shape a landscape of any size, we need to
place it in a larger perspective, to see the web of relationships and avoid breaking critical strands,
and sometimes perhaps to create new ones (Lyle 1985 p. 24). A particular development project is
a part of may larger systems, for example a residential development is part of a township
political system, a watershed system, and an economic system. In turn these larger systems are
only a component part connected by processes to even larger systems, a state plan, a regional
watershed and part of the overall national economy. Additionally, this development is made of
small er subsystems, perhaps smaller habitat ecosystems and individual households. There are
flows and connections between systems, subsystems and larger systems, and additionally there
are linkages and connections from system to system (i.e. from economic systems to political to
ecological systems). No one system or subsystem is more important than another, and the
importance of each will change through time. What is critical is the broad perspective.
Additi onally, landscape ecological studies strongly suggest that a broad-scale perspective
incorporating spatial relationships is necessary (Turner 1989). A broad view is necessary to
correctly identify problems, opportunities and their ramifications. Due to the dynamic nature of a
landscape, this broad view may need to change with time. Additionally, the many
interconnections make it a challenge to select the perspective that is broad enough to encompass
the issue at hand. The landscape problem must be identified at the correct level; a focus which is

too narrow will lead to “potential solutions” that are doomed to failure.

Landscape Characteristics: Structure, Function and Change

As a living system, a landscape exhibits three broad characteristics: structure, function,
and change. Landscape ecology focuses on these characteristics in part because they apply to any

1
andsc'Elpe from urban to pastureland and therefore provide a means for analyzing and comparing

Chapter 2

46
varying landscapes. Structure refers to the spatial pattern or arrangement of landscape elements

and ecological objects; function refers to the movement or flow of components, including
animals, plants, water, material, and energy between landscape elements; and change refers to

dynalnics or alternations in spatial pattern or mosaic through time (F orrnan and Godron 1986,

Dramstad et al 1996).

Structure provides the framework within which landscape management decisions must be
made because spatial pattern determines movements, flows, changes and rate of changes. In
other words, the spatial pattern determines function and change. With an understanding of the

landscape pattern, landscape managers can make appropriate decisions on how the landscape

functions and changes, allowing them to influence and direct desired changes. The structure of a

landscape or region is based on three elements: patches, corridors and matrix, which provide a

has is for comparing disparate landscapes.

Patches are the structural feature of a landscape. A patch is a nonlinear surface area
difi‘ering in appearance from its surroundings. Patch characteristics include size, shape, type,
loCéltion, degree of heterogeneity, boundary and number. Patches can be large or small, for
exaltI‘Iple a national forest or an agricultural plot; they can be numerous or scarce. They provide
1’0“) Opportunities and challenges. For example, a wetland patch may be perceived as a challenge

In a residential development or it may be viewed as an opportunity for passive recreation.

Patch shape, as defined by their boundary and edges, may be the focus of landscape
mall"-Elgers. As human development continues its expansion into natural environments, the edges
created will increasingly form the critical point for interactions between human-made and natural

habitats (Dramstad et al 1996 p. 27). Edges often represent the transition zone between two types

Chapter 2

47
of habitat. Landscape designers must recognize the value of these edge habitats and design, plan

and manage them with respect for their ecological, political, administrative and social values.
Patches and corridors may be the result of geomorphological processes (e.g. disturbance,
environmental heterogeneity and human intervention) or the direct result of landscape
management decisions. Patches can be manipulated by landscape architects and land-use planners

to accomplish an ecological function or objective (Dramstad et al 1996 p 27).

A landscape can be perceived as a system of patches of different types, shapes, and
functions and the interactions among them (Forman and Godron 1986). By studying patterns and
distribution, landscape functions can be better understood, and that understanding can only lead

to better landscape management. Patches are often connected by corridors and embedded in a

matrix.

Corridors are narrow strips of land that differ fi'om the matrix on either side (Forman and
GOvzlron 1986). Corridors can be used for transportation, protection, barriers and for aesthetic
reElsons. They are found in nearly all landscapes in one form or another, whether a transportation
line, hedgerow or stream. Nearly all landscapes are both divided and at the same time tied
tOg'itther by corridors (Forman and Godron 1986). Not only can corridors function as links, but
also as barriers and filters to species movement. Corridors enhance or prohibit movement of
peop 1e, animals, products and energy throughout the landscape. There is a need for landscape
cont) ectivity. Structural characteristics of corridors include width, degree of connectivity, amount

Of cuWature or linearity and presence within a interconnected network. Landscapes need a degree

0f connectivity, and this may be achieved through corridors. Connectivity is a measure of

8initially contiguity within a corridor.

Chapter 2

48
Forman and Godron define a matrix as a surrounding area that has a different species

structure or composition. The matrix is considered the most extensive and most connected
landscape element type, and therefore plays the dominant role in the functioning of the landscape.
Fonnan and Godron (1986) present two helpful definitions of the matrix concept: the
homogeneous mass in which small differentiated elements appear and the binding material that
surrounds and cements independent elements. A matrix may be defined by the examining the
relati we relationship between landscape elements. When one type of landscape element is
cons i derably more extensive than others this dominant element type is the matrix. Another type
of matrix may be defined by high levels of connectivity, for example a hedgerow network. A
third matrix definition places the emphasis on landscape dynamics rather than using a structural
focus. The matrix is the landscape element that exerts the greatest degree of control over
landscape dynamics. In summary, the criteria for determining the landscape matrix are: (a) it has
a greater relative area than any patch type within it, (b) it is the most connected portion of the

landscape, and (c) it plays a predominant role in the dynamics of the landscape (Forman and

Godron 1986 p.186).

An understanding of patches, conidors and matrix is particularly useful in conservation
dCCiSions. The selection of patches for conservation should be based on their: i) contribution to
the Overall system, how well the location of a patch relates or links to other patches within the
larkiscape or region; ii) unusual or distinctive characteristics, i.e. whether a patch has any rare,

threatened or endemic species. These same principles apply to development activity, where the

moV'enient of people is the focus.

Chapter 2

 

 

 

J]

F?-

2'4

'1

‘Z—J

49
Scale Dependency of Landscape Characteristics

The structure, function and change of landscapes are scale dependent. Natural and social
processes occur in a specific time and spatial scale (van Langevelde 1994 p. 38). For instance,

Spatial patterns, degree of heterogeneity and fragmentation are all dependent on the grain of

resolution.

An important consideration in landscape ecology is spatial scale. Landscape managers
must define the spatial resolution, the grain, which is the finest spatial resolution within which
data are collected, and they must define the extent, or the size of the problem area. Given the
complexity of the landscape system, defining spatial scale may not be a straightforward task. As
stated earlier, landscape studies require a transdisciplinary approach, and the spatial resolution
and extent for a given problem may be defined differently depending on the disciplines. For
example, a politician, a planner and a limnologist may define a contaminated water quality
PFOblem extent differently, the politician basing it on voting districts, the planner on his/her
infrastructure limits, and the limnologist on hydrologic boundaries. Furthermore, the holistic
Perspective needed by landscape ecologists requires information and data that may not exist or
may be at varying spatial resolutions, and may require aggregation or interpolation. The difficulty
in addressing this should not prevent the prudent landscape researcher from continuing his/her

m"’eStigation.

Of particular concern to landscape managers is the overlap, or lack thereof, between
po lit ical and ecological boundaries. Boundaries may also utilize ecological, political or
ministrative divisions. The relationship between the natural ecological boundaries and the non-
ecol<>gical boundaries is critical to landscape management. The ecological boundaries may

co - . . . . . . .
“taln numerous political jurisdictions, or the reverse may also be true, where a social problem

Chapter 2

 

‘1‘?

SI

be?“

73

50

crosses numerous ecological entities. Examination of spatial dimensions is needed to understand

the effects of landscape policies and the extent to which they or their driving forces reach.

Traditionally, space has been the dominant concern in landscape studies, and has
diminished the importance of time. In part this is due to varying dimensions of time; namely,
geological, biological and human history, and the difficulties associated with integrating them.
Whi l e space is a driving concept in landscape analysis, time is also of critical importance. The
potential for understanding environmental phenomena in term of their dynamics, such as origins,
namre of change, and interrelation and roles in complex systems, is limited because inventories
do not cover interactions over time (Marsh 1989). To contend with varying dimensions of time,

simulation modeling may permit examination of landscape process over the longest variable time

Span.

Another aspect of the temporal dimension in landscape management involves change
dfittitction, which uses multi-temporal data sets to discriminate areas of landscape change.
Through change detection and analysis of comparable data sets from the same time frame,

latltiscape processes - natural and social - may be better understood.

Changes in Landscape Characteristics - Fragmentation

Landscape structure and function can be understood and evaluated in terms of both
pattern and scale. Landscape health can be evaluated by the overall connectivity and the degree
0f ikl'Egmentation. Again connectivity is a measure of the spatially contiguity. Networks and
interconnected corridors indicate landscape function. Additionally, landscape managers can
“con rage or inhibit flows and movements across a land mosaic. Fragmentation is both a

laruiscape pattern and a land transformation process. As a process it may result from natural

Chapter 2

5 l
disturbances or landscape management decisions (Dramstad et al 1996). Fragmentation is a

national issue due to land use activities. Urban sprawl and suburbanization are associated with

fiagnientation. As urban development encroaches on agricultural and open space lands in a

unguided pattern, the result is sprawl. “Fragmentation, along with perforation, shrinkage and
attrition are key spatial processes that cause habitat isolation and loss over time. Fragmentation
is the breaking up of larger/intact habitats into smaller dispersed patches. Perforation is the
creating of ‘holes’ within an essentially intact habitat. Shrinkage is the decreasing in size of one

or more habitats. Attrition is the disappearance of one or more habitat patches.” (Dramstad et al

1996 p. 35)

The spatial scale at which fragmentation occurs is important when identifying
management strategies to contend with the broken and discontinous landscape. “A finely
fl‘agrriented habitat is normally perceived as continuous habitat by a wide-ranging species,
Whereas a coarsely fragmented habitat is discontinuous to most species. Only by recognizing and
addressing landscape changes across different scales can planners and designers maximize

Protection of biodiversity and natural processes.” (Dramstad et al 1996 p. 41)

Role of Advanced Technologies in Landscape ecology

Given landscapes ecology’s origin in remote sensing techniques, the role of advanced
tec'"Ill‘lologies in landscape ecology is not unanticipated. To better understand the landscape as a
whole system, with interconnections and emergent properties, advanced technologies used within
a new holistic landscape paradigm will prove useful. Schultink noted that the applied
technologies of remote sensing and spatial systems offer the greatest potential to provide location
spec ific, analytical and monitoring capabilities to support ecologically based, sustainable

development planning (1992).

Chapter 2

52

Because the landscape is usually presented at large spatial scales and involves many
individual bits of information, it lends itself to remote sensing and to computer analysis and
synthesis (Golley 1987). Landscape studies may involve large spatial extents, from watersheds

to g] obal dimensions. Studying an extensive area may be limited by the ability to collect data.
Remote sensing addresses this limitation. While collecting information and data onsite may be
impossible, remote sensing permits data collection with the use of sensors that can be remote
from the phenomena (Jensen 1996). Remotely sensed data can help in identifying landscape
patterns. Earlier it was noted that the choice of processes determines the structure and pattern of
the landscape. Since patterns are more recognizable than processes, examination of the patterns
can be used to gain insight into the landscape’s ecological and social processes. Application of
remote sensing is premised on the integration of multiple interrelated data sources and analysis
Procedures (Lillesand and Kiefer 1979). This is where geographic information systems (GIS)
will prove useful in landscape management. With the use of GIS, the spatial patterns of change
can be analyzed over space and time. Landscape evaluation that involves GIS and remotely

sens ed data will allow predictions to be made about land use patterns, and therefore landscape

managers can study the impacts of different management practices.

3 h a pter Summary

The goal of landscape managers is to meet society’s needs while maximizing ecological
integrity and minimizing land degradation. By using landscape ecology principles, more
integl‘ative designs and plans can be developed and thus reduce the landscape fragmentation and
degl"adation. The philosophy and practice of landscape ecology combined with the practice of
lat‘Ciscmpe management prove most useful in addressing land use issues. Like a landscape, land

Se lSsues bring together economic, socral and envrronmental opportunities and conflicts. Only

Chapter 2

53

by respecting the complexity of landscapes and the land use issues which exist within them can
landscape managers, planners and communities address the problems and optimize opportunities

for both present and fiiture generations.

Chapter 2

Chapter 3

Land Use

Land and how it is used affects everyone. . . Across the nation, sprawling suburban
development has depleted downtowns, fostered racial segregation, increased the cost of
government, threatened air and water quality, eaten up plant and wildlife habitats and
paved over some of America’s best farmland. Throughout the US people are feeling a
growing sense of urgency about land and their communities. (Daniels and Bowers p. 1)

Introduction

This chapter will address the broad topic of land use, beginning with a definition of land
use and a discussion of why land use issues are difficult to address and why they must be
addressed. A overview of land use control in the United States and Michigan is then presented to
Provide insight into land use perspectives. The regulatory context of land use is also presented.
Land use trends will be discussed, with an emphasis on sprawl. An overview of traditional
81'0Wth management techniques for contending with sprawl is presented, followed by a statement
on their limitations. The concept of transferable development rights (TDR) is presented as a

grOWth management alternative that can address the land use issue of sprawl and its ramifications.

La nd Use

Defining Land Use

Land use and land cover reflect both the impact of landscape resources on human activity
and the human influence on the landscape. An example of the earlier is the impact of waterways
on Settlement patterns. An example of the latter is the impact of residential development on

w‘ 1d] ife corridors. Land use is important because it is directly related to fundamental landscape

54

 

55

components and processes. Land use and land use decisions have a direct relationship with land
productivity, species diversity, hydrology and water quality, settlement patterns and community
quality. The strength of this relationship is dependent on the land use activity and the landscape

setting. Land use effects can be limited to a local setting or be as far-reaching as global.

Land cover refers to the physical, chemical, or biological categorization of the terrestrial
surface, e. g. grassland, forest, or concrete, whereas land use refers to the human purposes that are
associated with that cover type, c. g. raising cattle, recreation and urban living (Meyer and Turner
1994 p.x). A single category of land use may be associated with a variety of land covers.
Similarly, a single land cover may support multiple uses. For example, residential land use may
have tree cover, grass cover, road cover and roof cover while a forest may be used for timber
production, recreation, or wildlife preservation (Lillesand and Kiefer 1996). Land use relates to
human activities on the land or within the landscape. Because land use is associated with human
purposes, land use has primarily been the object of study of social scientist such as geographers,
planners and economists. Similarly, land cover has traditionally been studied by natural scientists
whose focus is on the physical state of land (Turner et al 1993). With the advent of a holistic
landscape concept, it is evident that land use issues can be appropriately addressed only when

social and natural scientists work together.

Defining land use issues is not an easy task. The term references land, but in actually it is
much more. The land, its associated resources, water and air must all be considered. Associated
resources include natural, social and economic resources. The challenge in defining land use
issues is also complicated by the interconnections between land use issues. At the 1998 Land Use
Forum at Michigan State University, participants were charged with the task of identifying land
use issues. They soon realized that one issue was difficult to separate from the next. Agricultural

land preservation, suburban sprawl, decaying urban centers, segregated communities, and

Chapter 3

56
infiastructure planning were all land use issues and were all related. For the purposes of this

paper, a land use issue is any topic, opportunity, conflict or problem regarding land in a holistic

sense. Because land is a holistic entity, land use issues are actually landscape issues.

Why Land Use Issues Are Difficult to Address

Not only are land use issues difficult to define, they are difficult to address. This
difficulty can be attributed to three main characteristics: land use issues cross disciplines, land use
issues typically cross-jurisdictional boundaries, and land use issues involve the balancing of both

public and private interests.

Because land use issues almost always span disciplinary boundaries, e. g. economic,
sociology, geography, hydrology, and political science, a systems approach is needed to address
them. Land use planning has historically ignored the holistic nature of landscapes. Decisions are
usually made on a resource-by-resource basis. Land use decisions have been made with too
narrow a focus, based on either an economic, social or environmental aspect rather than
considering all of these landscape components. This is evident in the number of land use
planning projects that are geared toward single resource management for a single purpose.
Because a landscape reflects both the environmental elements and function of ecosystems and the
social elements and functions of human systems, land use decision can not be made solely in one

arena.

Additionally, land use planning is usually based on political boundaries and does not
recognize ecosystem components and functions that require planning on a broader scale. While
the patterns that emerge may be in line with political boundaries, they disregard the ecological

functions that are necessary to sustain the environmental, social and economic structure over

Chapter 3

 

57
time. In order to manage a landscape, the natural boundaries must be respected. Herein lies a

critical flaw in land use planning, where land use decision are typically made within political

boundaries which have little regard for environmental spaces.

Conflicts between differing political jurisdictions that share common natural resources
are compounded by the battle between private and public interests. In order to sustain the
environment and the economic viability that the environmental resources provide, cooperative
proactive land use planning is needed. A balance must be struck between private interests,
expressed through economic development, and public interest, such as environmental
conservation. Both are needed, and neither can be ignored in order to maintain and improve an

area’s quality of life.

Because land use issues cross disciplinary and jurisdictional boundaries and involve the
balancing of both public and private interests, in order for communities to effectively address
land use issues cooperation is needed: cooperation between disciplines, jurisdictions and public
and private interests. In Michigan, property rights, the concept of home rule, and management of
resources as individual commodities have been counterproductive to cooperative land use
planning. Without cooperation and coordination landscapes will be unprotected and susceptible
to alteration, land and water quality will degrade, habitats will be lost, urban sprawl and its efi’ects
upon agricultural and open space land will continue and landscape aesthetics will diminish

(MDNR 1992 p.2).

Why Land Use Issues Must be Addressed

Neil R. Peirce concisely stated why land use decisions are critical. Peirce (1997) stated

that “land use is a remarkably good barometer of the overall character, the priorities, the nature of

Chapter 3

58

our society. The reason is its interconnectedness. When any set of land use decision are made,
the repercussions will start popping up on every front, from economics to urban form to

transportation, from social equity to property rights to our treatment of nature.”

The impact of human activities on the landscape is not a new phenomenon. As long as
humans have existed, they have affected the land. However, as land and its resources are further
consumed and the population continues to increase, land use issues become more critical.
Furthermore, the economic disparity between classes, communities and nations is becoming
greater, and the equitable distribution of cost and benefits of land use activities becomes more

challenging.

Land use, its type, and intensity determine how the landscape appears and how it
functions, economically, socially and environmentally. Because all economic, environmental and
social systems function within a landscape, and that landscape is a limited resource, all landscape
components are affected by land use decisions. Land use, more than any other human activity,
impacts water quality, sensitive environments, public health, public service delivery, economic
development and community character (MUCC 1993). Land use effects are more than
environmental; they are also social and economic. Land use influences the segregation of income
classes. Land use decisions have directly impacted which socio-economic groups have been able
to move out of decaying urban cores and which are forced to stay (Downs 1996). Alternative
land use patterns result in differing economic and fiscal impacts upon communities (Burchell
1996). The effects of land use activities are far-reaching across space and time. Furthermore,
these effects can be irreversible and thus diminish the options for future generations. Land use
directly affects on how present and future generations will live and what their quality of life will

be.

Chapter 3

59
History of Land Use Control

To identify critical land use issues, a brief examination of the history of land use control
in the United States and Michigan will be useful. A historical examination provides information
on how land has been valued and what land use agendas have resulted. This will provide a better

understanding of where we come from and where we want to go.

Settlement to Early 1800s

Our national and state histories are marked by struggles over land. In Michigan’s early
history, British, French, Native Americans, and American colonists fought over land and its
natural resources, mainly fur. Of the original colonies, only seven had claims west of their
boundaries. The remaining six colonies argued that those lands should become common property
under congressional control and refused to sign the Articles of Confederation until the claims to
western lands were relinquished. Once all claims were ceded, the last in 1802, Congress gained
title to the western lands, and made provisions for a territorial government for the Northwest
Territory. A territorial government was needed because there was more than one interest party,
and the developing society required an alternative to “might makes rights” in settling land

disputes.

The Ordinance of 17 85 provided for the purchase of Native American land titles, survey
of territorial lands, sale of lands by public auction, and reservation of certain lands for public
schools. The larger areas for sale were targeted to wealthy individuals and companies who would
then resell to settlers. Thus began the American tradition of land speculation that is still evident
today. This Ordinance reinforced the notion of land as commodity, with consumption as its goal.
The resultant partitioning of land into townships and sections ignored environmental and social

considerations, and has ultimately led to the fragmented planning framework that exists today.

Chapter 3

60

The Ordinance of 1787 provided for a territorial government and for the division of the territory
into states. The need to legislate the country as a whole called Congress to draft a new
constitution that took effect in 1789. It gave Congress the power to dispose of and regulate the
territory of the United States. This is the basis of constitutional authority for disposing and

administration of the public domain.

In 1805, President Jefferson divided the Indiana Territory into two separate governments,
one of which was Michigan. Congressional policies from the late 17005 through the mid-18005
shaped Michigan’s public land disposal policies. These federal policies included land grants and
sale according to the Ordinances of 1785 and 1787; the Act of 1820, which provided a general
sales policy; and Pre—emption acts, in response to squatters who occupied and cultivated the land
while awaiting public survey. Additionally, park, wildlife and forestry programs in the 18005
were established for lands in the public domain. Control of the private use of land was possible

only by outright acquisition (Schultink 1997 pl9-20).

1830s through 1920s

From the mid-18005 through the 19205, there was a change in national land use policy,
from an era marked by plenty, through a conservation period, and culminating in an era of
abundance. The late 18005 were characterized by private land ownership; land was viewed as
unlimited, and the prevailing attitude in Congress was to quickly put as much land into private
hands as possible. The frontier was viewed as an experimental site for new tenure relations, for it
was unencumbered by patterns of occupancy and controls. Today, the urban fringe is perceived
similarly, free of an established pattern and regulations. From 1830 to 1840 Michigan
experienced a settlement boom mainly as a result of surveying and transportation improvements,
including the Erie Canal and Great Lakes steamship lines. Michigan’s land exploitation was

manifested in lumbering, the establishment of lumber towns and their supporting infrastructure.
Chapter 3

61

The Homestead Act of 1862 made available free lands for settlers, providing for 160
acres of farmland free of charge to the settler with a resident requirement of five years. This Act
thus furthered the concept of land as a commodity. The Homestead Act was aimed at, first,
colonizing the largely unsettled land in the western part of the country, and second, developing of

an economic system based on private property rights (Van den Brink 1997 p.5).

At the national and state level, economists and natural scientists began to question
unrestricted exploitation. These concerns resulted in numerous acts, including the Revision Act of
1891, the Morrill Act of 1862, the Second Morrill Act of 1890, and the Hatch Act of 1887. The
effects of these acts were realized in the 19205 with the abundance of food production and the
depression of farm prices. The role of new technology increased the yield of the land. Congress
was concerned with abundance, the transfer of people out of agricultural activities and the
reversion of marginal agricultural lands. The government examined which lands should be

removed from private ownership and placed in the public trust.

In Michigan the creation of independent commissions including the Geologic Survey,
Fish Commission, Forestry Commission and Public Domain Commission marked a shift in land
use philosophy. Until this time, paralleling the prevailing national attitude, promotion of private
ownership was paramount. The pioneer attitude of “conquer and exploit” determined how land
resources were treated. With the creation of commissions, the focus shifted to propagation with
a specific resource orientation. The Public Domain Commission was charged by Acts 188 P.A. in
1907 and 280 P.A. in 1909 to investigate and develop a plan for the protection, improvement,
utilization, settlement, and administration of state lands, in order to provide a consistent and
comprehensive policy in the administration of such lands (Hosford 1978). In Michigan, the Public

Domain Commission was succeeded by the Department of Conservation in 1921. This marked

Chapter 3

 

62

yet another change in public attitude, one that emphasized resource protection and management in

addition to allocation and propagation.

The concept of America as land of plenty was deeply imbedded, and Act 294 P.A. 1911
provided evidence. This act encouraged immigration and settlement in Michigan. The
promotional function of this act is exemplified by the distribution of thousands of copies of a
publication entitled “Michigan, the Land of Plenty.” The concept of “land of plenty” lagged

behind national trends, where the period of plenty was in the late 18005.

In the 19205 states authorized local units of governments to adopt zoning and subdivision
regulations. The Standard State Zoning Enabling Act (1926) and the Standard City Planning
Enabling Act provided powers for planning, control of subdivisions, official maps and regional
planning. Underlying these Acts are two assumptions: that the Acts authorize control of privately
initiated development rather than a system under which government is made the primary
development agency, and local government as distinguished from some other level of government

is to exercise most of the control power (Hagman and Juergensmeyer 1986 p.48).

Depression Years through 19305
During the Depression Era from 1931 through 1942, public sector action in relationship
to land, land use, and ownership was prevalent. There was public purchase of vast acreage of
private land and tax reverted land. The 19305 brought widespread abandonment of farms and
lIlomes in northern Michigan due to non-payment of taxes and mortgage foreclosure. Twenty
percent of the land in Michigan is public, much of which was obtained by tax reversion during the
19305 (Wyckofl’ 1995). The Federal government examined resource use and how public policy

affected the resources. Michigan took advantage of the Relief Acts to promote the advancement

Chapter 3

 

 

63
of the conservation of the state’s natural resources. Education and training in land management

were common efforts in this period.

19405 through 19505

At the federal level, this period was marked by production. The role of innovative
technology in agriculture and production played a key role in shaping land patterns.
Specialization became the rule of thumb. Additionally, numerous programs at the federal and
state levels emphasized natural resource improvement through education. During the 19405, as
part of the state’s land use program, authorization was given for the sale of public lands suitable
for increased agricultural production, with the state reserving certain rights. This action indicated
the ever-present notion of land utilization, while limiting land ownership. Land programs focused
on cooperation at the local level in the distribution of excess state lands and acquisition of
recreational lands. During the 19505 the state’s focus shifted toward habitat management. This
affected land use issues because habitat management required ecosystem recognition; therefore,

planning at ecosystem levels such as watersheds gained strength.

19605 to Present
Since the 19605, and with a surge in the 19705, there have been environmental concerns
and legislation at both the federal and state levels. Accountability had become a focus, with the
hopes that it would lead to participation and responsibility. In Michigan, this period brought
public trust protection. Given that there had been no explicit land policy throughout US history,
\l'lis period called for a new land policy to foster land use patterns that protected environmental
amenities while recognizing the need for orderly economic growth (Hite 1979). There was a shift
in the settlement pattern first to the suburbs, then to rural areas. Additionally, the perception of

environmental crisis promoted a comprehensive perspective to resource planning. Of particular

Chapter 3

 

 

64
importance in Michigan, two Executive Orders in 1973 transferred land use functions from the

Govemor’s office to the then Department of Natural Resources.

In 1970, Governor Milliken recognized a growing concern for proper land use by
appointing a Special Commission on land use. The use of the state’s limited land resource and
conversion of lands causing limitations on future production and loss of development opportunity
were the issues to be addressed. In 1973, the Department created the Office of Land Use, which
produced a program document entitled “Michigan’s Future Was Today.” Hosford identified
elements of the program that guided the state’s land use efforts. The first element was that land
resources planning had to be a public enterprise. The democratic concept in land use issues was
still paramount. The modern twist came in another element, that the ideals of democracy in
formulating land management programs had to be viewed from two perspectives: one, that rights
entail responsibilities, and two, that people of the future must be considered (Hosford 1978). The
notions of stewardship and sustainability were then directly addressed. The colonial notion of
property with rights of use and abuse was replaced. There was no absolute right in land.
Property did not include the right to utilize the land to the extent that it loses the function for

which nature created it.

Regulatory Context

Land use in the United States is not federally regulated. Although the US. does not have
a single system for land use planning, a significant number of federal acts have an impact on land
use decision making, including: the Federal Coastal Zone Management Act (1972); the Federal
Clean Air Act (1979), the Federal Water Pollution Control Act (1972); Rivers and Harbors Act
(1899); Safe Drinking Water Act; National Environmental Policy Act and the Intennodal Surface

Transportation Efficiency (ISTEA) Act of 1991. Rather than a national land use planning system,

Chapter 3

 

65
the authority to plan is relinquished to the states. Each state has its own constitution, planning

and land use control laws and practices. Under the Tenth Amendment of the US Constitution,
powers not delegated to the United States by the Constitution are reserved for the state. ‘Police
powers’ are one type of delegated authority. Public regulation of private property, including
zoning and subdivision, are based on the police power. Under the police power, rights of an
owner can be restricted in order to protect the public health, safety, morals and general welfare.
There are number of legitimate public purposes. Some are to protect the public health and safety,
for example floodplain protection. Other purposes serve to preserve natural, scarce or valuable
resources, for example protection of groundwater recharge areas. This is defensible under the

public’s right to protect its general welfare.

The Fifth Amendment of the US. Constitution prohibits the taking of private property
without just compensation. Land use regulations are legitimate and do not constitute a taking
unless the regulation or restriction either ‘categorically’ takes ‘all’ economically viable use; or
‘exacts’ an interest in land from the property owner where there is no reasonable relationship
between the property owner’s proposed use and the impacts to be reduced or prevented (Olson
1996 p. 10). Land use restrictions that do not take away all economic viable use nor amount to an

exaction without reasonable relationship have been upheld as a legitimate form of police power.

Very few states assume a primary role in planning. Often state planning is restricted to
functional planning for specific problems (Van den Brink 1997 p.6). A number of states assumed
partial responsibilities in planning following World War II, specifically in the 1970’s with the
environmental movement (Schultink 1997 p. 19-20). In the 19805 there was a growing concern
for inadequate infrastructure that brought a second wave of comprehensive planning and land use
systems. While a limited number of states have implemented statewide land use planning

systems, most notably Vermont (1970), Florida (1972), Oregon (1973), Colorado (1974), Hawaii
Chapter 3

66
(1978), New Jersey (1986), in most states the planning responsibility is passed on to local

governments. Even though counties may have planning authority, planning is most often
exercised at lower levels, with townships and municipalities. The local level is the most
important planning level, not only in states that lack a statewide land use planning system, like

Michigan, but also in states that have implemented a statewide approach.

Local authority to plan may or may not be established through home rule authority.
Home rule is the principle or practice of self-govemment. Home rule gives local governments the
power to act as they want, not only on planning issues, but also, for example, on taxing issues
(Van den Brink 1997 p.5). Even in states that are not legislatively home rule states, the sanctity
of home rule is powerful. Local units of government do not typically want to concede decision-
making authority, even if such concessions could lead to a greater good. Because American land
has been managed at the local scale there is an absence of cooperative planning. Various
attempts to achieve some procedural reform and to expand the powers of county, regional and
state planning have been thwarted due to the perception that such efforts are antithetical to a
state’s engrained home rule structure. Without a statewide or regional land use approach, it is
uncommon for local planning and zoning to be implemented in conjunction with adjacent
jurisdictions. Instances where cross-jurisdictional land use planning has been investigated
typically amount to advisory committees. While this is a promising first step toward regional

planning, integrated land use planning based on ecological boundaries requires much more.

Michigan lacks a statewide or regional planning system that encourages appropriate land
use with consideration for sustainable resource and long-term ecosystem health (MDNR 1992
p.22). The environmental movement (19705) began an era of landscape recognition in Michigan.
“State government focused attention on land use, and comprehensive planning laws were

considered by the legislature. These did not pass and the result was a series of piecemeal

Chapter 3

 

 

67

environmental laws in the 19705 and 19805 and a series of piecemeal economic development
legislation in the 19805 and 19905.” (Rustem 1996) State environmental acts which influence land
use include: MEPA, Michigan's Environmental Protection Act (1970); Natural River Act of 1970
(Act 231 of 1970); Shorelands Protection and Management Act (PA 245 of 1970); Inland Lakes
and Streams Act (PA 346 of 1972); Soil and Sedimentation Act (PA347 1972); Farmland and
Open Space Act (PA116 1974); Sand Dune Protection and Management Act (Act 222 of 1976);

and Goemaere-Anderson Wetlands Protection Act (PA 203 of 1979)'.

Rather than a statewide land use system, Michigan has approximately 1800 planning
entities that typically make land use decisions in isolation (Americana Foundation 1992). At
present, Michigan has 83 counties, 1,242 townships, 271 cities and 263 villages (Schultink 1997
p. 23). These entities are permitted to plan under four state planning enabling acts that permit but
do not require planning at local units of government. Enabling legislation typically specifies the
development activities that can be regulated; the broad techniques that can be used, including
zoning, districting, and development review; the method of implementation, including staffing,
financing; the functions and design of planning commissions; and enforcement power (Nelson

1992 p. 93).

Michigan’s planning enabling acts are: Municipal Planning Act (PA 285 of 1931 AM.
152, Act 25), Township Planning Act (PA 168 of 1959), County Planning Act (PA 282 of 1945),
and Regional Planning Act (PA 281 of 1945). While the Municipal, Township and County
Planning Acts are similar, the Regional Planning Act is organized differently. Each permits the
creation of a planning commission. The three local Acts require a commission to prepare a plan.

A regional planning commission may prepare a plan, but it is not required. The Regional

 

‘ The Natural Resources and Environmental Protection Act (NREPA) of 1994 replaced the Wetlands
Protection Act of 1979. Additionally part 361 of NREPA replaced the Farmland and Opens Space

Chapter 3

l

 

 

68

Planning Act authorized the voluntary creation of a regional planning entity by any two or more
governmental units. In the early 1970's Governor Milliken's administration created fourteen
planning and development regions for purposes of meeting various state planning needs (MUCC
1993 p. 9-15). The end result was that local governments were encouraged to work in
cooperation to create operational regions. Michigan's planning statutes have not been revised to
include contemporary planning techniques and tools, for example authority for transfer of
development rights, purchase of development rights, concurrency and to create urban and rural

service districts.

The Planning Law Committee of the Michigan Chapter of American Planning
Association has been working on a Coordinated Planning Act that would combine the planning
enabling acts. They recognized a need for unified planning in Michigan. This unified act would
not require or permit the creation of a state plan. Rather, it would require coordination of

planning at and between all levels of governments that choose to plan.

While Michigan’s planning enabling acts provide a framework for local, county, and
regional planning, they do not make planning mandatory nor do they make a comprehensive or
master plan mandatory. It is not uncommon for rural townships with limited staff resources to
lack the administrative capability to effectively land use plan. Many communities, urban and
rural, do not have master plans, or their master plans and regulations are outdated. Additionally
there are municipalities with updated plans that are not consistent with their land use management
practices. The existing plans often amount to a vision statement, an inventory of existing
conditions or general guidelines. Even in communities that have plans, few are adopted by a
governing body. Of the local governments only 48% are known to have adopted comprehensive

plans and only 66% are known to have an adopted zoning ordinance (MSPO 1995).

 

Preservation Act

Chapter 3

 

 

69

In addition to the Michigan’s planning acts, the state has three zoning enabling acts; City-
Village Zoning Act (1921), Township Rural Zoning Act (1943), and the County Rural Zoning
Enabling Act (1943). In 1978 all three zoning enabling acts were amended to include four key
zoning techniques, namely site plan review, special land uses, planned unit developments, and
classification of nonconforming use. Previous to the amendment, these techniques were widely
used but not legally authorized. Each zoning act provides authority for local regulation of land
use. Zoning regulates land use through the delineation of zones or districts in which certain uses
are permitted according to standards related to bulk, height, lot area, and setback. Communities
are not required to adopt a zoning ordinance. County zoning ordinances can apply only to
townships that do not have zoning and cannot apply to land in a incorporated village or city. Over
900 townships have opted to exercise local planning and zoning authority, as well as over 200

cities and villages and approximately twenty-five counties.

An additional legislative act that has greatly influenced land use in Michigan is the Land
Division Act (1997) and its precursor, the Subdivision Control Act (1967). These acts established
a mechanism for a landowner to divide land into smaller parcels for sale or development. Under
the Subdivision Control Act, the following land divisions were exempt from meeting the platting
requirement: land division that did not cumulatively create more than four parcels every ten
years, each ten acres or less; land divisions that created parcels larger than ten acres in size; and
land divisions which transferred property from one parcel to another contiguous parcel. The
result was a state land use pattern dominated by ten plus acre parcels. In effect the act
encouraged the fragmentation of the landscape. An effort to address the shortcomings of the
earlier act led Governor Engler to sign a bill supported by realtors and homebuilders, but opposed
by farmers, local governments and environmentalists. Under the Land Division Act a new

schedule for land division was established. The new schedule allows a certain number of splits

Chapter 3

 

70

for any existing parcel with no ability to renew those splits. It allows for: four splits on any
parcel under ten acres; one split for each additional ten acres up to parcels 120 acres in size; one
additional split for every forty acres over 120 acres; two bonus splits if a new road is built or if at
least 60% of the original parcel is maintained in one parcel after the split; divisions involving
parcels over forty acres are not counted as splits; and new parcels over forty acres in size earn

their own split rights after a ten-year wait.

Land Use Trends

Across the United States, citizens are becoming increasingly aware of a land use crisis
with the loss of open space, environmental resources and farmland, the abandonment of urban
centers and the decline of established suburban settings and the fragmentation of the land.
Indications of this land use crisis are well cited. Between 1960 and 1987 urban area in the US.
grew from twenty-five million acres to fifty-six million acres (MRRAP White Paper on Absence
of Land Use Planning 1992). Nationally land conversion for urban development is largely
(eighty percent) associated with single family residential use (Schultink 1997 p. 19-20). By 1990,
urban and suburban settlements consumed almost one-third more land per person than in 1970
(Daniels and Bowers p.10). An American Farmland Trust report showed that between 1982 and
1992 every state lost prime and unique farmland to urban development (American Farmland
Trust 1997). Many communities are facing the same challenges, sustaining viable urban centers,
protecting niral communities, prime agricultural and environmental lands and containing the
urbanization of open and rural lands. Traditionally communities have focused on these issues in
isolation and have addressed each with separate land use control policies. In reality these issues

are interconnected and their solutions rely on an integrated policy choices.

Chapter 3

 

71

All of these issues are directly related to employment and residential decisions. Four
trends are evident. First, employment and residential land uses existed in the urban core.
Following World War II, the second trend became evident. People moved their residents from
the urban centers and commuted back in for work and commercial services. The following trend
saw employment centers moving out of the urban core. Residents could then live and work in
exurban areas. Employment opportunities were a driving variable for determining residential
location. Evident today is the fourth trend, where the employment opportunities and residential
opportunities are in different exurban centers. People are moving further out, and commuting
from one exurban area to another for employment and shopping. The Detroit metropolitan area
provides an example. Between 1955 and 1990, nearly one million people left Detroit for the
suburbs; the suburban population is three times greater than Detroit’s population (Daniels and
Bowers 1997). Detroit residents moved out of the urban center to suburbs, and businesses soon
followed. Today older established working-class suburbs are being abandoned for the greenfields
in surrounding rural areas. People are moving further away from the urban core, opting to reside

and work in communities scattered in the metropolitan area.

While it has been noted that the rural-urban fiinge is where population growth and land
use change is most evident, the line between rural and urban is exceedingly more difficult to
detect. The rural-urban fringe region lies ten to forty miles outside of urban centers (Daniels and
Bowers 1997). Daniels and Bowers note this area is characterized by two types of development.
The first is the continued wave of large residential and commercial projects as population centers
expand. The second, referred to by geographer Peirce Lewis as ‘the Galactic City,’ features
scattered houses and commercial strips held together by highways. Both types of development
are accompanied by fragmentation, adjacency of incompatible land uses and loss of cultural and

natural resources. Both types of development obfuscate the distinction between urban or mral.

Chapter 3

72
The land use pattern in the fringe is stale and monotonous, making it difficult to detect when one

community ends and another begins.

The United States covers nearly 2.3 billion acres; 839 million acres are in public
ownership and 1.417 billion acres are in private ownership. Of the privately held land,
approximately 940 million acres are owned by farmers and 400 million acres are private forest
land (NR1 1992 Census of Agriculture). Given that nearly ninety-five percent of the US’s
privately held land is in land uses that have traditionally been viewed as a holding ground for

firture development, landscape managers and citizens are at a critical juncture.

Michigan Land Use Trends

Michigan’s population grew significantly faster prior to 1960 than after 1960. Between
1980 and 1990 Michigan grew by .4%. In part this was due to the substantial out migration of
133,000 persons between 1985 and 1990 (Warbach and Wyckoff 1995 p.2). Despite this out-
migration, some Michigan communities grew due to in-migration. Essentially, the state’s
population was shifting within its borders. People moved from urban to suburban and mral areas.
As the economy recovered, Michigan’s population grew. “The State population increased by
228,914 persons between 1990 and 1994. The overall density in rural communities has risen
significantly in the last 30 years as a result of this trend. Population projections for the next 20
years suggest the trend will continue.” (Warbach and Wyckoff 1995) This trend has resulted in
substantial increases in the density of rural populations and stress on infrastructure, including
rural roads, emergency services and schools. This development pattern is much more costly to
service than pervious land use patterns because the development is scattered on very large lots
rather than concentrated in a compact pattern. This results in much more land converted for use

by fewer people than any period except Michigan’s original settlement. The Michigan Society of

Chapter 3

73
Planning Officials Trend Future Report (1995) projected that between 1990 and 2020, 1.5 to two

million more acres of land are going to be occupied by 1.1 million more people. This is a 63-
87% increase in land over 1990 and only a 11.8% increase in people. The amount of additional
occupied land represents as much urbanized land that served 9.2 million people in 1987 (Wyckoff
1997 p. 1). Despite the modest increase in the State’s population, growth and its effects on

Michigan’s landscape will be an issue for all Michigan communities, urban and rural.

This amount of additional urbanized land is alarming because land is a valuable resource
in Michigan’s economy. “Four industries in Michigan are dependent on the land: tourism,
forestry, mining and agriculture. Michigan tourism provides direct employment to approximately
130,000 people and in 1994 generated $8 billion. Forestry and forestry related products
contributed nearly $3.2 billion in economic activity and 68,500 jobs. In 1994, oil and gas
industries in the state contributed $599 million to the economy and provided jobs for 11,500
families.” (Rustem 1997) Michigan has 46,500 farms utilizing 10.1 million acres. These farms
produce $3.7 billion in agricultural commodities annually and employ 100,000 workers. Because
the focus of this study is on TDR, a technique typically used to address agricultural and open

space preservation, an examination of Michigan’s agricultural resources will be usefirl.

Despite the strong presence of farming, the state has lost 9 million acres since 1920;
between 1982 and 1992 the number of acres lost was 854,000 (Michigan Farmland and
Agricultural Development Task Force 1994). The highest loss rates are seen in the Grand Rapids,
Kalamazoo and Traverse City areas. The majority of farmland loss is attributed to urbanization,
the conversion of agricultural lands to residential, commercial and industrial uses. The result is
the fragmentation of Michigan’s agricultural landscape which leads to greater land use conflicts
and demands on. local government services and infrastructure. Fragmentation is encouraged

through economic incentives. A landowner stands to make more if the land is subdivided and

Chapter 3

74
sold as small tracts for residential use, rather than selling the entire farm. The practice of splitting

off and marketing the marginal or non-productive portions of farmland at inflated prices has
resulted in major increases in property values and taxes for the remaining farms (MSPO 1992
p.7). Many times the remaining farms cannot continue to keep the land in agricultural practice.
Additionally, the agricultural land that remains is becoming increasingly more specialized. The
family farm is being replaced by agribusiness. In order for farms to keep pace with their rising
property taxes, ad valorem taxes, those that remain in agricultural use must increase their
productivity. Many times this is accomplished through specialization, which in turn may lead to

greater environmental risks.

Michigan Land Use Issues

In 1992 a Relative Risk Analysis report set environmental priorities, resulting in the
ranking of twenty-four important State of Michigan issues. “Lack of land use planning that
recognizes the integrity of ecosystems” was as the top of the list, closely followed by the
“degradation of urban ecosystems.” (Rustem 1996, MDNR 1992) The lack of integrated land
use planning is a broad issue with far-reaching effects (MRRAP White Paper on Absence of Land
Use Planning That Considers Resources and the Integrity of Ecosystems 1992). In 1996, over
fifty land use bills were introduced (Rustem 1997, Wyckoff 1997, Norris 1997). These actions
give a strong signal that land use issues such as loss of agricultural land, destruction of
environmental resources, abandonment of urban centers, decreased quality of communities and

their inherent interconnections are rapidly moving to the forefront of Michigan’s policy agenda.

The results of the Trend Future survey conducted by the Institute of Public Policy and
Social Research (IPPSR) at Michigan State University (MSU) found that among the stakeholder

leaders, urban sprawl (11.5%) was mentioned most often as the most important land use problem

Chapter 3

 

75
facing the state, followed by redeveloping urban areas (108%), protecting private property rights

(8.1%) and preserving productive farmland (7.4%) (Hembroff 1995). In reality these problems
are interrelated. Without redevelopment, sprawl is more likely; with sprawl the preservation of
farmland is less likely. The key land use issues identified by land use practitioners at the MSU
1998 Land Use Forum were proper planning, familand protection, growth management, water
and sewer infrastructure, redevelopment and controlling sprawl. For each issue stakeholders and
common interests were identified. It became evident that all issues were related, involving
similar stakeholders with similar interests. Stakeholders listed under multiple issues included
residents, developers, local governments and officials, and landowners. Common interests
included prudent land use, sound planning, economic viability, fiscal health, fair distribution of
costs and benefits, environmental protection including water quality and preservation of open

space, and quality of life.

These issues are all related to development. As exurban development encroaches on
open space and rural communities, ecological, social and economic systems are threatened. The
implication of this increased urbanized area includes 1055 of agricultural and open space lands,
runoff and water quality concerns due to increase in impervious surface, abandonment of existing
infrastructure and existing communities and associated infrastructure costs. The implications go
beyond physical manifestations; there are social consequences as well. Because the dominant
low-density growth pattern excludes lower socio-economic groups from the suburbs and
contributes to the abandonment of urban infrastructure, the poor are forced to concentrate in
declining communities (Downs 1996). Between 1980 and 1990, Michigan central cities
continued to decline in population, Detroit lost 175,365 persons, Flint, Saginaw and Grand

Rapids declined by 18,850, 7,996 and 7,283 respectively (Warbach and Wyckoff 1995 p.2).

Chapter 3

76

The current predominant pattern of development is urban and exurban sprawl,
characterized by low-density development that extends from cities into rural areas. Sprawl is
land- and energy-consumptive, automobile dependent, requires a very high ratio of road surface
to development served and is often poorly planned in area-wide or metropolitan basis (Wyckoff
1997). Administratively distinct communities that are indistinguishable from each other
characterize the resultant landscape. The effects of sprawl result in the demise of community

character and the loss of quality of life for immediate and future residents.

Sprawl: A Critical Land Use Issue

Defining Sprawl

The phenomenon of rapid conversion and scattering of a multitude of urban land uses
away from a centralized urban core was coined in the early 19605 as “urban sprawl.” The pattern
of metropolitan growth dominant in Michigan and throughout America over the past five decades
has been unlimited low-density sprawl. Sprawl is a type of suburbanization; it is characterized by
unguided low-density growth. Urban dwellers seeking the tranquility, scenic beauty and space of
the rural setting move out to the country. In turn they demand a new infrastructure, minus the

congestion.

There are three types of sprawl: leapfrog, continuous and low-density (Kelly 1998).
Leapfrog sprawl is evident when development, typically residential, moves away from urban
cores, skipping over zones and areas. This type of sprawl is inefficient and leads to landscape
fragmentation. Kelly considers continuous sprawl as a logical corollary to community growth.
Historically the spreading of new growth and development has been viewed as progress.
Communities and their residents have eschewed recognition of the negative effects. Low-density

sprawl is market-driven, expensive and inefficient. Once residential development has moved out,

Chapter 3

77

there is an incentive for infrastructure and commercial development to follow. Roads, sewer,
water, solid waster facilities, schools, shopping and employment will eventually be developed.
This in turn leads to increased taxes, congested roads, environmental and landscape aesthetic
degradation. These are the same conditions that initially influenced the move to the country. The

response is to move further into the countryside; the result is urban sprawl.

Causes of Sprawl

The causes of sprawl are complex. Both individual choices and public policy contribute
to sprawl, independently and in combination. Regarding individual choices, the American
dream of home ownership, an increasing desire for large-lot single-family housing and changes in
household dynamics are causes of sprawl. The American dream of owning a house in the country
is not far from the early 19005 notions of each family having a farm. History has reinforced the
goal of private land/home ownership. Additionally, the perception that suburbs are safer and
more economical has shifted the American dream to the greenfields of rural areas. This is a
short-term assessment, and does not consider the long-term consequences. The desire for large-
lot single-family housing has also added to the issue of sprawl. Suburban and exurban house lots
have continued to increase in size, resulting in a lower density and a greater consumption of land
per person. Another individual choice that has influenced residential development patterns is the
family structure. A major cause of continuous and low-density sprawl is changes in households.
Although Michigan’s population only increased by 0.3% from 1980 to 1990, the number of
households increased by 6.7%. In part this can be attributed to the divorce rate and an increase in

single-parent households as well as recreational second homes.

Regarding public policy, a number of federal, state and local policies and programs have
either encouraged sprawl or discouraged redevelopment. Automobile dependency and

highway/road construction are often cited as a cause of sprawl. Transportation networks and
Chapter 3

 

78

access to modes of transportation are driving variables. The cause and effect relationship is
confused because existing development patterns make automobile ownership necessary.
Highway funding, and now telecommunications firnding, have made distant rural lands accessible
and thus vulnerable. Growth subsidies such as FHA mortgages and the tax structure have
contributed to sprawl. The federal government contributes to sprawl through home financing, the
mortgage-interest deduction, and infrastructure funding. State tax structures and resultant
property-tax systems have a direct effect on what land uses are economically efficient and where.
Constraints to urban maintenance and revitalization contribute to the presence of sprawl. Policies
for contending with contaminated sites have contributed to developers’ lack of interest in locating
in urban areas. Rather than incurring the cost to clean up a site, or revitalize an area, developers

opt to locate on undeveloped land.

Local government land use programs and policies that entice development have enabled
sprawl. Local decisions in infrastructure spending and location have a direct impact on patterns of
development. Many municipalities desire economic development. Rather than working together
to best direct and manage growth for regional prosperity, municipalities compete for industry and
development due to the lack of regional planning or tax-base sharing. The perceived anticipated
tax revenue on potential developable land is a strong incentive to allow sprawl to occur. In
reality, cost—of-services studies have indicated that sprawl costs communities (Scio Township
1996, Burchell 1997). All too often planning goals and zoning are changed to accommodate the
development interests. The temporary nature of zoning plans is supported by ever changing

planning officials and planning boards.

Ultimately individual decisions and behaviors are the cause of sprawl. However, federal,
state and local policies and programs have facilitated sprawl. On the federal level, housing

policy, tax law and highway programs have contributed to sprawl. At the state and local level,
Chapter 3

 

79
subsidies and infrastructure programs have exacerbated sprawl. Historically the governmental

response to sprawl was the infusion of public funds for infrastructure and housing. This only

exacerbated the problem.

Effects of Sprawl

The costs of sprawl are multidimensional; there are environmental, economic and social
costs. Because sprawl is land consumptive, an environmental impact of sprawl is landscape
fragmentation. Because sprawl disperses people and communities away from existing
infrastructure, the costs of servicing these scattered and outlying areas outweighs any tax revenue
created by such developments. The segregation of the urban poor is exacerbated by urban sprawl,

when jobs, commercial opportunities and investment dollars leave for the exurbs.

The effects of sprawl are far reaching. Its effects are felt by everyone in the community
and surrounding communities. Impacts of sprawl on the urban areas and residents includes 1055 of
tax base, abandonment of existing infrastructure, increased demand on existing facilitates to
service exurban developments, decrease in urban jobs, economic segregation and loss of
community character. Impacts of sprawl on the rural and fringe areas include consumption of
agricultural and open lands, deterioration/loss of wetlands, woodlands and associated habitats,
impacts on surface water, increase in air pollution and construction and associated cost of
infrastructure establishment (MUCC 1993 p.98). For residents in the sprawling developments,
the costs of sprawl include higher commuting costs, including time and eventually additional
infrastructure costs. The effects of sprawl on the agricultural community can be devastating,
including 1055 of prime farmland, reduction in number of farms, fragmentation of agricultural

blocks, loss of farm-support businesses and the impennanence syndrome.

Chapter 3

 

so
Growth Management as a Method to Address Sprawl

Although the effects of sprawl are apparent, the national trend has been that government
efforts to control this pattern of low-density growth in rural areas have been limited (Daniels and
Bowers 1997). Traditional methods of land use control, like zoning, have proven inadequate to
manage the rapid growth that occurs in many communities. These methods assume that growth
will occur and tend to regulate only location and intensity of development; they do not explicitly
manage growth. Additionally, these methods tend to be reactionary rather than proactive.
Alternatively, growth management is proactive and is defined as a conscious government
program intended to influence the rate, amount, type, location, and/or quality of firture

development (Mandelker 1990).

Growth management techniques offer an opportunity to address land use issues in an
integrated manner. Growth management focuses on a balance between equally legitimate needs:
protecting natural systems and providing for the population growth and economic development
necessary to ensure a healthy economy (Degrove 1996). It therefore encourages and supports
growth that enhances local quality of life (W arbach and Wyckoff 1995). A growth management
program includes a growth policy, a development plan and a variety of traditional and innovative

land control techniques.

The techniques used by a community depends on its structure of land use decision-
making, the type and intensity of its land use problems and its stewardship perspective. For
example, Oregonian communities are able to capitalize on their statewide land use planning
structure, while Michigan communities rely on local land use planning. Urban communities are
directly faced with decaying infrastructure and out-migration, while nearby rural communities
struggle to save their farmland and agricultural community. Yet other slow growth communities

encourage developers to invest in their area. While some communities have a strong sense of
Chapter 3

 

8 l
stewardship, others make only a limited connection to the land. Depending on the nature of the

community, its land use structure, the type and intensity of its land use problems and its
stewardship perspective a variety of traditional and innovative land control techniques can be

used within its growth management program.

Growth Management Techniques

Zoning

In all states, zoning is the traditional method for controlling the use of land. In part this is
due to legal precedents that legitimize zoning as a valid use of the state’s police power. Zoning is
the division of land in a community into districts or zones and the establishment of regulations for
each district, governing the use, placement, spacing and size of land and buildings (Bassett 1940,
Wyckoff 1997). Zoning as a means of government control of private land use was assured with
the Supreme Court decision in Village of Euclid v. Ambler Realty Company (1926), which held
that the new zoning, in its general aspects, does not violate the fourteenth amendment’s due
process clause (Mandelker 1990). Because of this landmark case, the traditional zoning system is
called Euclidean and divides the community into districts in which land uses are allowed as-of-
right. However, zoning has failed in many communities to lead to organized development. All
too often zoning has been reactionary, with developers receiving variances or rezonings to

develop different types of uses and different intensities of uses than previously allowed.

In addition to Euclidean zoning, there are innovative forms of zoning including
quarter/quarter and sliding scale zoning. Quarter/Quarter permits one non-farm residence per
forty acres and limits it to one to two acres in size. Thus, a farmer with eighty acres would be

permitted two splits for non-farm residences, while a farmer with 320 acres would be allowed

eight. They could be scattered or concentrated but would have to be located on nonprime land if

Chapter 3

 

82

feasible. Sliding scale zoning allows proportionally more splits for non-farm residences on
smaller parcels than large ones because of the increased economic viability of larger parcels with

prime farm soils. However, the maximum parcel size of each split is usually limited to one to two

acres .

Open Space Zoning

Open space zoning is another innovative form of zoning. It permits residential
development while maintaining a strong sense of rural community character and preservation of
environmental resources. While open space zoning may look like a traditional Planned Unit
Development (PUD) the emphasis on open space is different. With PUDs, priority is given to the
clustering of dwelling units around common areas to minimize infrastructure costs; the provision
of open space is a secondary consideration. With open space zoning, the maximum preservation
of open space is the priority consideration. It establishes the protection of open space as the
primary site development objective. With open space zoning a significant portion of the site is
protected as permanent open space through the clustering of dwelling units and/or lots. Clustering
refers to the spatial position or grouping of dwelling units or lots upon a small portion of a site in
order to maximize the quantity and quality of the open space. Permanent open space is land that
is restricted to non-developmental uses and protected from environmental disturbance in

perpetuity through legally binding agreements.

Agricultural Preservation Techniques

Eastern states, which have been experiencing urbanization for the longest time, such as
Maryland, Pennsylvania, New Jersey, and New York have been contending with the loss of
agricultural lands with preservation techniques such as agricultural districting, use-value
assessment and conservation easements including limited easements and easement purchases.
Agricultural districting recognizes the incompatibility of residential and agricultural uses and

Chapter 3

 

83

prohibits non-farm residences in agriculturally zoned areas. It is best suited to areas with large
continuous tracts of prime agricultural land and low development pressure, and in areas primarily
dependent on agriculture for income and jobs (W yckoff 1997). Use-value assessment establishes
the value of a property for tax purposes by reference only to its current or designated use, rather
than to its maximum possible economic use, i.e. its “highest and best use.” A conservation
easement is a legal agreement in which the landowner retains ownership of private property but
conveys certain specifically identified rights to a land conservation organization or public body
(W arbach and Wyckoff 1995). Conservation easements can be used to transfer certain rights and
privileges concerning the use of land or a body of water to a non-profit organization,
governmental body, or other legal entity without transferring title to the land. In Michigan, Public
Act No. 197 of 1980, the Conservation and Historic Preservation Easement Act (M.C.L.A
399.251 ct. Seq.), authorizes the creation of voluntary conservation easements. The interest can
be in the form of a restriction, easement, covenant, or a condition contained in either a deed, will,
or other instrument. A limited term easement is a voluntary and temporary preservation measure

initiated by the landowner and implemented on a property-by-property basis.

Purchase of Development Rights (PDR)

In Purchase of Development Rights (PDR) programs, development rights are purchased
and an easement is placed on the property and defined in a set of deed restrictions. For this
reason PDR programs are also referred to as development easements or conservation easement
programs. PDR is used in eighteen states, including Michigan. Forty-six states have passed
legislation to allow state or local governments to acquire development rights to private property
(Daniels and Bowers 1997 p.145). PDR established the concept of severing development rights

from ownership (Coughlin 1981). PDR involves the severing of development rights from a

Parcel of land through public purchase and the retirement of that development potential.

Chapter 3

84
Advantages to PDR are the ability of the public entity to target areas for preservation and the

preservation of land in perpetuity. A disadvantage is the public cost.

Michigan began its statewide PDR program when changes to the PDR portion of the
Farmland and Open Space Preservation Program, formerly known as PA 116 of 1974, occurred
on June 5, 1996, when Public Act 233 was signed into law. Section 3611B of the Act authorizes
the State to protect valuable farmland from future development by purchasing development
rights. When property is selected, the State pays the owner for that portion of the value of the
property that represents the right to develop that property. After selling the development rights,
the land is restricted to agricultural uses and cannot be developed in the future. The State buys the
right to develop the property to keep the land from being developed and to permanently preserve
it for future agricultural use. The PDR Fund comes from the repayment of tax credits when
Farmland Development Rights Agreements are terminated. As of December 1, 1995, there was

approximately $10 million in the Purchase of Development Rights Fund.

Mitigation
Mitigation techniques have been used to address growth management, for example to

address wetlands preservation. In Michigan the use of mitigation in wetlands protection is

becoming more and more common as a component of applications and permits (DNR 1988 p. 12).

Here, the term mitigation refers to: 1) methods for eliminating or reducing potential damage or
destruction to wetlands; 2) ways to repair or restore unavoidable damage; and 3) creation of
wetlands to offset the loss. The most common procedure is to compensate for wetlands destroyed
by creating wetland habitat onsite or, where necessary, at another nearby location. With wetlands
mitigation banking, wetlands credits for existing or created wetlands are “deposited” in a bank,
and can be used to mitigate a wetlands owner’s loss due to wetlands regulations. Wetlands

credits are a transferable commodity.
Chapter 3

 

85
Urban Growth Boundaries

Urban growth boundaries have been successfully utilized in Oregon, and are currently
being revisited. Also referred to as an “urban service area,” communities adopt a service area or
growth boundary line that determines the geographic limits of growth to be allowed in the
community. This technique recognizes that growth and services need to be coordinated closely.
The use of urban growth boundaries allows a community to limit new development to fixed
growth areas that contain available land and infrastructure needed to support future deve10pment
within a given time horizon (Gottsegen 1992 p.101). Typically, areas outside the UGB are
designated for non-development uses, such as agricultural, forestry or open space. The growth
boundaries are revisited over time and expanded if necessary. As a result, development occurs in
a concentric ring pattern. The limitations of UGB as a growth management technique include
windfalls (to those landowners inside the UGB) and wipeouts (to those outside the UGB); land in
need of protection is not permanently preserved; and a definite level of growth is not defined.
This last limitation may actually be one of the technique’s assets if the setting of growth

boundaries through time is accomplished systematically and appropriately.

Concurrency
Concurrency is a ‘pay as you go’ approach which ensures that public facilities and

services are available concurrent with the impacts of development (W arbach and Wyckoff 1995
p.9). Concurrency is a process or program implemented by local government in order to ensure
there is adequate infrastructure, such as roads, stormwater management, sewers, potable water,
park, solid waste and mass transit facilities to serve new development. The concept of
concurrency requires that public services be in place before development can occur. The states of
Florida and Oregon have adopted this concept to promote orderly development that will not

overburden a community’s infrastmcture system. Local communities throughout the United

Chapter 3

 

 

86
States have adopted ordinances requiring adequate public facilities. For example, Calvert

County, Maryland, does not permit any new development if the school system is at or above

110% of capacity (Bowen 1997).

Cluster Development

Cluster development permits a density shift from one portion of a site to another portion
of the same site in order to preserve open space. The legal basis for this technique stems from the
separation of development rights from the land and rearrangement of those rights in order to
reduce the amount of land consumed by development. There are two types of cluster

development: cluster development as an option using an overlay zone, and limited development.

Cluster development allows a developer to develop one portion of a parcel at a higher
density in exchange for retaining the remainder of the parcel as preserved open space. The total
number of lots permitted usually remains the same, although some communities discount gross
density for the presence of undevelopable lands while others provide density bonuses to
encourage clustering. Cluster development usually involves one parcel and is often provided as
an option under a conventional large-lot zoning scheme. Cluster development has numerous
advantages: it permits efficient and creative land development patterns, preserves valuable natural
or agricultural features or resources; is easy to administer; is familiar to many developers and
land use planners; and is an accepted alternative to landowners because they retain their
property’s full development potential. A disadvantage of cluster development is that it is not an
agricultural preservation technique. While rural character may be maintained, preservation of
farming as a viable industry is undermined because the permitted residential development brings

together incompatible uses.

Chapter 3

87

Limited development protects a particular resource through innovative design
development. It differs from traditional clustering in that fewer lots of higher value are created.
The success of limited development relies on the significant increase in the per-acre value of land
when it is subdivided and then further enhanced by providing a buyer with the security that the
adjoining land will remain unspoiled. An advantage of limited development is that it works well
in areas where maintaining very low residential development is a desired long-term goal and
where the market for high-value rural housing is strong. A disadvantage of limited development
is that while it may protect a particular resource within a legal boundary, it does not remove the

threat from occurring the next day on the adjoining tract (Gottsegen 1992 p. 104).

Limitations of Techniques

While traditional land use control techniques have an effect on community growth and
patterns of development, their predominant impetus is not the management of growth. Given that
existing growth management techniques have proven inadequate for preventing or slowing the
encroachment of urban development on rural lands, additional techniques that recognize an
economic and environmental balance, private property rights, the land market system and
Michigan’s home rule structure need to be investigated. The use of transferable development
rights (TDR), a growth management technique that restricts development in some areas and
transfers that development to other areas through private market transactions may provide the

basis for such a technique.

Transfer of Development Rights as an Option

Economic and Environmental Balance
The implications of sprawl have forced communities to examine growth management

techniques that permit growth while protecting the environment. While economic development

Chapter 3

88

and environmental protection are often viewed as mutually exclusive, TDR programming as a
growth management technique can address both goals (Roddewig and Inghram 1987, Fluharty
1997). Economic development goals include encouraging responsible development in an
appropriate spatial context, maintaining and enhancing agricultural viability, maintaining land
values, and cost-efficient allocation of infrastnrcture. Environmental goals include providing
enough land for aquifer recharge, maintaining and sustaining wildlife habitat and minimizing land
fragmentation. A TDR program is intended to maintain designated areas in undeveloped use

while transferring those development rights to other areas where development is desired.

Private Property Rights

The conflict between public and private interests evolves from an inherent contradiction
in the social needs that land serves and the private rights of ownership and control of land
(Foglesong, 1986). Growing development pressures and the diminishing land resource base have
exacerbated the conflict. TDR provides a means of achieving a community’s comprehensive
long-range goals (public interests) while accommodating development (private) interests (Pizor
1986, Gottsegen 1992). Such programs recognize the value of a community view of property over

an individual view of property.

The conceptual key to TDR is the notion that development rights are just one right in the
bundle of rights that represent land ownership, and that as such can be separated from the bundle
and made transferable to others (Rose 1975, Hagman 1986, Barlowe 1986). Land tenure can then
be described as a “bundle of rights” made up of many heterogeneous, complex, highly flexible
sticks, including claims, privileges, powers, and immunities (Harris 1953, Rose 1975, Hagman
1986, Barlowe 1986). The ownership of land includes a number of rights such as minerals,

timber, water, air and development, which together comprise “title” to or “ownership” of land. A

devel opment right is equal to the unused development potential of a parcel of land, i.e. the
Chapter 3

 

89

difference between the existing use of a parcel and its potential use as permitted by existing law

(Redman/Johnson Associates 1994, Pizor 1986).

An individual entity may hold one right or may hold all rights not reserved by society.
They may hold these rights for varying lengths of time, and they may be attached immediately or
at a time in the future. The landowner’s use of the rights contained in his “bundle” is limited by
many factors, including zoning and land use restrictions, building code provisions, environmental
law and other public policy restrictions (Roddewig 1987). Traditionally, the right to develop has

been regulated through zoning.

“Development depends on the acquisition of two separate components: land and
permission to build a given number and type of units. Because both are usually acquired through
land purchase we do not think of them as separate and different.” (Gans 1975 p. 35) However, if
property is viewed as a bundle of rights, and a development right is just a single stick in that
bundle, flexibility is introduced. By viewing land in terms of rights, land use control can be made
more flexible, allowing landowners, land users and land managers a variety of options. By
creating a development right as a separate right in the bundle, it can be severed from the land and
sold as a commodity. Instead of being destroyed through land use regulation, the severed
development rights are marketed and transferred elsewhere. This is similar to mineral rights,
which can be severed and sold separate from the land fi'om which they originated. With
development rights transfer, a separate market is created for the permission to build (Gans 1975

p. 35). It may be compared to a taking of an easement or right a way over the owner’s property
(Rose 1975). Typically, once the development rights are severed and transferred to another
pr0perty, a restriction is placed on the use of the land that is supportable under the police power.
TDR programming provides a means for buying and selling development rights without buying

and selling the land.
Chapter 3

 

90
Land Market System

In severing development rights from the bundle of rights and by exchange of rights in a
free market system, TDR programming avoids significant public expenditure. While some
techniques seek to protect lands from development through fee-simple land purchase, this may
lead to significant costs to local and state governments where development pressures are most
pervasive (Burchell 1997). TDR programs allow the exchange of separate property rights without
fee-simple acquisition. The value of the development rights is established on a free-market basis
in a willing buyer/willing seller setting. The developer will pay only what is determined to be the
economical benefit to the developer of the additional development (Skjaerlund 1997). TDR
programming offers a market-driven and incentive-based alternative, which in conjunction with
other land use planning techniques may lead Michigan communities to a more economically,

environmentally and socially sustainable future.

Michigan ’5 Home-Rule Structure

Michigan’s 1800 planning entities typically make land use decisions in isolation
(Americana Foundation 1992). Given Michigan’s home-rule structure, combined with the
absence of a state land use plan, local communities are forced to address growth management on
a township basis. However, the influences of sprawl as well as the consequences may cross
multiple jurisdictions. A growth management technique that can be implemented at the local and
regional levels could prove useful in redirecting development patterns and trends. In other states,

TDR programming has been implemented at the township, county and regional levels.

Chapter Summary
This chapter has addressed the importance of land use issues. The historical overview of
land use control presented provided insight into how our land use perspective has developed.

Chapter 3

91
Land use trends and problems, and in particular sprawl, indicate that traditional growth

management techniques have been unsuccessful in controlling unguided low-density
development which is harmful to economic, social and environmental systems. The concept of
transferable development rights (TDR) was introduced as a growth management alternative that
can address the limitations of current growth management techniques. The remaining chapters of

this study focus on TDR as a potential land use technique for achieving sustainable communities.

Chapter 3

Chapter 4

Methodology

Introduction

In this chapter the methodology for this study on transfer of development rights (TDR)
programming will be presented. First an overview of this study will be given, followed by a
description of the landscape as the unit of analysis. Because this study is focused on TDR
programming, a qualitative research approach is utilized. The theoretical literature on TDR is
dominated by studies in the 19705, before the majority of TDR programs were established or
operative. Exploratory or descriptive research on TDR programs is wanting. Qualitative studies
are appropriate when the research is of this type. Furthermore, TDR is a relatively new growth
management policy that could potentially be used by communities interested in land preservation
and guided growth. As a policy it is best studied through a qualitative method stressing context
and setting. The qualitative method chosen is case study, which is appropriate when studying
contemporary phenomena where behaviors cannot be manipulated (Yin 1994). A case-study
approach was chosen over other qualitative methods such as focus groups or surveys because it
allows data to be collected from multiple sources, including documents, in-depth interviews and
archival information. Given the limits of TDR data, a method that pemrits multiple sources of
evidence will be usefirl, particular when trying to bring together supportive evidence to address
validity. A multiple case—study approach is utilized because every community is unique, with its

own set of circumstances and processes. By examining a group of TDR cases and drawing
comparisons, communities interested in the potential use of TDR programming or aspects of TDR

programming can gain valuable information. A discussion of case-study methodology and

92

93

qualitative research is presented including the rationale for selecting this methodological

approach.

The research design is presented in three parts. In this chapter, each of the three study
parts will be addressed, including purpose, research questions, case selection, data collection, data

display and data reduction.

Study Overview

This research study is composed of three parts. The first is an exploratory multiple case
study using documents on TDR theory and programs in the US. The purpose of this part is to
identify important characteristics of TDR programming that indicate program success or failure.
In the second part of this study an explanatory comparative case study using documentation,
interviews and fieldwork from three program cases is undertaken. The purpose of this second
part is to test hypotheses and propositions about the role of TDR characteristics, and develop
them into decision rules for a simulation model. In the third part of the study, a model for TDR
scenario analysis is developed using decision rules based on the study’s second part and data
from a township in Michigan. A simulation model is included in this study as a tool for
understanding the complexity of TDR programs through visual and statistical output. Using the
model, Michigan communities interested in the potential use of a TDR program can study within
their local context the effects of the characteristics, relative relationships between program

characteristics and their overall relationship with program success in landscape sustainability.

Unit of Analysis

The unit of analysis is the landscape, where TDR program success is operationally
defined using three landscape characteristics: number of development right transactions, number
of acres preserved within the landscape, and program cost. By operationally defining program

Chapter 4

94

success in this manner, the question of how existing TDR programs have influenced landscape
sustainability is addressed. The number of transactions indicates the level of activity in the
development rights market and the level of participation. The number of acres under preservation
indicates the level of landscape protection. Program cost is analyzed in order to address the
economic goals of TDR programming. Landscape fragmentation, which addresses economic and

environmental goals, is analyzed in the third part of the study.

Case Study Methodology

A case study is the study of the particularity and complexity of a single case, coming to
understand its activity within important circumstances (Stake 1995 p.xi). While the unit of
analysis in this study is the landscape, the case being studied is the TDR program. Although
there is a body of literature regarding the theory of TDR (Chavooshian et al 1973, Coughlin 1981,
Roddewig and Inghram 1987, Redman/Johnson 1994), the applied literature is limited. This
study is concerned with the question of what characteristics of TDR program can be examined to
indicate success or failure. Subsequent questions are why and how these characteristics influence
the program. These questions are best addressed through a case-study approach, given the limits
of applied literature. A case-study approach is appropriate when examining contemporary
phenomena within a real-life context (Yin 1994). TDR is such a phenomenon and can best be
studied in its real local context. The TDR context is most important to those interested in
understanding TDR programming and its potential applicability. Using a case-study qualitative
approach, this study presents the chronological flow, assesses causality and derives meaningful
explanations about TDR programs. A major strength of case-study data collection is the
opportunity to use multiple sources of formal and informal evidence. This case-study inquiry
relies on multiple sources of evidence, both qualitative and quantitative (Yin 1994). Quantitative
evidence included ratio of development rights to acres in program, economic value of

development rights, acres preserved and number of transfers. Qualitative evidence gathered

Chapter 4

95
included TDR program characteristics and degree of land fragmentation when quantitative data

did not exist. Given the limits of data sets regarding TDR programming, it was critical to be able
to draw upon all sources of evidence. The most important advantage presented by using multiple
sources of evidence is the development of converging lines of inquiry. This is known as
triangulation and will address questions of validity (Yin 1994). By utilizing multiple sources of
evidence and key informants to review draft case-study reports, construct validity was addressed.
Additionally, by engaging in a three part study, a method for confirming the validity of
conclusions and their meanings was included. Conclusions drawn in part one were tested and
verified in part two. Meaningful explanations from part one were used to generate hypotheses
that were tested in part two. In effect, part one advanced the theory of TDR and part two tested
the theories. In turn, the second part of the study generated decision rules that were tested in the

study’s final part.

The basis of qualitative research may be captured in the interrelationships among data
collection, data reduction, data display and conclusion drawing, all of which are fundamental
elements in data analysis (Miles and Huberman 1984). Qualitative data-collection methods used
in this study included observation, interviews, documentation and archival review. By utilizing a
number of data collection techniques validity was addressed. Data reduction involves the
simplification of the raw data. In this study data reduction was achieved through thematic
clustering and a framework (TDR index) presented in part one of the study. Raw data from each
case study was organized similarly within both parts of the study in order to facilitate cross-case
comparisons. Data display involves making the data ready for analysis by organizing it in a
coherent manner. This was accomplished using narratives. Organization of the information is
needed so that conclusions can be drawn. Conclusions must be developed in order to bring

meaning to the data; noting similarities, differences and causal flows gives meaning to the data.

Chapter 4

96

Data analysis was accomplished using an iterative process known as explanation-
building. Using this specific type of pattem-matching, the empirical evidence gathered in step
two was compared with the predicted pattern derived in step one (the hypothesis-generating
process). Pattem-matching and explanation-building provided internal validation. In part one,
case-study data was analyzed to generate hypotheses, such as the characteristics of a TDR
program that indicate success or failure. Here initial propositions about TDR programming were
made. In part two, findings from an initial case-study set were compared with the hypothesis and
propositions. This method permitted revisions to the original statements or propositions if
warranted by the case-study empirical evidence. Because this study was qualitative, flexibility
was built into the methodology. This iterative explanation-building process continued until
comparisons were similar enough to warrant forming decision rules for use in the simulation
model. Further data interpretation was accomplished in the third part of this study, simulation
model development. Using the hypothesis and propositions developed in part one and
corroborated in part two, simulation model decisions rules were defined and programmed in the
IDRISI geographic information system. By using a model to perform scenario analysis inductive

logic was enhanced.

Appropriateness of qualitative research

Given that the focus of this study is on transfer of development rights (TDR)
programming, there are four reasons why a qualitative approach is utilized rather than a
quantitative approach: TDR can only be studied in a real-world context, TDR programming is
context-specific, TDR has seen limited use and a study purpose is to reduce TDR complexity.
Because TDR is a form of public policy, specifically a growth management technique, an
experiment cannot be designed. TDR must be studied within its real local context. Qualitative
data are a source of well-grounded, rich descriptions and explanations of processes occurring in

local contexts (Miles and Huberman 1984 p.15). Qualitative studies are appropriate for research
Chapter 4

 

97
that stresses the importance of context and setting. Gottsegen (1992) noted that because each

TDR program is context-specific, a set of rules for TDR programming cannot be developed.
Every community is difl’erent, with its own set of economic, environmental, social and political
variables and processes. While a quantitative examination of a specific program is plausible, the
knowledge gained would be limited to communities with the same set of characteristics.
Comparatively, by using a multiple case-study approach, lessons learned from multiple cases will
provide more information than any focused quantitative analysis of limited scenarios. Because
the process of transferring rights is relatively new and has been undertaken in a finite number of
communities, quantitative data is limited. Comparatively, qualitative data exists and is abundant.
In part this study was undertaken to reduce the complexity associated with TDR. Complexity
will be reduced through exploration and description of existing programs. The strengths of
qualitative studies should be demonstrated for research that is exploratory or descriptive

(Marshall and Rossman 1989 p.46).

Research Design: A study in Three Parts

Part 1: Exploratory Case Studies

The broad research question was, what characteristics of a TDR program can be used to
indicate program success? This type of question implied an exploratory case study, with the goal
of developing hypotheses and propositions for further inquiry (Yin 1994). The purpose of this
first part of the study was to expand and generalize theories, the outcome of which would be
theoretical propositions about TDR programming to be examined in the study’s second part.
Each proposition directed attention to an aspect of TDR programming to be examined within the
second part of the study. To address construct validity and to avoid the criticism of subjectivity,
in this part of the study, multiple sources of evidence were utilized. Important TDR program

aspects were identified when multiple sources indicated the same finding. To address external

Chapter 4

98

validity, replication logic in multiple case studies was used. Multiple cases were used to predict
similar results, i.e. replication logic (Yin 1994). For example, it was predicted that TDR

characteristics would be the same at all levels of programming.

Research Questions

Because the approach of this study is qualitative, the research questions vary from
traditional quantitative research questions. In quantitative research the questions are hypothesis-
driven while qualitative research uses the questioning process to seek and identify hypotheses and
propositions. Qualitative research thus integrates the questioning process with the development
of hypotheses and proposition development. Good research questions in a case study direct
attention and thinking, enough but not too much (Stake 1995). Too much direction could lead the
research down an erroneous path. Flexibility is an important element to qualitative research. In
this part of the study, the generated hypotheses and propositions directed attention to aspects of
the TDR programming that were examined within the second part of the study. One question
addressed in this study part asked, which characteristics of a TDR program can be used as
indicators of program success? By asking this research question, a hypothesis was generated, for
example that sense of place is a key characteristic in TDR programming. Qualitative research

questions are asked to generate theories.

Research questions addressed in this initial section of the study were:

0 What characteristics of a TDR program can be used as indicators of program success
or failure?
0 What is the role of sense of place in TDR programming?
0 What is the role of zoning in TDR programming? 15 down zoning necessary to
create a demand for development rights?
0 Do the characteristics change if the management plan is implemented at differing
scales, such as township, county or region?
0 What is the relative importance of each characteristic, and does this change with level
of implementation?
0 Potential proposition: Relative importance of characteristics will remain the same
across program levels.

Chapter 4

99

Case Selection

In order to maximize what can be learned about TDR programming, four cases were
identified for part one of the study: Buckingham Township, PA; Calvert, County, MD;
Chesterfield Township, NJ; and Thurston County, WA.1 By including these cases, balance
between levels of implementation was achieved while offering an opportunity to capture variation
between programs (Stake 1995). The variation included program scale, age of program and
program goals. Two programs were at the county level and two were at the township level.
Program initiation dates were 1975, 1977, 1975 (revised in 1997) and 1996 respectively.
Program goals were agricultural land preservation, growth management and affordable housing.
These TDR programs are well documented and program administrators were accessible for
verification of exploratory case study conclusions. By examining these cases and theoretical
TDR literature, understanding was achieved, assertions were made, and hypothesis and

propositions were defined.

Data Collection

Three sources of evidence were used in this exploratory case study: documents, archival
records and physical artifacts. The dominant source of evidence was documentation. Both
formal and informal documents were used, including theoretical literature on TDR programming,
TDR reports, program newsletters, newspaper articles, growth management guidebooks and
landscape management reports and articles. Grey literature, such as reports and updates prepared
by planning departments, was particularly useful. Investigative reports produced by

municipalities considering TDR programming were also useful. Land use practitioners and

*

’ While a number of additional cases have been examined in the course of the exploratory case study, they
have not been formally included These include: Collier Co., FL; Lexington-Fayette, KY; New York City,
NY; San Francisco, CA; West Bradford Township, PA; East Nantrneal Township, PA; Towns of South
Hampton, NY; Hillsborough Township, NJ; Harford County, MD; and San Mateo County, CA.

Chapter 4

100
consultants produced these reports. Archival records were used to gather land use maps and

quantitative data on deed restrictions and easement records.

Data Display

Each exploratory case study was organized similarly so that conclusion-drawing could be
facilitated. Each contained the following sections: setting, planning history, program description
and staus. The setting section contained demographic and geographic information. The
plannirng history section outlined the program area’s planning history with a focus on efforts and
Program5 implemented for the same purposes as the TDR program. The program description
included a program initiation date, information on sending and receiving areas, the TDR
allocation method and the transfer procedure. This section also contained a historical description
0f the TDR program if applicable. The status section summarized the overall status of the
pr ograln’ including number of acres preserved, the number of transfers and costs. By organizing

the data in this manner it was made ready for analysis. A narrative text form was used, with

tables where appropriate.

Data Reduction
Data reduction is the process of selecting, focusing, simplifying, abstracting and

tram-ls forming the “raw” data. The exploratory case studies were summarized using thematic

dustering. Here patterns, similarities and differences between exploratory case studies were
investigated. Exploratory case-study findings were presented under six major thematic headings:
ha""l<ground, participants, sending side, receiving side, TDR allocation and general. The
lmaclfiground theme encompassed broad program issues such as resource perception, policy
context, development market and regulatory atmosphere. The participants theme included critical
Stakel'lolders in TDR programming. The sending-side theme included all aspects related to
Sendi ng area parcels and the transfer of rights from those parcels. The receiving-side theme
incl‘lCled all aspects related to receiving parcels and what aspects were associated with viable

Chapter 4

101
receiving sites. The TDR-allocation theme dealt with all program aspects associated with the

allocation of rights. The general theme entailed all other aspects discovered through replication

logic that could not be categorized under the previous themes.

TDR In dex Development

Because one of the major criticisms of TDR programming is its complexity, a TDR index
was developed. In effect this was a second form of data analysis. In this case, the exploratory
data reduced to thematic clusters was aggregated further, yielding thirteen TDR characteristics.
By interpreting the exploratory data using a simple index, TDR complexity is reduced. Ofien
Poncyetnakers have disregarded the TDR concept because of its complexity. By presenting

important characteristics in a simplified form, i.e. the index, policy makers may at least be willing

to investigate the TDR concept.

A hypothesis generated out of the exploratory case study was that these thirteen TDR
Characteristics could be used to indicate TDR program success or failure. Communities interested
in TDR program can gain insight into which characteristics were important to the cases explored

and decide if they would be applicable in their local context. If it is determined that the
Cha-"E1cteristics are indeed indicators of program success or failure, communities could examine
the cliaracteristics in their local context, deciding which have priority and therefore which will be
ano<=ated energy, time and resources. The TDR index indicated what program characteristics had
a higher likelihood of influencing program success or failure. This allowed the second part of the
study to be more focused, concentrating research attention and resources on the thirteen
Charatcteristics. To determine whether the characteristics could be used as indicators of program
success, they were applied to the explanatory case study in the second part of the study. The
TDR index was used as a mechanism for verifying exploratory case-study conclusions. It was

‘1 -
Seq In the explanatory case study to confirm the validity of the meanings presented in the

Chapter 4

102

exploratory case-study section. The index was used as the focusing mechanism in the study’s

second part.

Part 2: Explanatory Multiple Comparative Case Study

The subsequent explanatory questions addressed in the second part of the study were,
how and why these characteristics influence the success of TDR programming? Because this
type of question implied an explanatory case study, the propositions (generated in the study’s first
part using an exploratory case study) were investigated. In this second part of the study, a
multiple comparative case study was undertaken with a goal of building a general explanation
that fits each of three individual cases, each representing a different landscape scale. A
characteristic identified in the exploratory case study part was that municipal or county
commitment is critical. In this second part of the study, the question of why commitment is
critical was addressed. By examining all three explanatory cases and determining what role the
municipality, county or regional agency played in the TDR program, the importance of
commitment was supported and validated. Furthermore, by focusing on the question of
commitment in interviews, further data on this characteristic was collected and the interview was
made more productive. Through the multiple comparative explanatory case study, greater detail
on commitment was derived. This will provide communities interested in TDR programming
with greater information on what level of commitment existed and how this affected the success
or failure of the TDR program. Additionally, communities can learn the costs of the commitment
relative to the benefits. By addressing the findings of the exploratory case study in this way,

communities can evaluate if TDR programming is appropriate and, if so, what aspects of TDR

programming have priority.

Because a research design should represent a logical set of statements, the quality of the

research design can be assessed using external validity, construct validity and internal validity

Chapter 4

103
(Yin 1994 p. 32). Multiple case-study use provided external validity to this study. If the case-

study evidence in all three explanatory cases supports a finding from study part one, validity is
achieved. Alternatively, if the evidence only supports a finding in one of the three explanatory
case studies, the finding is deemed less valid. Because it is recognized that each TDR program is
unique to its context, validating results or findings from one case study to the next is important.
This lends credibility to the finding. Policy makers should not simply focus on those findings
that are validated across the three explanatory cases. Findings supported by a single case may
provide an investigative starting point. By utilizing a comparative case study, questions regarding
similarities or differences between programs at various levels were addressed. The differences

across case studies are as important as the similarities.

To address construct validity in this pan of the study, multiple sources of evidence were
utilized and key informants reviewed draft case-study reports. Construct validity involved
establishing the correct operational measures for the TDR concepts being studied (Yin 1994).
Construct validity is important to address the criticism that qualitative research is subjective.

The TDR characteristics studied in this second part were determined through data reduction in the
first part. Through data reduction the specific characteristics to be examined in this explanatory
case study were identified. To validate that these characteristics were appropriate, the
interviewees were asked prior to the interview if they concurred on the list of key characteristics.
They were asked if they would delete or add any additional characteristics. Furthermore, multiple
sources of evidence were used to provide supporting evidence. For example, the characteristic
that addressed the preservation resource value was reduced out of the data in the exploratory case
study. Key informants, experts in the field of TDR programming, confirmed that this was indeed
a key characteristic. Additionally, documentation including journal articles, newspaper articles

and planning reports supported the importance of this characteristic.

Chapter 4

104
To address internal validity, data analysis involved pattem-matching, a form of

explanation-building. Internal validity is concerned with whether study inferences are correct

(Yin 1994). Using pattem-matching logic, the predicted pattern, the TDR index, is compared
with the empirically based pattern discovered through the explanatory case studies. The findings
in part two of the study were compared with the hypotheses and propositions developed in part
one. Because this study was qualitative, flexibility was built into the methodology. There was an
opportunity to alter the pattern if warranted. This iterative explanation-building process

continued until comparisons were similar enough to warrant forming decision rules for use in the

third study part, the simulation model.

Recognizing that no two TDR programs are exactly alike, a multiple comparative case-

Study approach was most appropriate. Multiple case studies provide a more robust and varied
data set. Because every community is unique, a multiple case-study approach was utilized. Each
TDR program is structured upon local land use patterns, individual community goals and the
nature of the participants involved (Gottsegen 1992). By examining a group of TDR cases and
draan comparisons, communities interested in the potential use of TDR programming or
aSll>ects of TDR programming will gain more knowledge than if a single case was examined. By
analyzing the events of each of these three case studies, a general explanation was supported by
mu ltiple sources of evidence. Using both multiple sources of evidence and multiple cases
triangulation was achieved. The most important advantage presented by using multiple sources
of evidence is the development of converging lines of inquiry, a process of triangulation (Yin
1994 p. 92). By using multiple cases, the findings in this explanatory case study were more

cotl‘ipelling. The explanations supported across the multiple cases were then used in the third part

of the study for decision rules in a simulation model.

Chapter 4

105

Research Questions

Research questions addressed in this second part of the study were:

0 How do these characteristics influence the success of TDR programming?

0 Potential proposition: Sense of place contributes to a feeling of stewardship or
ownership that moves people to take action and participate in the program.

0 Potential proposition: There will be an increase in number of development right
transactions when there is a strong sense of place.

0 Potential proposition: By allowing transfer of rights in a market system, citizens’
perception of land ownership and property rights is maintained.

Why are certain characteristics more relevant than others in TDR programming?

What influence does degree of development pressure have on TDR market strength?

0 Potential proposition: When development pressures are high, the market for

development rights is strongest, making TDR programming an effective growth
management tool.

0 How have existing TDR programs influenced landscape sustainability, specifically
land values and land fragmentation?

0 Potential proposition: Effective TDR programming maintains the program area’s
overall land values.

0 Potential proposition: Effective TDR programming minimizes the degree of
fragmentation in the landscape.

0 Why do the characteristics or the relevancy of characteristics change if the
management plan is implemented at differing scales?

0 Potential proposition: Characteristics of TDR programming will remain constant
across different program levels.

a What are the obstacles of a home-rule structure in TDR programming and how
can these obstacles be overcome?

Ca se Selection
For the comparative multiple case study, three case-study TDR programs were examined:
l"'Ié'lnheim Township, PA, to represent TDR programming at the township level; Montgomery
County, MD at the county level; and the New Jersey Pinelands at a regional level. Propositions
regarding comparisons were tested, for example, that characteristics will remain constant across
difl‘rering levels of programming. These programs were selected for a number of reasons. Because
land use is undertaken at the local level in Michigan, a Township case study was selected.
IWanheim Township is located in Lancaster County, Pennsylvania, and represents a township with

Valuable agricultural and open space lands under development pressure. A number of Michigan

Chapter 4

106

counties, including Kent, Ottawa and Washtenaw, are considering TDR programming at the
county level; for this reason the Montgomery County case study was included (Koches 1997,
Vander Veen 1996, Brinkman 1997). Michigan’s lack of acceptance of TDR programming is
partly based on the assumption that such programming is inappropriate for a home rule state. The
New Jersey Pinelands was selected because New Jersey is in practice a home-rule state.
Additionally, there are numerous parallels between the New Jersey Pinelands program’s goals
and Michigan’s land use goals. The Pinelands perceived a need to protect not only their
agricultural resources including a fruit industry, but also their natural resource base that supports
their recreation and agricultural tourism industry. Another objective of the Pinelands program
was to preserve the water resources of the area. Michigan’s water resources are valuable to the

state and in need of protection from development pressures. Finally, the Pinelands recognized the

need to balance environmental interests with economic growth.

Two informants have been identified: Thomas Daniels, Director of Lancaster County
Agricultural Preservation Board, and Deborah Bowers, editor of Farmland Preservation Report
(Stake 1995), both of whom are experts in the field of TDR programming and agricultural
Preservation and are well acquainted with these programs. Additional experts were the program

administrators who were available for interview sessions and to review case study draft reports.

lData Collection

Five sources of evidence were used in this explanatory case study: documents, archival
records, interviews, direct observation and physical artifacts. The dominant sources of evidence
were documentation, interviews and direct observations of the program landscape.
Documentation included journal articles, master plans, planning reports, newspaper articles,
Sterms reports, public relations and outreach materials. Based on hypotheses and propositions

generated in part one, focused interviews were conducted in part two with the purpose of

Chapter 4

107
corroborating certain facts established in part one, such as the list of TDR program

characteristics. Additionally, interviews provided multiple realities (Stake 1995). By including
multiple viewpoints, understanding of TDR programming was optimized. However, given the
limits of the documentation evidence base, open-ended interviews with local program experts
were conducted in addition to focused interviews. These open-ended interviews were based on a
list of issue-oriented questions developed in the first part of this study (Stake 1995). (See
Appendix A) Interviews were conducted in August 1997 at each case-study location and lasted
between 1.5 hours and four hours. Interviewees were program administers, namely Jeffrey L.
Butler, Director of Planning, Manheim Township; John Ross, Executive Director of Pinelands
Development Credit Bank; John Stokes, Associate Director, Pinelands Commission; Jeremy
C riss, Agricultural Services Division Manager, Department of Economic Development; and
Denis Canavan, Coordinator, Development Review Division, Planning Department, Montgomery
County. The two informants identified in part one of this study, functioned as experts and
Suggested additional sources of corroborative evidence. Direct observation, in the form of field
Vis its was used to perform a visual assessment of fragmentation and to visually corroborate land
uSe data. Field visits were conducted following the interviews. Depending on program area size,

the field visits lasted three hours (Manheim Township), six hours (Montgomery County) and ten
hours (NJ Pinelands).

Data Display
Each explanatory case study was organized similarly. For each case a narrative text form
was utilized, with tables where appropriate. Each narrative contained the following sections:
pregram area description, planning history, regulatory authority, program initiation, sending area,
l’eceiving area, transfer procedure, TDR in policy suite, TDR bank, status, program future
Considerations and success. The program-area description section contained demographic,

geographic and natural resource information. The planning-history section outlined the program

Chapter 4

 

108

area’s planning history with a focus on efforts and programs implemented for the same purposes
as the TDR program. The regulatory authority section contained information on legislation
associated with the TDR program. The program initiation section described the initiation date
and surrounding circumstances. The sending area and receiving area sections contained
information on the identification of the respective areas and area descriptions. The transfer
procedure section detailed the development right transfer process. The policy suite included
descriptions of associated or complementary policies. The TDR bank section discussed the role
of a public bank or quasi-public bank. The status section summarized the overall status of the
program, including number of acres preserved, the number of transfers and costs. In the future
considerations section, potential program changes and considerations were outlined. In the

success section, aspects of the TDR program that directly contribute to program success were

described.

Data Reduction

In this second part of the study, the TDR index was used to simplify and transform the
data into meaningful information. Each explanatory case included an examination of the TDR
index and how it applied to the case. The explanatory case-study data was thus simplified under
the TDR index framework. By reducing the data fi'om the four exploratory case studies under key
Program elements (the TDR index) and using the Index to structure explanatory case-study data,
the program element’s importance was further supported In effect, five lines of evidence
c0nverge on a single TDR program characteristic. By organizing the data under the thirteen TDR
I”‘0gram characteristics, conclusions on how they influenced the success or failure of the case-
Stlldy program could be drawn. For example, the presence of a public bank was identified
through the exploratory study as an important TDR program characteristic. During the
explanatory case study, data related to a public bank was organized under this index element.

hie data gathered in the New Jersey Pinelands case study confirmed the importance of a public

Chapter 4

————_- _

109
bank and provided firrther evidence regarding the functions of the bank, including transaction

facilitator and buyer of last resort. This information was then used in the third and final part of

the study to develop model decision rules.

Part 3: TDR Simulation Modeling
The final part of this three-part study was simulation modeling. In developing a

simulation model, this study will assist local communities in analyzing TDR programming. The
simulation model was developed as a conceptual model, a tool for users to better understand the
role of TDR program elements and their relationship. The model is programmed in IDRISI, a
Windows-based geographic information system (GIS). This GIS is user friendly and does not
require prior programming knowledge or extensive GIS experience. For these reasons, combined

with the system’s affordability, IDRISI is an easily accessible and understandable software

package for developing the TDR simulation model.

Spatially explicit models can prove usefiil for the examination of the environmental,
social, and economic systems that interact and influence land use change. Such models require
information on location and configuration at each landscape unit of concern (Baker, 1989).
Spatial models offer an advantage in allowing researchers to address questions at large scales
without having to conduct landscape level experiments (Baker, 1989) and to study potential

effects associated with proposed policy options through scenario analysis (Bingham et al, 1995).
Furthermore, because TDR has not been used in Michigan’, the TDR simulation model will allow
Michigan communities to address TDR questions. The model is not intended to be predictive,
l‘ather to be used as a conceptual model and a tool for local communities to better understand the
l”Ole of TDR concepts and TDR programming within their local context. Communities can

eXamine TDR characteristics and how they affect landscape management given their political,

2\
Currently, Peninsula Township is designing a TDR program.
Chapter 4

llO

environmental, economic and social setting. Understanding the relative importance of
characteristics will permit communities to focus their efforts, thereby allowing them to efficiently
utilize their limited human and financial resources. Municipalities may not have the resources to
thoroughly investigate TDR program elements nor design all elements. For example, in
Washtenaw County, an eighteen month effort at investigating agricultural preservation techniques
disregarded TDR and ostensibly addressed other techniques due to limited resources and time.
Given the lack of time to investigate alternatives it was deemed too complex and undeserving of
consideration. The model can assist communities with limited time and resources in analyzing
TDR potential. Model output included statistical and graphic representations of the resultant
landscape. Additionally, the model illustrated the spatial and temporal effects of a TDR program.
In providing visual output, the complexity of TDR programming was diminished. In developing

a model for Alpine Township, TDR theory was integrated with the local planning practice.

Research Questions
The questions addressed in this third and final study section include:

0 Using a simulation model in Alpine Township, how do TDR program characteristics
affect TDR allocation and distribution?

0 By altering decision rules and changing the relative strength of program
characteristics, can the model be used by Alpine Township to identify where limited
resources should be focused?

Alpine Township Study Area

The model was developed for the Alpine Charter Township, Kent County, Michigan.

Because this Township is located northwest of Grand Rapids, it is experiencing residential

development pressures. TDR programming is most appropriate in situations where the

development pressure is high, and therefore the potential for a market for development rights is I

greatest (T ustian 1983, Norris 1997). Furthermore, land use decision-makers in Alpine Township

recognize the threat this development pressure places on their agricultural and natural resource

Chapter 4

111
base. The Township is 83% agriculture and open space, with a 1990 population of 9,863. Its

projected population for the year 2000 is 12,861, and for 2010 is 16,770 (Koches and Toering
1996). The dense population of single-family homes and apartments is primarily in the
southeastern comer of the Township with urban development stretching north along M-37.
Alpine Township is a member of the Grand Valley Metropolitan Council and the North Kent
Township Association, two groups which are working toward sound land use planning. While
Alpine Township has strong zoning, the threat of development emanating from neighboring
Plainfield Township and Grand Rapids puts the Township’s agricultural land, including its
valuable orchards, at risk. Recognizing the rate of agricultural land loss in Kent County, the
Township initiated agricultural preservation zoning. Currently, the Township is updating its
master plan and is considering new techniques for agricultural preservation. One potential

technique is TDR.

Data Collection

Data used in this part of the study included geographic information and census data. Data
was provided by the Grand Valley State University Water Resources Institute. Supplemental data
(MIRIS) was provided by the Center for Remote Sensing and Geographic Sciences at Michigan
State University. Digital data sets included: residential and county roads, highways, rivers,

streams, lakes, forests, slopes, soils, 1996 land use, zoning, sewer and water. Additionally,
Alpine Township provided a copy of its Future Land Use Map (1998). Data was provided in
IDRISI format, ArcView format or C-Map format. Landsat TM data was provided by the
Institute of Water Research at Michigan State University. This remotely sensed data in

cOmbination with aerial photographs was used to verify the land use data.

Data Analysis
Using the IDRISI geographic information system (GIS) the data was analyzed. IDRISI is

a TaSter based GIS that permits input of vector data sets. IDRISI was selected because of its

Chapter 4

112
analytic capabilities, in particular its multiple criteria-analysis routines. These routines were

needed to identify what areas of the Township were most likely to be developed to meet future
populations. This information was needed to identify viable receiving areas. The data was used
in multi-criteria evaluation to develop a Desirability Index (indicating desirable residential areas)
and a Profitability Index (indicating desirable residential development sites). Residential
development was a driving variable in the simulation model because residential land use is a
driving variable for land use change (Landis 1995). Additionally, the majority of TDR programs
examined permit the transfer of development rights for residential use only. While TDR
Programs that permit the transfer of rights into other land uses exist, they have seen limited
transfer beyond those to residential areas. The Desirability and Profitability indices were
Combined to determine what areas of the Township were most likely to be developed for
1' esidential use from both a buyer’s and developer’s perspective. Constraints were integrated so
that land in public ownership, under water cover, or in higher use than residential, e.g. industrial,
roads or commercial, were eliminated from further consideration. Census data was then used to

deterrni ne how many cells would need to be developed for the projected 2010 population and the

2020 population. These cells were used to identify potential receiving areas.

Using soils and zoning data, four sending-area options were modeled to determine the

number of acres in the sending area. Sending-area Option 1 included only prime farmland zoned

agriculture in the sending area. Sending-area option 2 included prime, and prime if drained,

farmland zoned in agriculture in the sending area. Sending-area option 3 included prime

farmland in orchard use as the sending area. And Option 4 included prime farmland or orchards
Orchards were included in Options 3 and 4 because of the importance of the orchard industry in
Alpine Township and in northern Kent County. The Township overlaps with an area known as
the “

for beth sending and receiving areas were analyzed to determine acceptable balances of TDRs,
Chapter 4

Ridge,” which accounts for forty percent of the apples produced in the state. The acreages

1 l3
i.e- the number of TDRs opportunities in the identified receiving areas and the number of TDRs

for allocation in the sending area.

Data Summary

The model data was summarized in two ways, through graphic interpretations and
through tabular data. By providing graphic representations of the receiving-area and sending-area
Options, TDR concepts are made tangible. Written and tabular information provide descriptions

of the graphic representations. For example, an image of Sending-Area Option 3, illustrates the
distribution of sending areas that are prime farmland in orchard use. Tables and written
descriptions make comparisons between this sending-area option and other options. The model
findings expound on this summarized data, offering insights into the implications of the
s“mutant-ized data, for example that Sending-Area Option 3 may be more acceptable because it

increased the development potential of the land through the allocation of TDRs at higher rates

than Present zoning.

Cha Dter Summary

To best understand transfer of development rights policy, it must be studied in its real-
WOfld Context. A case-study approach allows the TDR concept to be studied in its context.
Additi Onally, TDR as a land preservation technique is a relatively new phenomenon. The
majority of programs were initiated since the late 19705. While a number of communities in
Mid“ gen have been struggling with growth management and the preservation of open space and
agricultural lands, only Peninsula Township has initiated a TDR program. For these reasons, this
study is composed of three parts, two that utilize a qualitative multiple case-study approach
drawi hg upon existing TDR programs and one that allows TDR to be studied in a Michigan
context. The first study part used four case studies to generate hypotheses and propositions. Here

Characteristics important to TDR programming are identified. An understanding of these

Chapter 4

114
characteristics and their importance is helpful beyond TDR programming. For instance, sense of

place was identified as a TDR program characteristic. An understanding of sense of place, how it
is expressed and how it is achieved would be of assistance to any land use policy. The second
study part tested these hypotheses and developed decision rules to be used in the study’s final
part, the simulation model. A closer examination of the characteristics was undertaken. In effect
the characteristics provided focal points for the explanatory case investigation. Because the TDR
technique is perceived as complex and because TDR has not been utilized in Michigan, a
simu lation model was developed to help landscape managers understand TDR concepts, TDR
Fragrant characteristics, and the relationship between characteristics. For example, what is the
relationship between sending and receiving TDR Opportunities, and what does this relationship
mean when development rights are actually allocated? With this knowledge in hand, local

decision-makers can decide if TDR programming is appropriate for their community or if aspects

of TDR programming are appropriate.

Chapter 4

Chapter 5

Transfer of Development Rights

Introduction
This chapter will introduce the concept of transferable development rights (TDR) and

TDR programming. As a preservation and growth management technique it is related to familiar
growth management techniques. A discussion on similarities and differences will be presented.
The main components of a TDR program will be discussed, namely sending area, receiving area,
allocati on method and transfer procedure. The roles of a TDR bank will also be examined. A
discussion on mandatory and voluntary programs and what characterizes each is also presented.

This chapter concludes with an overview of TDR history, both theoretic and program

develoD merit.

Tran sfer of Development Rights Program Definition
TDR programs involve the option to sell in a free market development rights, the unused
devel OD ment potential of a parcel of land, to compensate or mitigate the cost of land use
1'in ons. Typically, this development potential is referred to as a “right” in mandatory
programs and as a “credit” in voluntary programs. These rights or credits can be severed from the

property and marketed separately from the land. The program offers incentives to some

landov"Iners to sell TDRs and offers additional incentives to other landowners to purchase TDRs.
Typical ly, rights are sold by landowners in areas where onsite development is limited and

purchased by developers who want to build at bonus uses or densities on other parcels that are

115

116
more appropriate for development. The TDR buyer gains ‘bonus’ density, the seller gains capital

through the sale of TDRs, the community benefits from managed growth and resource

preservation, whether it be agricultural lands, open space, historic sites or environmentally

sens itive lands.
Basic Concept
Basic elements of a TDR program include: a sending area, the area to be preserved; a
receiving area, the area to be developed; development rights and a process by which rights are
transferred. In the sending area, also referred to as the granting area, landowners are limited in
their onsite development opportunities but are assigned development rights. They may sell their
development rights to landowners or developers in the receiving area, where the transferred
development potential can be realized. When the rights are transferred, the land in the sending
area is restricted with a permanent conservation easement. In the receiving area, the acquired
rights u sually permit development of a particular type and density that would not normally be

permitt ed. The transferred development potential usually translates into additional dwelling units,

parking Spaces or increased floor-area ratio (FAR).

Adva ntages and Disadvantages
Adetages frequently sited for TDR (Bateman 1975 and Siemon et al. 1996):

l‘eduction of arbitrary and inequitable “windfall” and “wipeouts” that frequently accompany

O
governmental use of the police power to regulate land use. The concept was first developed
as a means of avoiding the usually harsh results of downzoning - wipeouts - and the usually

neficial results of upzoning — ‘windfall’ (Siemon, et al 1996).

TDRS balance the advantages and disadvantages of a public-policy decision in regard to
pIva-lining and land development (Siemon et al. 1996 p.4).
. IVIOre effective long-term preservation of environmentally sensitive areas, open space and

agricultural lands. The associated deed restrictions are in perpetuity.

. Unification of plans and programs for development and environmental protection.

Chapter 5

117

o A shifi of a larger share of the total social cost of new development to the developer and
ultimate consumer.

o Preservation landowners retain the underlying property for uses other than onsite
development.

0 TDR is market-driven, utilizing private funding rather than public funds.
0 Recoupment of a portion of private gains created by public investment.

o The program can be designed to be strictly voluntary, making it more palatable to residents.
Disadvantages frequently sited for TDR:

' Rated among the most challenging preservation techniques to design and implement (Bowers
1 995).

TDR programming is complex and has seen limited use. TDR programs are complicated and
reg uire an investment of time and staff resources to implement, monitor and maintain.

RSquires planning commitment; ability to achieve zoning variances and changes would doom
R program to failure.

Re Quires political commitment, municipal leadership and extensive public education.

Rfitluires developer, builder and realtor support. These groups have traditionally been
oPIDOSed to further regulation of land use and development.

Preservation is dependent on the development market. If the real estate market is depressed
e demand for TDRs will be low and therefore few properties will be protected.

Rela tionship Between TDR and Familiar Growth Management Techniques
While TDR is perceived by many as an innovative and complicated concept, TDR uses
existing planning techniques to achieve very traditional land use patterns and familiar
landscapes — compact efficient development surrounded by broad areas of undeveloped
land (Gottsegen 1992 p.9).

Two major criticisms of TDR are that it is complex and has seen limited use. However,

TDR programming borrows from accepted growth management techniques such as zoning,

pmchase of development rights (PDR), mitigation and cluster development. By framing the TDR

Chapter 5

118
concept using these familiar techniques the complexity associated with TDR programming can be

diminished.

TDR programming includes preservation (sending areas) and development (receiving
areas) districts, and thus borrows from the well-known zoning concept. TDR programming may
be tied to increasing density by requiring the use of TDRs to build at higher densities, rather than

sixnply permitting upzoning and zoning variances. In this way some of the development potential
wi 11 be captured for the preservation of other lands. Through this shifting of development the
public can capture some of the windfall profits that accrue to those who now succeed in getting
use variances or zoning changes (Moore 1975, Willis 1975, Siemon et al 1996). TDR may be
viewed as a type of zoning, one that provides rights as a compensation mechanism to balance the
windt‘znll in land value that accrues to landowners in the designated growth areas against the
corresponding financial wipeout in value experienced by landowners in the preservation areas

(Gotts egen 1992).

TDR expands the purchase of development rights (PDR) concept. Once the development
rights are severed from one parcel, rather than being retired, they can be sold or transferred to
”Other parcel where the development potential can be realized. A major difference between TDR
and PDR is that while the latter relies on public purchases of conservation easements, TDR
P r ogra-l'nming relies on the private market sales of development rights between preservation
landOWners and developers. Market forces then determine which parcels in the preservation area
will be protected under easement, whereas with PDR the administrative body determines which
parcels will be protected. Another major difference is that with PDR, development rights never
have tl‘heir development potential realized, whereas with TDR the utilization of the development

potential is critical to program success.

Chapter 5

1 19
In efl‘ect, TDRs are a mitigation program designed to preserve agricultural land, open

space, historic buildings and districts, environmentally sensitive lands or other land that is less
suitable for development, while still allowing its owners to recover some financial benefit from
their unfulfilled development expectations (Siemon, et al. 1996 p.3). Like wetlands credits,
TDRs mitigate a landowners unfulfilled development expectations. A TDR is the element that
mitigates the impact of preservation zoning in the sending area (Gottsegen 1992 p.10). Taking a
difl‘erent viewpoint, TDRs may be perceived as a mitigation effort in that developers are
pem‘litted to develop at higher densities if they, in effect, mitigate through the preservation of
other areas. The preservation is achieved through the transfer of development rights from the
pres ervation area to the development area. This is similar to wetlands banking, where developers

are allowed to develop wetland areas if they mitigate those effects elsewhere through purchase of

wetlands credits for the wetlands bank.

While cluster development permits a density shifi from one portion of a site to another
portion of the same site, TDR permits a density shift from one portion of a site to another, non-
contiguous site. TDR is a system designed to permit the orderly reallocation of density within a
given community in a manner that meets legitimate planning objectives and without placing

unfair burdens on the property owner (Redman/Johnson 1994 p. 3). From this standpoint it is a

form Of cluster development. With cluster development the overall density of the site remains the

Sam: - With TDR, the overall density remains the same in the program area.

Main Components

3°" ding Area

The sending area represents the area that the program is designed to preserve and

CO ‘ . . . .
“tau-ls the resources in need of protection. The threatened resource may include prime and

Chapter 5

120
unique farmland, forested areas, historic sites, steep slopes, wetlands, aquifers, coastal areas and

scenic landscapes. Because this threatened resource provides the impetus for TDR programming,
the identification of the sending area is typically one of the easier steps in program
irnplementation. The sending area is where development potential is transferred or ‘sent’ out.
These areas are also referred to as granting districts; while only very low densities are permitted
in the area, a surplus of TDRs is allocated, and thus the area grants TDRs. The incentive for
sending-area landowners to sell TDRs is monetary. They can receive capital without having to
sel 1 land or allow access. These landowners are able to continue with permitted uses, typically
lim i ted to a non-development use such as agriculture, open space or passive recreation. Permitted
densities within sending areas must be low compared to the number of TDRs allocated to

strengthen the incentive to sell TDRs. By creating a surplus of rights, a market for TDRs can be

suppli ed.

The sending area development potential is utilized by the transference of TDRs. Once
transferred, the land is permanently protected from development through deed restrictions. A
deed restriction, or deed easement, is placed on the landowner’s deed to the property. The deed

feStriction limits the use of the parcel of land to specified uses, usually‘in perpetuity.

Receiving Area

The receiving area represents the area where development is encouraged. The TDR
recei\'ing area accommodates or receives development potential from the preservation area, i.e.
the sGuiding area. The receiving area contains the amenities and resources needed for
development. Several incentives are offered to receiving area landowners to encourage them to
purchase and use TDRs; most often the incentive is increased density. Other incentives involve

inc - - - '
l“Slon in infrastructure programs and use vanances.

Chapter 5

 

121

Most often Receiving Areas are in high density districts where there is a deficit of onsite
development opportunities by right and which must receive TDRs in order to develop to the
maximum allowable density. Receiving Area lands may have two zoning densities, the base
density and a bonus density, i.e. a density permitted if TDRs are utilized. The base zone specifies
the density under the present system. In most TDR programs this base density is lower than the
bonus density. In these cases, an overlay or combining zone would specify additional units that

con Id be added only if TDRs were utilized. The Thurston County, Washington, program
established a base density, and the bonus density is either lower or higher, this in response to a
low—density development market. The incentive to developers to use TDRs is not only increased

density, but also the ability to build at lower densities, thereby addressing the single-family large-

lot market.

Receiving area base and bonus densities should not vary too much; this would instigate
oppos ition or legal questions. Permitted base and bonus densities must be politically and legally
acceptable. To locate receiving areas, physical, environmental and social criteria must be met in
order to ensure that development is physically and environmentally feasible, and socially feasible

to aV<>id any NIMBYism (not in my backyard). The current zoning and zoning history of
P°t°ntial receiving sites must be thoroughly understood. Potential receiving sites must be
physi(tally appropriate for both base and bonus use and intensities. Additionally, they must be
politically appropriate because the success of TDR programs relies on the use of TDRs in
receiving areas. The receiving area is probably the most critical aspect of the TDR program since
its ability to accommodate development potential will determine the program’s ultimate success
in perl'l-ranently protecting the preservation area (Gottsegen 1992 p. 10). While gaining consensus
on Wha; areas need to be preserved is difficult, achieving consensus on receiving area, including

location and base and bonus uses, is most challenging. Developers and landowners may argue

Chapter 5

122
that if they are permitted to develop at bonus densities with TDRs, they should be allowed by

right to develop in that same manner without TDRs.

Relationship Between Sending and Receiving Areas
While some researchers and practitioners have stated that the most significant properties

in a TDR program are the receiving areas (Redman/Johnson I994 , Gottsegen 1992, Stokes 1997,

Criss 1997 and Canavan 1997), it is the relationship between sending and receiving properties
that is the most significant element of TDR programming. It is the balance between these two
areas, between the supply of rights allocated and the demand for rights in the receiving area, that
is critical to the success of a TDR program. Any imbalance can lead to program failure. Ifthe
number of receiving opportunities outweighs the sending opportunities, the sending-area
landowners will have an advantage. If the number of sending opportunities outweighs the

rece i v ing opportunities, developers and landowners in the receiving area will have an advantage.
Where the balance is achieved depends in part on the primary goal of the TDR program, whether
preservation or guided development. Because TDR programs are initiated directly or indirectly

as a preservation technique, theoretical literature suggests that the ratio of receiving to sending

Opportunities be two to one (Carmichael 1975 ).

D°V810pment Rights Allocation Methods

Calculating the number of TDRs to be allocated in the sending area and the number of
TDRs to be used in the receiving area are two closely related tasks. To design a TDR program
the t“‘anrirnurn amount of future development under TDR must be determined. Communities can
perfom a build-out scenario using TDRs. Additionally, a TDR allocation method must be
defined and TDRs must be allocated. These tasks, while separate, must be closely coordinated.
Two approaches can be taken, either a “top-down” or “bottom-up” approach. With a top-down

approach, the community first determines the amount of future development appropriate for the

Chapter 5

123
community. This amount is separated into by-right (base) opportunities and TDR (bonus)

opportunities. Once the number of TDR opportunities is determined, the community specifies the
method by which these opportunities will be distributed among sending-area landowners. With a
bottom-up approach, the method of rights allocation is established up front as a policy decision
and the total amount of future development is determined from the sum of rights generated from
each sending area property (Gottsegen 1992 p. 32). This bottom-up approach is frequently used
when program designers use existing or previous zoning as the allocation method. A critical flaw
with this method results when the calculated number of TDRs exceeds the community needs or
development goals. A community must determine if the number of TDR opportunities when
add ed to base development opportunities exceeds community goals or market demand. If it does,

the program will have limited success.

A TDR program must have a method for allocating the development potential that may
be transferred out of the sending area into the receiving area. The method for issuing
devel opment rights should be easy to administer and reflect the loss in land values to those who
are de tried the right to develop their lands. Approaches that have been proposed for issuing
develOpment rights include: per-acreage bases (includes variations which consider property
Characteristics); previous zoning; unit for an equivalent unit basis; and on the actual monetary

1°58 Suffered (Heeter 1975 p. 44).

The per-acreage basis, where a right is allocated for a certain amount of acres, has the
adva-htage of being easy to administer. The advantage to this approach is that sending landowners
feel tl“at the allocation is just, in keeping with the existing zoning. The disadvantage to this
approach is that it is not equitable; the person who owns prime and unique farmland receives the

same allocation as someone with infertile steeply sloping land. One remedy is to account for

preperty characteristics in the allocation method, taking into consideration program objectives
Chapter 5

124
and land use potential of property based on its physical characteristics (See New Jersey Pinelands

Case Study). By allocating rights based on property characteristics, program objectives are
considered. Additionally, environmental features that reflect development constraints can be
considered. Property characteristics that have been used include: soil quality, population density,

crop type, location, size and existence of infrastructure.

Programs that have downzoned in the sending area may opt to allocate rights based on
the previous zoning. For instance, in Montgomery County, Maryland, any property in the sending
areas receives one right per five acres. A farmer with a one hundred acre farm with one residence
would receive twenty rights less one right for the existing residence. The allocation formula, one
right per five acres, was determined by the zoning prior to the TDR program downzoning, one
dwel 1 ing unit per five acres in the agricultural district. By using previous zoning as the allocation
method, perceived development potential was not diminished. An advantage to this approach is
that it is it easy to administer. Like the per-acreage method, the previous zoning method suffers a
disadvantage in that it is not equitable unless the previous zoning method took into consideration

production and development capabilities.

When rights are allocated on a unit for an equivalent unit basis, the existing zoning
Classification is taken into consideration. There is confusion as to whether unit for unit is use or
inter‘Sity specific. Most existing TDR programs are use-specific. Development rights are
allocated based on the density permitted, typically residential housing, and the receiving sites use
the 1fights for increased density in residential developments. Manheim Township, Pennsylvania,
Offers an example, where the allocation of .73 TDRs per acre was based on the practical density
yielded by the zoning designation prior to TDR programming. The advantage of this approach is
that it is easy to administer. The disadvantage is that it depends on sound land use planning. If

the study area is over-zoned, there will be a surplus of TDRs, and therefore the market will be
Chapter 5

125
unbalanced. If a community attempts to accommodate all the development permitted by an over-

zoned ordinance it will need to have a large receiving area(s). This will make receiving area
identification and acceptance even more challenging. This approach also suffers fiom the same
criticism as the per-acre approach: it is inequitable. A solution would be to issue more
development rights per acre to lands deemed more valuable. This complicates TDR program
design, and may prove more detrimental in initiating a program than beneficial (Canavan 1997,
Cri ss 1997, and Stokes 1997). Another criticism of the unit for equivalent unit approach is that in
order to assure owners of development rights compensation, a TDR system must be flexible
enough to allow the owner of one kind of rights to sell them to a developer in need of a different
kind of rights. If the rights are created in an area that currently is zoned single-family, and the

receiving area is an area where multifamily housing is in demand, there is no demand for the

sing 1e family development right.

Each of the above three methods - per acreage, previous zoning and unit for unit basis -
sufE‘e rs from the criticism that it is inequitable. None take into account that some properties are
more Valuable than others. For instance, if there are two landowners who each own ten acres and
the existing zoning permits one dwelling unit per ten acres, then each owner receives the same

Wtehtial compensation, the same number of TDRs, regardless of the value of his/her land.
“Surfing that Landowner A has property with water access and great views, the development
p(’tel'ltial is worth $50,000. Comparatively, Landowner B has property adjacent to a landfill and
faqol'y and thus the development potential is worth S 10,000. However, under these allocation
met“1"0ds, each receives the same number of development rights and each right is valued the same
by a developer who wants to utilize TDRs. It would appear inequitable if each landowner
recei‘v'ed the same compensation for his/her development right. To address this criticism the
anocation method could be refined to establish value of rights. An appraisal would be made and

Landowner A would receive a development right worth more than Landowner B. For example

Chapter 5

126
Landowner A’s development right is worth $50,000 and Landowner B’s is worth $10,000.

However, since one development right, regardless of its orgian, translates into an additional
dwelling unit to a receiving area developer, the right for Landowner B is more attractive. It will

be purchased first and will set the TDR price.

Changing this scenario, where Landowner A has land prime and unique farmland and
Landowner B has infertile sloped land, by accommodating land values, the TDR system will in
efi‘ect be preserving less valuable farmlands while leaving prime and unique farmlands
unprotected. A solution would be to issue Landowner A fifiy development rights and issue

Landowner B ten development right, with each right worth $1,000. This complicates TDR
program design, since now the right to build two dwelling units under the existing zoning
translates into sixty development rights. In order to maintain overall program density, a
deve l oper might then be required to purchase thirty development rights in order to increase
dens ity by one unit in the receiving area. Addressing the inherent inequities of land for both
agricultural production and development makes TDR programming exceedingly more

comp licated. This complication may cause program failure before the program is ever initiated

(Cmavan 1997, Criss 1997, and Stokes 1997).

Early theoretical work addressed another approach to TDR allocation based on estimated
TDR credit value and development easement value. This approach viewed the rights as a readily
fil"gible commodity (Heeter 1975). Each landowner’s loss or gain would be measured before and
afiel— the land use plan and TDR program were implemented. For each property in the sending
area) the appraised development easement value is divided by the estimated average TDR value
to determine the number of credits to be allocated to that property. The average TDR value is
based on an estimation of developer profit. The development easement value is the difference

betWQen a property’s value for development (full market value) and its resource value under a

Chapter 5

127
given set of deed restrictions (deed-restricted value). For example, if the estimated TDR value is

$5,000 and the appraised development easement value for a property is $250,000, then that

property would be allocated fifiy TDRs. The total number of TDRs allocated to all sending area

properties determines the total amount of bonus development in receiving areas.

A major disadvantage of this method is that early in the TDR planning process it depends
on property value and average TDR credit value estimates. Because this is based on current
zoning, it may lead to an unbalanced TDR market, which will undermine the TDR program. The
reliance on current zoning allows current property values to drive the planning process and
therefore has potential to encourage excessive development in rural areas that are over-zoned. An
advantage of this allocation method is that rights become a commodity that can be transferred
between residential, commercial and industrial uses. A developer would be required to possess
rights equal in value to a certain percentage of the value of the land and proposed improvements,
and it would make no difference from where the rights were purchased. This last approach has

been developed in theory, but has not been implemented in any known TDR program.

Transfer Procedure
The three previous main components of a TDR program come together in the fourth main

component, the transfer procedure. There are four different types of TDR transfers, 1) between
dj acent parcels, 2) within a designated district, 3) from non-urban to urban areas within a local
t‘lsdiction, and 4) Within a region between local junsdrctrons. Transfer between adjacent
I) a
l‘Cels may involve parcels under the same ownership, as is the case in several townships in
Ql‘k County Pennsylvania (American Farmland Tmst 1997), or parcels owned by several
1
Ndowners, as in the New York City program. The Chicago program offers an example of the
§ §
Q0nd type of transfer, within a designated district. These first two types of transfers were

1:. 3“
'éValent with first-generation TDR programs. Transfers within a local jurisdiction between rural

Chapter 5

 

«‘3

prc

unc

128

and urban areas gained strength with second-generation programs that sought environmental and
agricultural land preservation. This type of transfer may or may not include the designation of
sending and receiving areas. The last type of transfer, across local jurisdictions, is the most
complex. Sending and receiving zones may exist in all jurisdictions, but most often some
j urisdictions contain sending areas and others contain receiving areas. Therefore, this type of
transfer requires cooperation between jurisdictions at the very least, and most likely, enabling
l cgislation that permits such cross-jurisdictional planning. Examples of this type of transfer
program are found in the New Jersey Pinelands and Thurston County Washington, the former

'under state and federal legislation and the latter under state growth management legislation.

Another essential element of TDR programs is the legal and administrative framework
diat establishes the procedure for the transfer of rights. The transfer process must have a legal
basis and must be administrable. Typically, this essential element of TDR programming is found

in legislative acts and local ordinances. Because most TDR programs entail transfers of rights for

residential use, the procedure by which rights are transferred is often tied to development
133th: itting process. By tying the TDR process to the subdivision process, complexity is reduced.
Additionally, with many TDR programs a public TDR bank plays a direct role in the transfer

prOCedure, for example by allocating rights or issuing transfer certificates.

I he Roles of a TDR Bank

A public bank can prove extremely usefiil in TDR programming. A TDR bank

e<>retically purchases rights with public moneys from sending area landowners and resells them
tQ
Inlders or developers for use in desrgnated recervmg areas. There IS a belief that a TDR bank

i §
tlecessary to ensure the success of a program. While it may be argued that it is not necessary, it

Chapter 5

129
is evident through over twenty-five years of TDR programming that it is invaluable. Banks serve

many roles: lending credibility, as a catalyst, to balance the market and as a facilitator.

The existence of a bank creates credibility; if developers and landowners see that TDRs
are actually being purchased by a bank, they believe the TDRs have value. Additionally, if they
see that the bank can sell TDRs, landowners will recognize that there is indeed a market for their
development rights. TDR banks additionally provide credibility for lending institutions; in effect
the active participation of a TDR bank gives legitimacy to the economic commodity of TDRs and

to the rights transfer process. By observing TDR bank activity landowners and developers will

better understand the overall program and their potential role. In turn, this increased

understanding will lead to participation.

The bank may only serve as a catalyst, making initial purchases in order to encourage or
jump-start private market participation. The creation of the Montgomery County, Maryland,
TDR bank functioned as a catalyst. Although a County Development Rights Fund was

eStablished in Montgomery County, the private market has been so active that no public

Purchases needed to be made.

Beyond acting as a catalyst, the TDR bank may also serve to balance TDR demand over
t1 the. Demand for development has highs and lows; when the demand for development is low,
‘ ‘d therefore the demand for TDRs is low, the bank may serve as a purchaser of TDRs, in effect

a.‘Q‘timg as a buyer of last resort. When demand for development is high, the demand for TDRs
\ s
l 11 be high, and the bank can provide another source of TDRs. “The bank, if adequately funded,

\‘1 balance the supply and demand factors necessary to make a TDR program work. Creation of
§ .
Well-Ended TDR bank can help establish and stabilize the prices paid for TDRs. The Pinelands

edit Bank pays $10,000 per credit. Evrdence from New Jersey indicates that nearly 75% of all
Chapter 5

130
TDR transactions in the Pinelands among private parties have been at this bank established

price.” (Roddewig 1987 p. 27)

Another TDR bank function is to facilitate private market transactions. The Pineland
Credit Bank plays a major role in bringing private-market sellers and buyers together. In
Montgomery County, there was an inquiry into a public bank purchase, but the end result was that

the bank introduced the interested seller to a potential buyer, eliminating the bank’s active role as

a TDR purchaser.

Roddewig and Inghram (1987) state that a TDR bank should be fiinded at a level
sufficient to allow it to buy and sell at least twenty-five percent of the development rights
transacted. This appears high, and implies that private market expectations are low. If
expectations are low, perhaps TDR programming is not appropriate. Additionally, if this level of
public funding is available, purchase of development rights programming may be more
aPEDI‘Opriate. Potential TDR bank funding sources include a millage, a bond issue, general-fund

aPPrOpriations and monies derived from interest of purchase of development rights or

corlServation easement programs.

M andatory Versus Voluntary
There is some confusion in the use of the terms mandatory and voluntary in regards to
TDR programming. In a mandatory program, the zoning classification of the protected area is

1‘1ng by ordinance so that the speculative development potential is eliminated. In a voluntary
rggram, the existing zoning of the protected area is lefi essentially unchanged. A number of

‘

V0 luntary” programs utilize overlay zoning (Roddewig 1987 p. 26). Traditionally, programs

b‘lsidered mandatory are those where the area that contains the resource to be preserved is

anoned or otherwrse desrgnated in the land use plan and zoning ordinance as property that
Chapter 5

131
can no longer be developed in a way that would destroy the resource. Conversely, a traditional

definition of voluntary programs requires that the protected resources are only downzoned or
given protection after the owner of the resource volunteers to participate in the program by
selling TDRs to a developer in the receiving zone. To further encourage participation in voluntary
programs, incentives may be utilized. In Montgomery County, the receiving side is voluntary;
developers can develop with or without TDRs. Montgomery County offers incentives for TDR
use beyond increased development; namely, the avoidance of the traditional planning procedures

for a change in zoning or variance to permit higher densities, and betterment in project status for

i nfrastructure financing.

Given that TDR programming is in its third generation, the definitions of mandatory and
voluntary have become more complex. In order to address whether a program is mandatory or
voluntary, both the sending area and the receiving area need to be examined. A program may be

mandatory on the sending side, that is, the resource area is downzoned; but voluntary on the
receiving side, that is, developers may develop with or without TDRs. A program may also be
Vievved as mandatory, if on the receiving side a developer must use TDRs in order to develop. In

Slich a case, the sending side may be voluntary, that is, only downzoned after landowner program

participation.

The choice between mandatory and voluntary depends a great deal on the political
Q l i IItate at the time of program inception. The essential real-estate and economic analyses are no
q i fierent. Which side of the equation is to be made mandatory will depend on market forces, and
bfi l"liaps which stakeholder groups are most accepting of the TDR concept. If developers familiar
T» i ‘3}: cluster development are generally more accepting of the requirement for TDRs, and if there
§ a strong market demand for the type of development that requires the TDRs, a demand for

Rs will be created by making the receiving side mandatory, and therefore the sending side
Chapter 5

132
could be made voluntary. On the other hand, if the resource community is in strong support of

preservation, it may be more accepting of a mandatory sending-side program, and by creating a
supply of TDRs, the developers would voluntarily seek TDRs to increase their development
potential. Phasing a program, going from voluntary to mandatory, may prove useful. When
development pressure is weak, a voluntary program may be more appropriate. Any transactions,
no matter how few, would be real-world examples of program participation. Once the

development pressure grows, and sprawl becomes a real issue, a mandatory program could be

established.

History

Theoretical Development

TDR combines the concepts of separation of development rights and the control of
development, neither of which is innovative in itself. European policy has included such
concepts in its land management, for example Britain nationalized all development rights in 1947.
In Great Britain development rights are created and allocated by society. “Ownership” is simply
the right to continue using the land as it is currently utilized. Landowners hold no inherent right
to develop. In effect Great Britain’s Town and County Planning Act of 1947 nationalized all
development rights. This Act repealed all zoning laws, established a permit system for
de‘Ielopment, expanded eminent domain powers and vested all development rights in the
go\v'ernment. Development as Great Britain knew it ceased, and in 1953 nationalization was
repealed. Criticisms of the Act included the creation of economic distortions, elimination of
<1 heentives to develop, overly complexity, costly administration, and the vesting of excessive
Q i Scretion in local authorities. (These are some of the same criticisms of TDR programming

1" . .
§ard in the U.S.) In 1975, the Community Land Act was passed (Hagman and Juergensmeyer

Chapter 5

133
1986 p.497). This act like its predecessor, in effect nationalized development rights by giving the

government the power to acquire at current use price all land needed for development.

In the U.S., the TDR concept was first introduced by Gerald Lloyd (1961). In the 1970s,
Chavooshian, Norman and Nieswand (1973) and Costonis (1972, 1974), Rose (1975) and
Carmichael (1975) furthered the concept. Most TDR programs have been established to protect
either environmentally or historically important sites or buildings. Chavooshian et al, studied the
concept of TDR in environmental planning and open space preservation. Rose and Carmichael
examined the legal and economic aspects. Costonis discussed the use of TDRs as a method of
historic landmark preservation that avoided the takings issue. New York City, Chicago and San
Francisco have created TDR programs to protect historic buildings by transferring some or all of
the difference between the floor-area allowance of the designated landmark building in question
and that of the potential new structure that could be developed if the landmark were raised.

Another focus of the theoretical development of TDR centered on agricultural preservation. TDR
was considered as a mechanism to curb urban sprawl, dating from the 1950s, in order to protect
farI'llland and the agricultural community. Other theoretical investigations centered around TDR

as a means to encourage redevelopment, or the development or rehabilitation of low-income

housing (Rory 1975, Roddewig and Inghram 1987).

After pioneering TDR programs were under way, investigators later focused their efforts

1‘ the evaluation of these “first-generation” programs. They helped move forward the theory of

j:\13Rthat led to improvements in “second-generation” TDR programs (T ustian 1983, Pizor 1978,
l
9 8 6, and Roddewig and Inghram 1987). This literature dealt less with the theory of transferable

Velopment rights and more With the practice of TDR programming. Much of the literature was
Q
Q1Tainated by reviews of existing programs.

Chapter 5

——

 

134

Program Development
During the late 19605 and early 1970s a number of “first-generation” programs were

established. Developers in New York City have undertaken actual transference of the right to
development for decades. While they have made use of air rights to construct buildings

exceeding standard zoning density, it was not until 1968 that a TDR program was developed
specifically for landmark buildings. In that same year, NYC amended its zoning ordinance to
permit a transfer of development rights from a designated landmark building to “adjacent” lots on
the same block, across the street or diagonally. The TDRs are allocated based on the unused floor
area ratio (FAR) from the landmark building and are transferred to receiving sites on a one-to-one
basis. The purpose of this TDR program was two-fold; to ensure preservation of historical
landmark buildings and to ensure quality development on adjacent sites. New York’s TDR

program was the first in the country and continues to be one of the most successful (Roddewig

1 987 p. 8).

Collier County, Florida and the New Jersey Pinelands are cited as pioneers of TDR
Programming that seeks to protect environmentally significant forests, wetlands and aquifers
(Roddewig 1987 p. 3). Collier County enacted its program in 1974, amended in 1979, for the

p reservation of ecological resources. The program was intended to protect over 40,000 acres of
environmentally sensitive land, including barrier islands, mangroves, saltwater marshes, coastal

beaches and cypress stands. The program utilized an overlay zone, known as the Special

: t~eatinent Overlay District. Although this district was not originally downzoned (this occurred in

1 g 82), new development was regulated. Landowners with two or more acres in the overlay zone
§§u Id be allocated up to 0.5 dwelling unit for each acre owned. Development rights could be
tfillsferred to multifamily and residential tourist districts, resulting in density increases of ten-
Nenty percent. Originally, transfers could occur only between environmentally sensitive lands

‘56 contiguous nonsensitve lands; this requirement was eliminated in 1979.
Chapter 5

 

_———:

 

135

In 1978 Calvert County, Maryland enacted its TDR program, one of the earliest programs
specifically designed to preserve farmland. Calvert County, located on the western shore of the

Chesapeake Bay near Washington, DC, had experienced extreme growth pressure. The County’s
1974 Comprehensive Plan expressed a necessity to do more to save farmland. The combination of
the pressure and desire for familand preservation resulted in the establishment of a committee
assigned to investigate alternatives. Their investigation culminated in a vote on which alternative
to pursue; TDR programming was selected. The original goal was to preserve 20,000 acres of
prime farm and forest land. It took three years before any rights were transferred. As of July
1 996, the Calvert County TDR program has witnessed 400 transfers at an estimated cost of eight

million dollars to preserve 6,000 to 7,700 acres (Heiberg 1991, American Farmland Trust 1997,

Daniels and Bowers 1997).

Other programs established during the 19705 include Southampton Township, New York
in 1 972; Buckingham Township, Bucks County, Pennsylvania, in 1975; Eden, New York, in
1 977; and Hillsborough Township in 1975 and Chesterfield Township, Burlington County, New
Jets ey, in 1975. Chesterfield’s program was New Jersey’s first municipal program. Chesterfield
Township’s zoning ordinance had permitted voluntary transfer of development potential between

non-contiguous tracts to protect prime farmland since the early 19705; in 1975 the township

adopted a voluntary Transfer of Development Credit (T DC) program.

These first-generation programs share commonalities. One aspect these earlier programs
h
ad in common was that they were created and implemented by small stafi’s who had additional
arming responsrbilities. Redman and Johnson attribute part of early program failure on desrgn
h
am. Due to limited staff and time these programs had a limited opportunity to analyze or

\ Q(iii-‘y program components. The ability to assess and make changes to a program is paramount
Chapter 5

136
to a successful TDR program. Second- and third-generation programs learned from these

lessons. Some designed their TDR program as a single component of an overall program; if TDR
failed the entire program was not at stake. The TDR program in Manheim Township,

Pennsylvania, was constructed in this way.

Another commonality among the first-generation programs was that TDR was established
as an option. In the preservation areas, landowners had the option to either develop their land or
sell the development rights. In effect many of these programs were voluntary and therefore
lacked the development restrictions necessary to create a supply of TDRs from the sending area.
Since the development was not restricted, there was little incentive for sale of rights
(Redman/Johnson 1994 p. 12), whereas those programs with the strictest provision against
developing in the sending district, such as Collier County, Florida and New York City, had the

most transfers (Pizor 1986).

Maabs-Zeno (1981) reviewed twenty-three development rights programs designed to
protect agricultural lands and found that even though there were active real-estate markets in
many of these program areas, only six transfers had occurred. Despite the lack of success of the
first-generation programs, numerous communities that were facing the crisis of urban sprawl and
a need for growth management, investigated the use of TDR to meet local land use or
preservation objectives. Armed with lessons learned from the first-generation programs,

combined with the promise of TDR programs, the 1980s brought a wave of second-generation
Programs. Program designers invested more energy and time in land use analysis, including real-
estate market studies. Second-generation programs learned the importance of stakeholders and
tl’leir inclusion in program design and implementation. Second-generation programs therefore

D l aced a greater emphasis on program participants and the incentives needed to gain their support

Chapter 5

137

and participation. Nonetheless, more failures than successes can be counted among these second-

generation programs (Redman/Johnson 1994 p. 12).

Third-generation programs are a combination of revised earlier-generation programs and
new programs. Chesterfield Township, New Jersey, a first-generation program from 1975, is a
third-generation program with the township approval of the 1997 master plan. Buckingham
Township, 1994, was a revised first-generation program (1975). Thurston County, Washington
(1996), and Manheim Township (1991) are both third-generation programs with no previous

history of transferring development rights.

Many of these third-generation programs included program innovations as a result of
lessons learned from the successes and failures of earlier programs. For example, municipalities
investigated the idea of requiring that landowners purchase TDRs when programs or processes
enhance the value of their lands. Harford County, Maryland, considered the requirement of TDR
purchase in order to achieve zoning changes or variances. Harford has had a TDR provision for
transfers between contiguous parcel that has seen limited use. As a third-generation program,
Harford sought incentives for encouraging TDR utilization. A task force recommended that the
transfer of development rights be initiated through the comprehensive zoning review as a way to
designate receiving properties. They envisioned that there would no longer be any “free”
rezoning. Landowners approved for increased density would be required to buy and use TDRs
equal to the difference of their prior density and their new density. Using TDR in this way, the

comprehensive zoning review would create through rezoning approvals the receiving areas.

San Luis Obispo County has introduced the concept of “married” sending and receiving
si‘tes. In doing so they foster a sense of place across the program region, rather than within either

the sending or the receiving areas. By keeping the sending and receiving sites in close proximity,

Chapter 5

138

the afi’ected community (both preservation and development) can view the preserved site. This
enhances public acceptance of increased density at the receiving site. “The director of the Land
Conservancy of San Luis Obispo stated that the premise behind married sites has been terribly
important, critical. There has been no opposition in the community and strong interest from

landowners who are ready to move ahead.” (Bowers 1995, p.5)

During the 19803 the number of articles written about TDR exceeded the number of
actual transfers (Pizor 1986). While many experts have said that the TDR concept has not yet
lived up to its expectations, in actuality, given TDR’s long term perspective and focus on
development redistribution, perhaps its “success” has been underrated. The presence of TDR
programs in fewer than one hundred communities around the country may be more aof reflection
on the difficulty and complexity of implementing a TDR scheme rather than any real or perceived
low success rate. The question remains, why has TDR not lived up to its expectations? Pizor
(1986) attributed part of program failure to the lack of a clear definition of the program purpose.
Earlier articles credit program failure to design and implementation (Roddewig 1987). For
example, a number of local Pennsylvania programs were designed to transfer development
potential by permitting increased densities; however, these areas were dominated by single-family
large-lot housing and thus had no market for higher density residential development. Without

demand for TDRs, the programs were doomed to fail.

Perhaps failure is more appropriately attributed to timing, design and implementation. In
a number of local TDR programs that have seen no transfers, perhaps these programs will be
successful once a development threshold has been reached. Rather than categorizing these
programs as failures due to absence of transfers, they may in time be successful because the TDR
program was in place before the needed development demand was reached. In other words,

Programs that are perceived failures may actually be laying the foundation for a future successfiil
Chapter 5

139
program. Rather than waiting for the demand threshold to be reached to design and implement

the program, these communities may be proactively planning and thus laying the foundation for

successful TDR programming in the future.

Chapter 5

 

Chapter 6

Legal Aspects

Introduction

Many TDR implementation issues arise from the legal complexity of property and
property limitations. Therefore the legal issues associated with the TDR technique need to be
addressed. TDR raises attention because it is associated with property, the right to use property
and the public right to regulate property and property use. This chapter addresses these legal
issues and the relationship of TDR concepts to these issues. Property rights are first defined and
an overview of the history of property rights in the US. is outlined. The legal aspects of property
rights are discussed. The legal basis for TDR programming will then be addressed, including
enabling legislation, the use of police power and eminent domain. A discussion of takings is
included. Seven individual cases regarding TDR will be summarized to demonstrated the legal

issues presented.

Property Rights
Defining Property ngh ts

Property ownership is often referred to as a “bundle of sticks.” Each stick represents a
right in property. This ‘bundle of rights’ is made up of many heterogeneous, complex, highly
flexible sticks, including claims, privileges, powers, and immunities (Harris 1953, Rose 1975,
Hagman and Juergensmeyer 1986, Barlowe 1986). Rights in land may be either negative or
positive; they may pre-exist a wrong or may arise only because of a wrong. Negative rights are

those of noninterference, such as trespass and unlawful seizure, while positive rights require that

140

141
peOple provide assistance to one another, as in a right to education (Wenz 1988). An individual

entity may hold one right or may hold all rights not reserved by society, they may hold these
rights for varying lengths of time, and they may be attached immediately or at a time in the
future. The bundle of rights is nothing more than the nature of what one can or cannot do with
property according to the social compact at any given time (Olson 1996 p. 8). While the emphasis
on property rights is often placed on what is permitted, the limits inherent in property rights are
equally important. The landowner’s use of the rights contained in his “bundle” is limited by many
factors, including zoning and land use restrictions, building code provisions, environmental law

and other public policy restrictions (Roddewig 1987).

History of Property Rights

Perceptions of private property were established before this country was settled. Property
ownership is founded in the English common-law system. Private ownership was defined as the
right to possess, to use, to manage, to benefit, to be secure and to alienate (Schultink 1997 p. 17).
Common law property dates back to William the Conqueror, the Norman victor of the Battle of
Hastings in 1066. The Normans imposed upon England a centralized and efficient type of
feudalism that had a mutual or reciprocal element. No one was a sovereign; all people were
joined in a form of contract. If one party defaulted, the obligation ceased. Upon arrival in the
“New World,” the European sovereigns claimed ownership rights to land by discovery and
occupancy. This adheres to the theory of property rights originating from conquest and
occupancy derived from Roman law. Legitimacy of settlers claims to landed property may be
argued based on John Locke’s labor theory (Locke 1690). According to Locke, people naturally
owned their own bodies, giving them the right to possess, use, and enjoy their own bodies. This
natural right, according to Locke, gave rise to a natural right to property. Settlers, in using their
bOdy, which was naturally theirs, and acting on land, which was naturally unowned, mixed what

Was theirs with what was previously unowned, producing something of greater use (derived from

Chapter 6

142

Wenz 1988). Since the land resource was a mixture of previously unowned land, with previously

owned labor, a component of the land resource was owned.

Early Americans were against the creation of feudal estates as in Europe. In response,
granting ‘complete property’ in family-sized units was preferred. This has guided our national
land policy. The concept of completeness is rooted in the allodial property system established in
ancient Rome and in pre-Norman England. Allodial land is land that is possessed by a man in his
own right, as opposed to land that is held of another as is the case of feudal land. The concept of
completeness remains in the minds of US landowners, encouraging private parties to use and

abuse their land, and to fieely exchange their rights.

In colonial America, many estates were less than fee simple absolute; land was passed to
the descendants of the original grantor, i.e. they were entailed and known as “fee tail estates.”
This worked against sustainability; there was lack of incentive for those who held fee tail estates
to sustain the viability of the land since their descendants would not directly benefit. The colonial
idea that a landed right was a title or interest in land that was enforceable by law failed to
emphasize responsibility, except that in theory any right presupposes a corresponding
responsibility. Classical economic doctrine, which is embedded in our American way of
thinking, assumed that if a private party were given fee simple title to land they would in pursuing
their own best interests automatically fulfill any responsibilities that they might owe society.

This emphasized the temporal dimension of property rights; for example, at one time a
responsibility to society might be to cut all timber resource for use, at another time to maintain

forest for wildlife habitat.

In the administration and deposition of all publicly held land, the government under the

Land Ordinances of 1785 and 1787, transferred to private parties all rights in land except the
Chapter 6

143
rights to tax, condemn, and police, and the inalienable interests referred to as escheat and

spending power. By reserving these rights, the founding fathers embedded in the land use
framework an ability to contend with equity and the general welfare. Methods of alienation used
by the colonies included land by sale, special purpose grants made by settlement agencies. The
motivation on the part of settlement agencies was to supply as rapidly as possible the various
economic activities and social facilities that a normal community needed (Harris 1953). This
motivation continues today, with states and municipalities encouraging development through

incentives to meet employment needs and to feed the municipal coffers.

In transferring the largest bundle of rights, the ownership was “fee simple,” or fee simple
estate. The fee simple tenant held the exclusive rights to use or abuse, to sell, to bequeath, to will,
to subdivide, to consolidate, to mortgage, to lease, to exclude others, to grant easements, or to
create any type of lesser estates, except those specifically prohibited by law. The legal,
economic, and social setting in which these land tenure principles evolved emphasized rights and
ignored responsibilities (Harris 1953).

An early American ideal was that “every farmer should sit under his own vine and fig tree;” or
that America should be a land of resident occupiers. This notion persists, in the current land

paradigm that includes America as a land of home owners.

Historically the uniquely American concept that land is abundant allowed land to be
treated like any other class of property (Hite 1979). Land was plentiful and labor was scarce.
Cheap land had a profound influence on the American attitude regarding land use and

management, and that attitude has had lasting effects on land policy and landed property law.

Chapter 6

144

Legal Aspects of the Bundle of Rights

Property is used to denote legal relations between persons with respect to a thing.
Property consists of rights with respect to material objects. If you think only of possessing
objects, then inflexibility results. If land is thought of in terms of rights, flexibility is achieved.
Property is a social construct. Only when more than one person exists does the notion of property
come into being. State and local statutes that define the bundle of rights create property rights.
Because society creates property there are inherent public rights and inherent limitations for the
public good associated with private property (Cortes 1998). While the right to property may be
perceived as an absolute right, in reality it is constantly changing. The right to property is based
on the social function theory of ownership, where ownership is not absolute or immutable but a
changing concept that is constantly redefined to permit ownership of property to fill whatever role

a given society assigns it at a given time (Hagman and Juergensmeyer 1986 p.291).

The ownership of land includes a number of rights such as minerals, timber, water, air
and development, which together comprise “title” to or “ownership” of land. A development
right is equal to the unused development potential of a parcel of land, i.e. the difference between
the existing use of a parcel and its potential use as permitted by existing law (Redman/Johnson
Associates 1994, Pizor 1986). Traditionally, the right to develop has been regulated through
zoning. The basic legal element behind TDR is that development rights are individual and
separable rights in the “bundle of rights.” Furthermore, these rights can be legally transferred to
another property. A number of court decisions that involved rights, including water, mineral, air,
pollution credits and easements, have upheld that property interests are divisible and transferable

(Pennsylvania Coal Co. v. Mahon1 (1922); West Montgomery County Citizens Assoc. et al v.

K

‘ 260 US 393 (1922)
Chapter 6

145
Maryland-National Capital Park and Planning Commission2 (1987); Soldinger v. Northwest

Airlines inc.3 (1996)).

TDR Enabling Legislation

While all states have enabling legislation that gives local governments the authority to
zone, by the late 1980s less than half of them, along with the District of Columbia, had
specifically mentioned TDR as a function of local government planning, zoning, or land use
regulation (Redman/Johnson 1994 p.7, Roddewig 1987). Demonstration legislation was passed
in the State of New Jersey for Burlington County and currently the Virginia Legislature has
appointed a TDR study committee. The States of Kentucky and Maryland, along with the
Commonwealth of Puerto Rico, authorize the concept through specific TDR enabling legislation.
The state of Washington has passed growth management legislation that identifies TDR as a
potential technique. Ideally there would be state enabling legislation for TDR systems. Such
legislation would be backed by planning studies and specify how TDRs are to be created and how
their marketplace is to be established and run. If state enabling legislation does exist, care must be

taken to follow its requirements.

The question remains as to whether or not TDRs can be effectively implemented in the
absence of state enabling legislation. There are numerous TDR programs that exist in the absence
of specific state enabling legislation. Their legitimacy may lie with TDR as an extension of
broader land use regulatory authority. Roddewig (1987) inquired whether the legal basis for

planning, zoning and land use protection inherent in local government police power extends to

TDR programs.

 

2 522 A. 2d 1328, 1330 (1987)
3 51 Cal. App. 4th 345; 1996 Cal. App. (1996)

Chapter 6

146

Legal Basis Beyond Enabling Legislation

There are two predominant rationales why TDRs are legally defensible. The first legal
rationale for TDR is based on the police power. The values of public safety, health, peace, good
order and morals were set as the standard for valid exercise of police power in the 1890 Supreme
Court decision in Crowley v. Christensen.4 Rights of an owner of an increasingly scarce and
valuable resource can be restricted in order to protect the public health, safety and welfare. This
may be the most appropriate legal basis for TDR. Courts have upheld police power regulations
that decrease the value of lands so long as the loss does not go so far as to constitute a taking.
The second bases the legality of TDR on the powers of eminent domain. In this instance the
rights of certain landowners to develop their lands are condemned and the payment of
transferable “rights” or “certificates,” not of cash, is made. The rights promise payment at some
time in the future. The question then is whether TDR is defensible under the power of eminent

domain. A valid public purpose and necessity for the condemnation must be proven.

Is TDR a Legitimate Use of Police Power?

Land is viewed as a commodity and the owner is entitled to get the most for it, subject to
public regulation. The Fifth Amendment of the US. Constitution states that private property
shall not be “taken for the public use without just compensation,” nor shall anyone be deprived of
property or life or liberty, “without due process of law.” Through the Fourteenth Amendment
due process requirement, these same principles apply to states. While the US constitution
recognizes that landowners are generally entitled to realize their property’s full development
potential, some restriction on development is acceptable. A land use restriction may be held

constitutional, and therefore the landowner’s economic loss will go uncompensated.

 

4 137 US 86, 11 S.Ct 13, 34 L. Ed. 620
Chapter 6

147
There is nothing inherent in the right of the property ownership that would allow an

owner to injure or interfere with the rights of others. Police power is based on the necessity to
safeguard the public interest. Therefore, a regulation that restricts private or public use that
would interfere or injure the rights of others is not in itself a taking of private property. Public
regulation, zoning, and subdivision are based on the police power - the right of the public to
protect its health, safety, morals, and general welfare. The police power does not consider private
economics, nor does it include protection of the public’s economic interests (Gans 1975 p.34).
There are a variety of legitimate public purposes. Courts have continued to expand the concept of
a valid public purpose with regard to regulations (Redman/Johnson 1994). Some public purposes
are to protect public health and safety; such is the case with flood-plain protection. Other
purposes serve to preserve natural resources, which is defensible under the public’s right to
protect its general welfare. Examples include protection of groundwater recharge areas and
protection of viewsheds. An additional set of purposes that has received judicial recognition is the
timing and phasing of development with the availability of services (Carmichael 1975 p. 31).
Timed or phased growth control measures have been upheld by courts. Since TDR programming
is dependent on the appropriate location of development and the timing of that development with
infrastructure development, this may be the type of purpose that legitimizes TDR use as a police
power. In order to have legitimate sending and receiving sites, it is critical that there be clear and

credible public purposes.

The courts have recognized the legitimacy of government regulations, within limits, even
though such regulations can result in substantial changes in (land use) value. Typically, courts
have upheld land use regulations if there is no limitation on the reasonable use of the property
(Morris County Land Improvement Co. v. Parisippany Troy Hills Townships). However, if there

is a limitation on the reasonable use of property, a taking has occurred. While there is no clear

Chapter 6

148
definition of a taking, the courts have been consistent in allowing substantial reductions of

property value without recognizing it as a taking as defined in the Fifth Amendment. When the
Supreme Court upheld zoning in Euclid6 (1926) and in Penn Central’ (1978), it made clear that a
mere diminution of value does not in and of itself constitute a taking. In the earlier case the
landowner’s property value was reduced by seventy-five percent. Hadacheck v. Sebastian8 (1915)
upheld a 87.5% diminution in value. In William C. Haas v. City and County of San Francisco’
(1980) the court ruled that no taking where value of property diminished by ninety-five percent.
In Andrus v. Allard'0 (1979) it was determined that “a reduction in the value of property is not
necessarily equated with a taking.” In Keystone Bituminous Coal Assoc. v. De BenedictisH
(1987) the Court recognized the upholding of regulations that destroy or adversely affect real-

property interests in the absence of permanent physical occupation.

Several tests have been applied by courts to determine whether a taking has occurred. A
court first determines whether property rights are involved. By definition, if property rights are
not involved there can be no taking. If property rights are involved, a court examines whether the
regulation bears a reasonable relation to the public health, safety and welfare, and whether it
provides a reasonable beneficial use of the land. The public benefit is weighed against the
private harm. Regulations established for the purpose of public benefit rather than to prevent
harm have traditionally found to be a taking. The Lucas12 (1992) decision made an important
distinction; the US Supreme Court decided no matter how great the public interest is, a regulation
that denies all economically viable use of land is a taking and requires compensation.

Additionally, land use restrictions and regulations that ‘exact’ an interest in land from the

 

5 40 NJ 539, 193 A.2d 232 (1963)

6 Village of Euclid v Ambler Real Estate Company 272 us. 365 (1926)

7 Penn Central Transportation Co. v. City of New York 438 US. 104 (1978)
8 239 US. 394 (1915)

9 605 F. 2d 1117, 1120-21 (99 Cir. 1979), cert. denied, 445 us. 928 (1980)
‘° 444 US. 51, 66 (1979)

Chapter 6

149

property owner where there is no reasonable relationship between the property owner’s proposed
use and the impacts to be reduced or prevented constitute a taking. In Nollanl3 (1987) the US
Supreme Court mled that a regulatory taking had occurred when the landowner was granted a
permit subject to the condition that he allow the public an easement. Justice Scalia stated ‘fimless
the permit condition serves the same governmental purpose as the development ban, the building
restriction is not a valid regulation of land use but an out and out plan of extortion.” (Mandelker

1990 p. 118)

Police Power Considerations for TDR

A TDR program must be designed so that the base zoning in both the sending and
receiving areas does not take all economically viable use. Typically, agricultural use remains in
sending areas, and some level of development use remains in receiving areas absent TDRs, so all
economic use has not been taken. TDRs by definition may not constitute an exaction, because the
easement does not require public use. However, it may be argued that the preservation of open
space represents a public interest and therefore TDRs amount to an exaction. In this case a
‘reasonable relationship’ must exist between the property owner’s proposed use and the impacts
to be reduced. For example, setbacks or greenbelt regulations must relate to a reasonable

necessity to protect riverbeds from erosion and sedimentation, or to protecting property values.

Zoning as a police power

Zoning is an exercise of police power. While some states delegate their power to zone to
statewide agencies, most states delegate their police power to local governments, including cities,
villages, towns, and counties. In Michigan this power is delegated to municipalities and

townships. A state can delegate power in a number of ways and the power to zone may derive

 

" 480 U.S. 470 (1987)
‘2 Lueus v. s. Carolina 112 5. Ct. 2886 (1992)

Chapter 6

150

from more than one source. Home-rule power is authorized either by a state constitution or by a
legislative enactment. The source of power for most zoning in most states is the state enabling
act. In Michigan there are three zoning enabling acts: City-Village Zoning Act (1921), Township
Rural Zoning Act (1943), and the County Rural Zoning Enabling Act (1943). Because the right to
develop is conferred by zoning that stipulates the kind and number of permitted development
(Gans 1975 p.35), zoning may legally stipulate the transference of the kind and number of
permitted development. This is where many TDR programs have been grounded. A number of
communities, including Montgomery County, Manheim Township and Peninsula Township, have
argued that TDR falls under their authority to zone, wherein the use of land is regulated to
achieve the health, safety or welfare of the community, and is thereby a legitimate use of police

power.

Zoning Considerations for TDR

Downzoning, which involves the lowering of permitted densities from those allowed by
present zoning, is legitimate when it furthers the public health, safety and general welfare, or
furthers the appropriate timing and phasing of development with the availability of services. In
regards to TDR, it may be argued that downzoning is bolstered by the allocation of surplus TDRs
inside the sending area. This suggests TDRs as form of compensation, and therefore that the
TDR process is one of eminent domain rather than police power regulation. However, Justice
Scalia in the dissenting opinion in Suitum14 stated that compensation does not concede a taking.
To avoid TDRs being perceived as compensation, planning purposes should be clearly defined
and documented. TDRs should be used as a technique to further these established purposes.
Therefore, TDR strengthens downzoning rather than downzoning strengthening TDR. By

designing and implementing the TDR system in this manner, it has a higher likelihood of being

 

'3 Nollan v. California Coastal Commission 483 US. 825 (1987)
" Suitum v. Tahoe Regional Planning Agency No. 96-243 Decided May 27, 1997.

Chapter 6

151

viewed in the judicial system as a variation of the police power and not as a form of eminent

domain.

It has been established that land restricted beyond reasonable use constitutes a taking and
would be invalid unless just compensation was paid to the restricted landowner. When designing
a TDR program, the new zoning designation under TDR should not be vary too far from the pre-
TDR zoning/designation, to eschew the question of reasonable use. Additionally, earlier
researchers (Carmichael 1975) indicated that densities in both the sending and receiving areas
should not be manipulated for the sole and overt purpose of setting the stage for the creation of a
TDR marketplace. This would clearly violate the rights of property owners and incur judicial
hostility (Carmichael 1975 p.32). In actuality second and third generation programs have
downzoned as part of TDR implementation. Furthermore, the TDR court cases that have arisen

have not focused on this aspect.

Zoning and other land use regulations have been challenged on three other grounds
beyond takings: substantive due process, procedural due process and equal protection. Within the
land use arena, substantive due process means that land use regulation must promote the public
health, safety, morals and general welfare. Procedural due process considers the administrative
propriety from which a regulation derives its authority (Hagman and Juergensmeyer 1986 p.299).
Ofien procedural challenges deal with right to public notice and right to appeal. The equal
protection challenge requires that land use regulation be related to property public purposes.
Additionally, a reasonable regulation must be applied to all in the same manner. As a growth
management technique, TDR does address valid public purposes. TDR programs must be well
designed and include an appeals process in order to address procedural issues. The equal
protection challenge is best addressed by basing the TDR program on sound planning, including

ties to master plan and zoning processes.

Chapter 6

152
It may be argued that the transfer of development rights is indeed a “taking” and does go

beyond police power regulation. If it is determined that a taking has occurred, the restriction will
be held invalid unless just compensation is paid. If TDR programming represents a taking, the

legal basis of the program must involve the exercise of the power of eminent domain.

Is TDR a Legitimate Use of Eminent Domain?

Early literature cites TDR as a means of compensation, implying that the power of
eminent domain is in use. When the power of eminent domain is used, land is taken from private
use for public use with just compensation. Eminent domain results in the condemnation of
property for a public purpose and payment of just compensation. The federal government, each
state and municipalities generally have the power of eminent domain over property within their
jurisdiction. Eminent domain is the right and power of a sovereign state to appropriate private
property to uses for the public good. This power to take property for public use is an attribute of
sovereignty and inheres in the sovereign, though the power is activated by and may be conferred

on non-sovereign entities by legislative declaration (Hagman and Juergensmeyer 1986 p. 591).

Historically, the use of the powers of eminent domain was granted first in the early 1800s
to turnpike, canal and railroad corporations. The right was also granted to the owners of mill sites
to erect dams upon payment of compensation for the flooding to upstream landowners.
Additionally, the powers of eminent domain were cited in the formation of drainage and irrigation
districts and their management. In these instances districts were typically created by landowners
within a proposed district that could be benefited by a common drainage system. Once formed, all
lands within the district were assessed for benefits conferred and could be levied upon and sold to
satisfy unpaid assessments. “The use of eminent domain in these settings, set the doctrinal stage

for the broad “public purpose” justification for the use of eminent domain and police power

Chapter 6

153

regulation. Under these systems, a major feature of desirable land use was determined by

majority rule.” (Carmichael 1975 p. 30)

In determining if TDR use is valid under the powers of eminent domain one question that
must be addressed is whether or not the “compensation” of development rights constitutes valid
compensation. Does the acceptance of the development rights constitute a “payment” to fillfill
the just compensation requirements of the exercise of the eminent domain power (Rose 1975)? If
TDR programming is to be a legitimate use of the power of eminent domain, it is necessary to
comply with well established principles which define “just compensation”: money as
compensation, unconditional compensation, definite damages not based on uncertain future
events, full compensation, and compensation based upon the property value at the time of the

taking.

The first principle requires that compensation be in money. This principle is violated
because the landowner is compensated with rights or certificates rather than money. The second
legal principle of just compensation requires that it be unconditional. This principle is violated
because the compensation is conditioned upon the creation of a development right market. In
other words, at the time of TDR creation, the sending landowner may not have a willing buyer,
his compensation is conditional on the existence of a willing buyer and a process by which the
right can be sold. While proper TDR program design can ensure a process, it can not ensure a
willing buyer. The use of TDR banks may address this notion of “unconditional” and therefore

satisfy this principle by acting as buyer of last result.

A third principle requires that the damages be definite and not based upon uncertain
future events. This principle is violated because the value of the right relates to the potential of

increased value of other lands, namely the lands that can be developed. The development right
Chapter 6

154
market is dependent on the uncertain development right supply and demand. It is impossible to

guarantee in a free market that any TDR seller will be able to sell rights whenever he/she wants

and that he/she will receive full dollar compensation.

The fourth principle requires that compensation be based upon the value of the property
at the time of the taking, without regard to subsequent inflationary effect upon the property’s
value. This principle is violated because the value of the rights depends upon the value of the
right to develop other land at the time of the sale of the right rather than the value of the right to
develop the owner’s land at the time of the taking (Rose 1975). However, it may be argued that
in most TDR programs, the right is valued, not simply based on what the developer is willing to
pay (i.e. the value of the right to develop other land) but also based on what the landowner will
accept (i.e. the difference between what is allowed under base density and what was previously

allowed).

TDRs may not be viewed by courts as a valid form of just compensation. TDRs were not
intended as “just compensation,” nor could they be under well-established precedents which hold
that just compensation must be the equal in money to the value of the land (Siemon et al. 1996
p.7). Perhaps for this reason theoretical analyses and discussions of TDR programming no
longer refer to TDRs as “compensation.” In fact, program developers avoid the word. TDRs are
now referred to as an “option” or “alternative.” By moving toward option or alternative the
concept of TDR fits better within the police power framework. The ability to exercise the option
to voluntarily sell their rights to developers offers landowners compensation for the development
restrictions placed on their land, thereby avoiding the legal issues associated with a taking

without compensation (Redman/Johnson Associates 1994).

Chapter 6

155
TDR as a Hybrid

In actuality, TDR finds itself somewhere in between police power and power of eminent
domain. Because it does not fit neatly into one of these powers it has been disregarded, and its
legality has been questioned. Because TDR breaks the bond between a parcel of land and its
development potential and allows that potential or development right to be transferred to a
separate site, it is unlike the exercise of the police power, where the owners of preserved land are
not compensated for the deprivation of the development value of their land (Redman/Johnson
1994 p. 8). Use of TDRs differs from traditional eminent domain in that traditional eminent
domain the landowner is deprived of use and title to the property itself. With TDR full title and
use of the property are not taken away. The landowner is deprived only of the right to develop.

TDR program designers should ensure that fiill title and full use are not taken away.

Because the property remains on the tax rolls it is unlike the exercise of the power of
eminent where the property becomes public property and does not remain on the tax rolls.
Another difference between TDR and eminent domain is that with the latter owners of the
remaining unprotected property within the jurisdiction are burdened with additional taxes. With
TDR only the owners in the receiving area who are benefiting from increased development are
‘burdened’ with additional taxes. In effect, TDR helps adjust the tax structure to those who
should bear it. It may, however, be argued that everyone in the program area should pay for the
preservation, that the burden should not fall predominantly on receiving-area landowners or

sending-area landowners.

The legal basis of TDR may be perceived as an exercise of police power or as a use of
eminent domain. A number of state and federal court cases have exemplified this mixed
perception. A dichotomy arises regarding whether TDRs are adequate partial or total

compensation for a regulation’s possible confiscatory impact or a mitigating factor that enters the
Chapter 6

 

 

156

analysis of whether the property owner retains a reasonable return on or minimal beneficial use of
the property (Siemon et al. 1994 p. 20). Only if the TDR regulation is found to have no
relationship to the public welfare or results in the loss of all reasonable economic return do
eminent domain questions arise. An examination of case law will provide insight into the

considerations within the judicial system regarding TDR.

Case Law

When enacted pursuant to a proper legislative grant of authority and by pr0per procedure,
TDR programs have almost uniformly been upheld by the courts. Many of these courts
have at least implicitly upheld extremely restrictive regulations which might arguably
otherwise have constituted a taking because of the existence of a TDR program, making
the inclusion of such a program even more advisable (Siemon, et al. 1996 p. 2)

A number of State and federal court decisions involving transferable development rights
programs have been rendered supporting the TDR concept. In some cases TDR has been upheld
as a valid exercise of the police power. Other cases have held that TDRs may serve as either a
form of just compensation or as an element in the evaluation of economic loss due to the
regulation. In some cases while the regulation was found invalid, the TDR concept was

recognized by the court and its legality was not at issue.

French v City of New York (1976)

The first landmark TDR case was Fred F. French Investing Co., Inc. v City of New
York" (1976). The city attempted to protect two small private parks within the plaintiff’s
residential complex from development by rezoning them as a ‘Special Parks District.” The
rezoning prohibited the site from future development but did allow passive recreational use. With

city approval, the plaintiff was allowed to transfer development rights from the parks to property

 

‘5 39 NYS. 2d 587, 350 NE 2d 381, 385 NYS 2d 5 (1976), cert. denied, 429 us 990 (1976)
Chapter 6

157
zoned for high-density commercial use located within a designated twenty-two block receiving

area in mid-Manhattan. Specific receiving sites were not identified in the receiving area. The
plaintiff challenged the land use regulation as an unconstitutional taking of private property
without the payment of proper compensation. While the court did not find a taking, it found the
rezoning unconstitutional, since it amounted to a deprivation of property rights without due
process of law. The court examined whether any economic value was retained after the
regulation and determined that the restriction deprived the plaintiff of the opportunity to derive a
reasonable economic return. While the court invalidated the regulatory program, it regarded the
inclusion of a TDR program favorably. The court conceded that “development rights are an
essential component of the value of the underlying property because they constitute some of the
economic uses to which the property may be put.” New York’s highest court felt that the TDRs
fell short of achieving a fair allocation of the economic burden (Siemon et al 1994 p.12). The
court was bothered by the uncertainty surrounding the value and salability of the particular TDRs
created by this ordinance. In part this was attributed to the absence of specific receiving

properties.

Penn Central v City of New York (1978)

The most frequently cited case regarding the transference of development potential is
Penn Central Transportation Co. v. City of New York‘6 (1978). Under the city’s Preservation
Act, Penn Central, the owner of the New York landmark Grand Central Terminal, could not build
an office tower over the terminal. Penn Central brought suit against the city, claiming that the
landmark’s regulation was in effect a taking. In this case the New York Court of Appeals and the
US Supreme Court upheld New York City’s Landmarks Preservation Act. The New York Court
of Appeals held that there was no taking because there was no physical invasion. The issue was

then whether the regulation violated due process by depriving Penn Central of a reasonable

Chapter 6

 

158
return. The court determined that Penn Central did have the capability to earn a return from the

parcel, through the availability of transferable air rights and through the terminal’s current use.
The court viewed the existence of TDRs as a mitigating factor in determining the validity of the
regulation in question. Furthermore, in Penn Central, unlike French, there were several
identifiable receiving parcels owned by the plaintiff in the vicinity of the terminal and suitable for
the proposed use. “The city’s TDR program as it applied to a specific piece of property was
important in the decision. New York’s highest court approved the development rights concept in
theory and developed a standard for detemlining when the provision of TDRs is constitutionally
sufficient to offset any burden imposed on a property owner by regulation or protection of a
landmark property.” (Roddewig 1987 p. 15) While the New York Court of Appeals did not have
to view the TDRs as possible “just compensation” because there was no taking, it did comment of
the consideration of TDRs:

...If the substitute rights received (the TDRs) provide reasonable compensation for a

landowner forced to relinquish development rights on a landmark site, there has been no

deprivation of due process. The compensation need not be the “just” compensation
required in eminent domain, for there has been no attempt to take property. (366 NE 2d at

1278)

The US. Supreme Court affirmed the lower court’s finding and commented generally on
the TDR concept. The Supreme Court majority opinion agreed that Penn Central was not denied
all economic use because rights could be transferred to several parcels. The US Supreme Court
stated:

While these rights may well not have constituted ‘just compensation’ if a ‘taking’ had

occurred, the rights nevertheless undoubtedly mitigate whatever financial burdens the law

has imposed on appellants and, for that reason, are to be taken into account in
consideration of the impact of regulation. (438 US at 137)

The Supreme Court conceded that in this takings claim TDR had value.

 

‘6 42 NY 2d 324, 366 NE 2d 1271 (1977), arrd, 438 US 104, 98 5.0. 2646 (1978)
Chapter 6

159
Aptos Seascape Corp. v County of Santa Cruz (1982)

In Aptos Seascape Corp. v. County of Santa Cruz”, the decision of the Superior Court of
Santa Cruz County that property had been taken and awarding damages was reversed due to the
presence of TDRs. Seascape Corporation purchased 110 acres of unclassified property in 1963.
A contour dividing line separated the parcel into two parts, at the high side were forty acres
known as the benchlands and at the low side were the seventy acres in question. A condition of
purchase was the rezoning to residential, with a commercial hotel use permitted on one portion of
the benchlands. In 1972 the County of Santa Cruz rezoned the subject property as unclassified
and the benchlands as R-l-6-PD, as family residences planned development district. The
ordinance essentially prohibited any development on the seventy acres of beachlands., In 1973
Seascape sued the county, claiming a taking. Seascape alleged that by rezoning, the county
deprived it of all reasonable use. Seascape had not filed a development plan or plans under the
new ordinances. The trial court found just compensation in the amount of $3. 15 million was due
to Seascape. The court offered an alternative means of compensation; the judgment granted
Seascape compensating higher densities on its benchlands and uplands. Upon the issuance of
permits, Seascape was to convey an open-space easement in perpetuity for the subject property.
This compensation alternative was presented as an option. However, the county did not exercise

that option but instead appealed the judgment.

The appeals court stated “that although development of the subject property is prohibited,
the county’s ordinances permitted granting of compensating densities to Seascape on the
benchlands and its other nearby properties.” Therefore the court concluded that mere enactment
of the ordinance in question did not constitute a taking. The appeals court directed the trial court
to modify its order by adding that the cause was dismissed on condition that the County grant

Seascape compensation densities. Furthermore, the county had the burden of proof that it

Chapter 6

160

awarded reasonable compensating densities or some other transfer of development rights to
Seascape in exchange for the prohibition against building on the subject property. The appeals

court thus supported the use of TDRs.

Corrigan v City of Scottsdale (1985)

In Corrigan v. City of Scottsdale", the court examined the validity of the city’s zoning
ordinance that established the Hillside District with sending and receiving areas. In 1963,
Corrigan’s property was zoned for single-family residences. In 1977 Scottsdale rezoned the area
that encompassed Corrigan’s property into the Hillside Conservation Area and the Hillside
Development Area. Within the Conservation Area essentially no development was permitted.
Corrigan owned land within the Hillside District and sued the city claiming the ordinance was an
unconstitutional use of police power and amounted to a taking of property. At least seventy-four
percent (3,523 acres) of Corrigan’s land was in the Conservation Area. Corrigan argued that the
primary purpose of the ordinance was to obtain a permanent mountain preserve for the public

without cost. The trial court sustained the validity of the ordinance and Corrigan appealed.

The Hillside Conservation Area and the Hillside Development Area are separated by a
‘no development’ line determined by unstable slopes, bedrock areas, slopes of greater than fifteen
percent, and rocky soils subject to severe erosion. While no development was permitted in the
Conservation Area, development was subject to limitations in the other area. Land within the
Conservation Area was secured for conservation of permanent natural open space through
easements or dedication. Density credits, TDRs, were allotted and could be transferred for use in

adjacent land with the Development Area. A study of ownership patterns revealed that owners

 

‘7 138 Cal. App. 3d 484; 1982 Cal. App.
‘8 149 Ariz. 553; 720 P. 2d 528; 1985 Ariz. App.

Chapter 6

161

of property, including Corrigan, had developable areas in the receiving areas sufficient to

accommodate the transfer of TDRs from land in the Conservation area, i.e. the sending area.

Because Corrigan had not submitted a plan for development for the property the only
question was whether the mere enactment of the Hillside Ordinance constituted a taking. The
court examined whether a legitimate state interest was substantially advanced by the Ordinance
and whether the ordinance denied the Corrigan the economically viable use of the land.
Regarding the constitutionality of the regulation, the trial court applied the principal test whether
the zoning bore a substantial relation to the public health, safety, morals or general welfare. The
appellate court stated, “as long as the reasonableness of the ordinance in question is fairly
debatable the courts must uphold the zoning ordinance.” Corrigan did not argue that the Hillside
Ordinance did not substantially advance legitimate state interests. Safety concerns included

minimizing rock slides and reducing damages from washouts and landslides.

The appellate court in this case was required to determine whether the use of transferable
development rights to preserve Open space was an exercise of the police power or of the power of
eminent domain. Judge Grant in the opinion stated, “the court was faced with an ordinance which
was an attempted hybrid between police power and eminent domain. The City claimed the action
was a legitimate exercise of police power and yet it attempted a form of compensation by way of
the TDRs. If this were a valid exercise of police power there would be no need for any form of
compensation.” There was no question that the Hillside Ordinance prevented any development
on the largest parcel of Corrigan’s land. The court determined that the Ordinance was an invalid
use of police power and constituted a taking. The court thus addressed whether the TDRs could
be given as a form of fair compensation. The Arizona Constitution provides that fill]

compensation be first made in money (Article 2, Section 17). The court held that under the

Chapter 6

162
Arizona Constitution the transfer of density credits, the TDRs, did not constitute just

compensation. Thus the appellate court reversed the judgment of the trial court.

Barancik v. County of Marin (1988)

In Barancik v. County of Marin” (1988) the appellate challenged the Marin County
zoning plan and Niscasio Valley Community Plan, which included TDRs, contending that it
constituted an unreasonable application and was without substantial relationship to the public
good. The property in question was the Loma Alta cattle grazing ranch in the Nicasio Valley. In
1973 Marin County adopted its countywide plan rezoning properties including the ranch for
conservation or agricultural uses. The purpose was to assure ranchers that their operations would
be protected from residential development. In 1979 Marin County approved and adopted the
Niscasio Valley Community Plan which reaffirmed the valley’s commitment to agriculture and
recommended that Loma Alta Ranch be rezoned to one residence per sixty acres. In 1980
Barancik purchased the property in question. In 1981 transfer of development right amendments
to the Niscasio Valley Community Plan were adopted. Under the amendments, valley ranchers
could sell to other valley property owners the right to develop within the regulations of the
community. While the zoning permitted Barancik to build nine residences, he proposed a plan to
build twenty-eight clustered residences. He argued that grazing could continue. The Planning
Commission indicated the plan could be approved if Barancik acquired TDRs from other
ranchers. Barancik was unwilling to pay for the TDRs and applied for rezoning in 1983. This
request was denied. The county cited that the increased density would increase the potential
conflicts between residential and agricultural uses and Create uncertainty in the agricultural

community.

 

‘9 872 F. 2d 834; 1988 US. App; cert. denied (1989)
Chapter 6

163
Barancik alleged that the regulation was unconstitutional in that it denied due process and

that it violated the right to equal protection. Regarding the substantive due process challenge, the
district and appellate courts found the zoning regulation reasonable. There was validity in
minimizing the conflict between urban and agricultural uses. The appellate court said that “the
Countywide Plan was a legislative declaration that there was a corridor in Marin agricultural in its
use.” Barancik argued that his case was similar to Nollan v. California and that he could receive
permission for his development if he paid a price. The appellate court found a significant
difference, Barancik was not being given a dispensation from zoning by a fee payment to the
state. The regulation simply permitted Barancik to accumulate development rights in the same
area by a price paid to owners of rights. The appellate court affirmed the district court decision.
Judge Noonan in his Opinion stated:
In other words, a finite amount of development is permitted in the area. The County is
rightly indifferent as to who does the development. It lets the market decide the price. A
purchase of Transfer Development Rights does not increase the total amount of
development possible in the rural corridor. The regulation permitting the accumulation

of transfer rights is rationally related to the overall purpose of preserving agriculture in
the area.

West Montgomery County Citizens Assoc. v Maryland —National Capital
Park and Planning Commission (1987)

In West Montgomery County Citizens Association v. Maryland-National Park and
Plarming Commission20 (1987) the process for transferring transferable development rights was

found invalid. However, the Maryland Court of Appeals did not invalidate the TDR concept.

The concept of TDRs is simple and straightforward. Ownership of land carries with it a
bundle of rights, including the right to construct improvements on the land. These rights
are subject to government regulation where reasonably required to accommodate public
health, safety, or general welfare, and ordinarily these limitations of use may be imposed
without the necessity of paying compensation to the land owner. There may arise
situations, however, where the limitation of use imposed of the public good inflicts an
economic impact on the landowner, that, while not confiscatory, is so substantial as to
prompt the government to provide some type of compensation. Cases involving the

 

2° 522 A.2d 1328 (1987)
Chapter 6

 

164

preservation of scenic easements of historic or architectural valuable landmarks,

preserving as they do benefits to the public that are largely cultural or aesthetic, yet

concentrating the burden upon relatively few, have moved government officials to find
ways to compensate the affected property owners. In Maryland, recognizing the
importance of agricultural land, and the efficacy of restricting the rights to develop land
as a means of accomplishing that objective, has developed a system for purchasing
agricultural land preservation easements. Purchasing development rights with public
funds is not the exclusive method of providing compensation, however, Other
jurisdictions have accomplished the desired objective by permitting the transfer of
development rights from burdened property to certain other properties in the political
subdivision, and have given value to this right by permitting a greater than normal

intensity of development of the transferee or ‘receiving’ property. (522 A 2d. 1328

(1987) at 1330)

The court held that the process was flawed in that it allowed increases in density (which
the court considered to be a zoning decision) by following planning procedures rather than the
state-mandated procedures for zoning decisions. Additionally, because the text of the zoning
ordinance had imposed no upper limit on the density in a receiving area, the density decision was
left to the planning process. The court noted that the county should have taken the additional step
and designated TDR receiving areas and allowable densities in the zoning ordinance itself and on

the zoning map (Siemon et al. 1996 p. 33).

Suitum v Tahoe Regional Planning Agency (1997)

The most recent case to contend with the TDR issue is Suitum v. Tahoe Regional
Planning Agency" (1997). Suitum owns land near the Nevada shore of Lake Tahoe, where the
Tahoe Regional Planning Agency regulates land use. In 1987, the Agency adopted a new
regional plan providing a parcel rating system that rated the suitability of vacant residential
parcels for development. Any parcel must obtain a minimum rating to qualify for development.
Any parcel in certain Stream Environment Zones (SEZ) receives a rating of zero and typically is
not permitted any additional land coverage. While the 1987 plan does not provide for variances

or exceptions, it does grant TDRs to affected property owners. There are three kinds of

Chapter 6

165
residential TDRs: a Residential Development Right, a Residential Allocation and Land Coverage

Rights. Both a Residential Development Right and a Residential Allocation are needed to place a
residential unit on a buildable parcel. All owners of vacant residential parcels that existed July
1,1987 including SEZ parcels automatically received one Residential Development Right.
Owners of SEZ properties may obtain bonus points equivalent to three additional Residential
Development Rights. SEZ property owners also receive Land Coverage Rights equal to one

percent of their land surface area. Additionally, SEZ may apply for a Residential Allocation.

Suitum has owned the property in question since 1972, but only applied to the agency for
permission to construct a house on her lot after obtaining a Residential Allocation. The Agency
determined that Suitum’s property, which lies in the SEZ, is ineligible for development but
entitled to received TDRs. Suitum sued, claiming the Agency’s determination amounted to a
regulatory taking of her property. Suitum claimed the Agency’s restrictions deprived her of ‘all
reasonable and economically viable use’ of her property. The Agency argued that Suitum’s case
was not ripe due to her “failure to obtain final decision by the Agency regarding the amount of
development allowed.” This case raises issues including the significance of the TDRs as they
relate to a takings claim and the constitutional requirement of just compensation. However, the
Supreme Court did not decide these matters; the court only addressed whether the claim was ripe
for adjudication even though Suitum had not attempted to sell the TDRs she had or is eligible to
receive. The District court decided that Suitum’s claim was not ripe for consideration because
there was no final decision on how Suitum could use her property. The Court of Appeals for the
Ninth Circuit affirmed the lower court’s ripeness ruling. The Supreme Court found the demand
for a final decision satisfied. There was no question how the restriction applied to Suitum’s land

and that the Agency had no discretionary power. Additionally, there was no question that Suitum

 

2' on writ of certiorari to the US. Court of Appeals of the Ninth Circuit ; No. 96-243, Decided May 27,
1997

Chapter 6

"rm“ 4...“ w.»

166
was entitled to TDRs. The Supreme Court stated that ‘the valuation of Suitum’s TDRs was

simply an issue of fact about possible market prices, and one on which the District Court had
considerable evidence’. The Supreme Court held that the claim was ripe and reversed the lower

court ruling.

Chapter Summary

While the legality of TDR as a growth management or land preservation technique has
not been established, the lessons learned from existing TDR programs, practitioners, theorists and
court cases suggests that TDR is legal, even absent enabling legislation. The main question is
whether it falls under the police power or eminent domain. Where TDR lies on this legal
continuum depends mainly on how the program is designed, implemented and administrated. To
better understand how these TDR program aspects address the legality of the concept an

examination of existing TDR programs through a case-study analysis will prove usefirl.

Chapter 6

TRANSFERABLE DEVELOPMENT RIGHTS AS A GROWTH MANAGEMENT
TECHNIQUE 1N LANDSCAPE MANAGEMENT: A CASE STUDY APPROACH

VOLUME 11
By

Patricia L. Machemer

A DISSERTATION

Submitted to
Michigan State University
in partial fulfillment of the requirements
for the degree of

DOCTOR OF PHILOSOPHY

Department of Resource Development

1998

Chapter 7

Exploratory Case Studies

Introduction

In this chapter four exploratory case studies are presented. Two levels of TDR
programming are represented with case studies at the township level (Buckingham Township,
Pennsylvania and Chesterfield Township, New Jersey) and at the county level (Calvert County,
Maryland and Thurston County, Washington). For each case, the setting, planning history,
program description and status is presented. In the “Summary of Exploratory Case Studies”
analysis of the cases will be presented thematically. The themes are background, participants,
sending side, receiving side, TDR allocation and general. Finally, from the overall lessons

learned a TDR Index was developed, and is presented.

Buckingham Township, Bucks County, Pennsylvania
Setting

Buckingham Township, located in rapidly growing Bucks County, is approximately
thirty-three square miles and is located nearly twenty-five miles north of Philadelphia. Since
1960, the township has been experiencing residential development pressure, trying to meet the
residential demand created by suburban jobs and close proximity to Philadelphia, Princeton, New
Jersey and New York City. Development within Buckingham Township is predominantly middle-
to upper-income. The population increased from 8,839 in 1980 to 9,364 in 1990, with a projected
population of 15,670 for the year 2020 (Brandywine Conservancy 1997 p. 13). The per-capita

income in 1985 was $15,492, which is approximately sixty-five percent increase from its 1979

167

168
value of $9,404. The number of housing units in 1990 was 3,283 with a median household

income in 1989 of $61,024 and a per-capita money income of $24,75 1.

Planning History

Buckingham Township planning has been characterized as innovative, using a variety of
planning and land use management techniques. This made it a prime candidate for initiating the
unfamiliar concept of TDR. Historically the Township had a strong agricultural base. In the
early 19703 the Planning Commission realized that the overall township zoning of one dwelling
unit per acre that was in place since the 19505 was no longer effective in dealing with urban
development. The 1974 Comprehensive Plan, with its primary goal of agricultural land
preservation, identified a Development District, in which development was to be encouraged, and
an agricultural and resource protection area, where development was to be discouraged. These

areas provided the basis for Receiving and sending Areas.

A citizens committee was established to investigate agricultural land preservation
techniques. While considering many techniques, they focused their efforts on a voluntary transfer
of development rights provision in a proposed zoning ordinance. The proposed ordinance had two
provisions that were eventually eliminated to ensure that the agricultural district was free of
development. The first provision allowed a farmer to split off one or two lots for single-family
residences. The second provision allowed the transfer of TDRs within the agricultural district.
Originally, these two provisions were considered by the committee to maximize the opportunities
for farmers to realize the development value of their land. By providing farmers with various
options to realize development value, the TDR program may have more easily gained agricultural

community support.

Chapter 7

169
The committee’s efforts, along with the overall Comprehensive Plan goal of agricultural

preservation resulted in the enactment of a Zoning Ordinance in 1975 that included TDR. This
zoning ordinance replaced the township wide one dwelling unit per acre zone with five districts
of varying densities, some of which were to be achieved through clustering and transfer of

development rights.

Program Description

The township’s 1975 Zoning Ordinance contained provisions for both a preservation
district and a deve10pment district. Development rights could be transferred from the
Agricultural District (AG) to land in all other zones, including industrial and commercial zones.
Unlike most municipal TDR programs, Buckingham Township’s program permitted the
transference of rights from residential to non-residential zones. The ordinance permitted the
complete severance of rights from the land, making it possible for a landowner to transfer TDRs

without full fee ownership of both preservation and development parcels.

A landowner in the AG district could develop at low densities, from one dwelling unit per
five acres to one dwelling unit per two acres depending on the type of development. However, if
the landowner develops the parcel at these densities, the development has to be concentrated on
either ten or twenty percent of the land depending on the housing type. As an alternative to
development, the landowner in the AG district can sell the development rights to a landowner in

the Development District.

Rights were allocated (1975) in the AG district on a gross acreage basis, one TDR per
acre. Given the conventional development densities at the time were .2-.5 dwelling units per
acre, it was thought that this TDR allocation rate would provide AG district landowners with an

incentive to sell TDRs. This incentive was tempered by balance between available TDRs and
Chapter 7

170
demand for TDRs. This is a critical point. The availability of TDRs far outweighed the demand

for TDRs, and thus the incentive was weakened. If the demand was high and the number of

available rights was low, the price commanded would have strengthened the incentive to sell

TDRs.

The size of the preservation district was set at 13,000 acres (1975). The number of units
that could be built in the Agricultural District was 3,341 and only 1,862 TDRs could have been
transferred if the township was developed fully. This meant that of the 13,000 TDRs assigned,
only 5,203 could have been utilized in either the AG district or the development district. This left
7,797 unusable TDRs, which depressed the TDR market price. At lower TDR prices, landowners

in the AG district had less incentive to sell TDRs and consequently more incentive to develop.

A review of the TDR program (1978), as required by the Zoning Ordinance, made
numerous recommendations. One recommendation was to increase the demand of TDRs.
Methods for achieving this included reductions in the by-right densities in the Development
District, increasing the size of the Development District, adding incentives in the industrial
district, and addressing sewer concerns in the Development District. Another recommendation
was to decrease the supply of TDRs. Methods for achieving this included reducing the number of
outstanding TDRs through rezoning, reassigning TDRs based on site-capacity calculations (which
raised legal concerns), and instituting a program for voluntary retirement of TDRs. Other
recommendations included revising public financial incentives and disincentives by guaranteeing
a ceiling on future taxes for those who sell TDRs, and considering an income tax to replace the
real-estate tax and exploring a bond issue or other finance methods for the purchase of
Development Rights (Coughlin 1981 p. 13-34). In 1978, the Zoning Ordinance was amended

resulting in the diminishment of the base density in the Development District by nearly 50

Chapter 7

171
percent, from 5,978 to 2,967, thereby providing greater incentive to build at ‘bonus’ densities,

which would require TDRs.

The transfer procedure first requires the original owner to submit a statement noting the
number of rights to be transferred from specified parcels. Also the owner must petition that the
parcels be reclassified from AG-Agricultural to AP-Agricultural Preserve. The sending-area
owner who is transferring the rights must provide a Declaration of Development Rights detailing
the conditions of land restriction and agreeing that the restrictions and conditions shall be a
covenant running with the land. The Township certifies that a given number of development
rights have been transferred from the specified parcels and (if applicable) assigned to the
specified parcels. The zoning ordinance and map are then amended to indicate the change in
classification of the specified parcels from Agricultural to Agricultural Preserve. Buckingham’s
TDR transfer process also requires publication of a legal notice in the newspaper describing the

amendment to the zoning ordinance. (Coughlin 1981 p. 13-34, 13-36).

The initial overriding objective of the TDR program was to preserve farmland. The
original TDR system allowed transfers of TDRs from all parcels ten acres or greater. When the
TDR program was revised in 1994 the preservation of additional natural resource values was
considered. Given the overall support of farmland preservation, the Township decided to base the

program on the preservation of that single resource (Brandywine Conservancy 1997 p. 15).

The TDR program was revised (1994) and specified that rights could be sent from any
twenty—five acre or greater parcel contained within the official Agricultural Security District
which is composed of actively farmed land. Most of the Agricultural Security District is
contained within agricultural zones. Under the current TDR system, rights may be transferred to

any parcel of twenty-five acres or more in any zoning district that allows residential development.

Chapter 7

 

172
The ‘receiving site’ is therefore any zoning district that permits residential development. Within

any receiving site there is no explicit “bonus”; instead, an additional dwelling unit can be built if

an additional TDR is acquired.

This program permits development rights to be transferred within the agricultural sending
area with use of clustering. By allowing such transfers, farmland is not preserved, but rather rural
character is target of preservation. The zoning of the agricultural area permits one dwelling unit
per five acres. Additionally, there is a clustering option that may result in density increases to
one dwelling per 2.5 acres or one unit per acre. Given these options, the program hardly
resembles an agricultural land preservation technique. Buckingham program administrators
recognize that allowing transfers within the farming area was a shortcoming of the TDR program

(Bowers 1996).

TDR allocation in the sending area is based on the “Base Site Area” acreage - the gross
acreage with all eased areas and legally constrained areas subtracted out. One acre of Base Site
Area within the sending area generates 0.85 development rights. Note that this represents a lower
allocation rate than the 1975 program that allocated one TDR per acre. In most instances, the
generated TDRs are greater than the allowable dwelling units when not using development rights.
For example, a one-hundred-acre tract under conventional development may yield fifty dwelling
units (i.e. one dwelling unit per two acres), whereas the same tract may generate close to eighty-
five TDRs. Because of the number of TDRs allocated exceed the number of dwelling units that
can be built, landowners in the sending area have an incentive to sell TDRs. Owners can afford
to sell rights at a lower price because they have more rights to sell, all else being equal, which
helps to support the TDR equation (Brandywine Conservancy 1997 p. 18). Program designers

hoped that by creating the incentive on the sending side, the lack of explicit density bonus

Chapter 7

173

provisions on the receiving side could in part be overcome, i.e. the program is sending-side

driven.

The theory is that compensation may be achieved not only through density bonus
provisions on the receiving area side (i.e. create a demand for TDRs) but also through adjusting
the sending area system so that sellers are able to sell rights at a lowered price (i.e. more rights).
The argument is that this will effectively adjust for the receiving area needs (Brandywine
Conservancy 1997 p. 19). This assumes that by having TDRs at the lower price this will create a
demand for TDRs in the receiving area. However, unless a developer can make more money by
building on receiver sites using TDRs than by building without TDRs no matter how low the

price, there is no market.

It has been argued that this type of sending-side incentive is needed in townships like
Buckingham, where a development right in a more dense TDR development is not worth as much
to a developer as an actual dwelling unit on a large lot. However, the incentive on the sending
side may not be strong enough to overcome the absence of a density bonus in the receiving area.
In such cases the TDR program will fail. For example, in housing markets dominated by demand
for single-family large-lot housing, the incentive from the sending side will not be strong enough
to create a TDR market for more dense development. In short, there is no incentive if owners
cannot sell the TDRs. The value of a development right subtracted from the profit value of a
developed site must be greater than the profit value of a site developed without using TDRs if the

TDR option is going to be used.

Given that the land cost is quite high in Buckingham Township, as land costs rise so too
will the price of TDRs. This assumes there is a market for more dense developments. A

development right allowing a residence on a somewhat smaller and denser lot is not as valuable

Chapter 7

174

as the larger lot, although the difference may not be great if the same size and type of housing
unit is constructed. For example a 4,000 sq. ft. house on an acre lot is not worth as much as the
same house on a two acre lot. However, the difference may not be that great. As lot size varies
even more with resultant downward adjustments in size of house and even type of house, the
discrepancy between the value of the development right in contrast to a conventional residential

lot grows larger (Brandywine Conservancy 1997 p. 26).

The zoning ordinance allows for development rights to be transferred into the AG-l, AG-
2 and R-ldistricts in the following manner. Within the AG-l District the conventional
development allows for 1.8 acre lots and there is a cluster provision. The AG-l District with
TDRs has the following provisions: minimum site area of twenty-five acres, fifty percent open
space requirement, minimum average lot area of 12,500 sq. ft and a minimum lot area of 10,000
sq. ft, and the maximum dwelling units allowed is equal to the maximum cluster option under
conventional subdivision times two. In short, with TDRs the lot’s size requirement is reduced

and densities can be doubled.

Within the AG-2 District the conventional development allows up to five dwelling units
per acre on sites of five acres or more. The AG-2 District with TDRs is similar to the AG-l
District with TDRs but also includes a planned business and residential district where maximum

density may be increased up to fifteen dwelling units per acre.

Within the R—l District the conventional development has a one-acre lot minimum. In the
R—l District with TDRs, the maximum density is determined by calculating the conventional
(base) density under R-1 and then increasing this by twenty-five percent and if a clustering option
is used in addition to TDRs, the density can be increased by forty percent. Additionally, in the R-

1 with TDRs, the minimum lot size is 30,000 sq. ft.
Chapter 7

175

On a one hundred acre parcel, given that conventional zoning specifies a minimum lot
size is 1.8 acres and TDRs are allowed at .85 rights per acre, a landowner has significantly more
TDRs than developable units under conventional development. Developers anticipate TDR
prices between $6,500 and $10,000. Buckingham Township officials indicate an average TDR
price is approximately $8,000 (Brandywine 1997). Clearly the opportunity to build additional
units through purchase of development rights for $8,000 is perceived to be more profitable than
conventional development (Brandywine Conservancy 1997 p. 27). However, it is only profitable
if there is a market for the increased density. This is not evident. It depends on what price the
market commands for large lot housing compared to smaller lots. The Brandywine Conservancy
reported that given the up-scale nature of the Buckingham residential market combined with the
substantial development pressures with the high cost of land, TDRs would be desired. It can be
argued that it was precisely the dominance of the upscale housing market that resulted in TDR
failure. If you can gain the opportunity to build an extra residence as the result of TDR purchase
at a cost of $8,000 when land costs under conventional development might be considerably more,
then a developer will opt for TDR and be able to maximize total profit by building more houses at
a lesser price per house (Brandywine Conservancy 1997 p. 27). If developers can buy land for
$7,000 and build a unit then they will not opt for TDR. In reality, if the developer is going to go
from one house per acre to ne house per 30,000 sq.fi. in order to develop two houses he/she
would need one TDR and a total of 60,000 sq. ft. of land, i.e. 1.5 acres. Therefore the cost of an
additional half acre should be less than $8,000 in order for the developer to opt for TDR This is
given that there is a market for 30,000 sq. ft lots with a house. It will be worth less than the same
house on 43,560 sq. it, but perhaps not a great deal less. Although expensive land makes it
advantageous to build on smaller lots, the lots can only be slightly smaller in order to provide

housing for the same housing market.

Chapter 7

176

This system may work for single-family homes on relatively larger lots given a typical
$15,000 per acre cost of raw land. However, it may not work for townhomes because the average
cost of a development right of $8,000 would be excessive (Brandywine Conservancy 1997). The
increase in numbers of additional (bonus) dwelling units should be reasonable because developers

have to be able to afford the TDRs in order to achieve the bonus.

Status

Although Buckingham Township has had a form of TDR programming since 1975,
limited transfer activity has taken place. Between 1975 and 1981, of the 258 dwelling units built
in the Development District only nineteen involved TDR transfers. Only between thirty and forty
development rights were transferred over a nearly twenty year period, and these transfers required
tremendous efl’ort from township officials (Brandywine Conservancy 1997 p. 20). In 1994, the

township revised its TDR program.

As of spring 1997, I65 development rights have been transferred from a 120 acre tract
and a sixty-four acre tract. In total, nearly 300 development rights have been engaged in the
transfer process, while all submitted subdivision plans since 1994 have included the use of TDRs.
In Buckingham Township, despite the program's allowance of transfers of rights to any zoning
district, all TDR development projects involve single-family developments with modest density
increases. The result is 554 acres of farmland protection (Brandywine Conservancy 1997).

These indicators suggest that Buckingham’s TDR program is the most successful municipal

program in Pennsylvania (Brandywine Conservancy 1997 p. 13).

Chapter 7

177
Calvert County, Maryland

Setting

Located in southern Maryland, Calvert County is a peninsula, bounded by the
Chesapeake Bay on the east and the Patuxet River on the west. Its steep cliffs and woods
characterize the bay side, while the west side is characterized by rolling fields. The county covers
219 square miles, reaching nine miles in width and stretching thirty-five miles north to south.
Despite being only forty-six miles from Washington DC, it has one of the lowest costs of livings
in the metropolitan DC area. This accounts for its status as one of the fastest growth counties in
the State of Maryland. Calvert County’s 1990 census statistics recorded a total population of 51,
372, of which 45,949 (nearly ninety percent) were rural. Its 1995 population rose to 63,920,
representing a five-year growth rate of approximately twenty-four percent. The per-capita
income went from $9,198 in 1970, to $13,032 in 1980, to $17,807 in 1990, and down to $17,032
in 1995. The number of housing units in 1990 was 18,974, of which only 2,506 were connected
to public sewer. Housing units authorized for construction from 1990-1996 numbered 6,554. Of
those authorized, 5,835 were single-family units, indicating a strong and dominant single-family

housing market (1990 Census, Maryland Office of Planning 1996).

Planning History

Calvert County, located on the western shore of the Chesapeake Bay, has experienced
extreme growth pressure. The county’s 1974 Comprehensive Plan expressed a need to strengthen
its famrland preservation efforts. The combination of the pressure and desire to save farmland
resulted in the establishment of a committee assigned to investigate alternatives. Their
investigation culminated in a vote authorizing the pursuit of TDR programming. In 1977 the

county initiated one of the first TDR programs for the preservation of agricultural lands.

Chapter 7

l 7 8
Program Description

The original goal was to preserve 20,000 acres of prime farm and forest lands. Initially
the county did not designate sending or receiving areas; rather, sites were selected on a case by
case basis. TDRs were allocated on a gross acreage basis. Interested sending landowners
received one TDR per acre; interested receiving landowners acquired the right to build an
additional dwelling unit for every five development rights purchased. While the county had
mandatory clustering, the TDR program was strictly voluntary on both the sending and receiving
sides, i.e. there was no downzoning in either the sending or receiving area. For this reason the
program has seen very few opponents (Bowen 1997). This approach made the initiation and
implementation of the TDR program less controversial. If landowners had issue with the
program they simply did not have to participate. The Calvert County TDR program
administrator, Greg Bowen, believes that downzoning is not an appropriate option in rural
counties. Rather he believes that downzoning is best implemented in urban counties where the

farming community, those who would be opposed to downzoning, is in the minority.

The first TDR transfer did not occur until 1979, and this involved only a single property.
The next TDR sale came three years later in 1982. The TDR market in the eighties mirrored the
soft housing market. TDR transfers slowly built up and when the housing market picked up in
the middle to late 19805, TDR transfers became more common. In the late 1980s and early 19903

TDR sales were gaining strength.

While there was minimal opposition with the original program, the opposition that did
exist was derived from the piecemeal approach toward receiving-area identification. This
approach began with developers proposing receiving zones in any area of the county outside the
areas reserved for agriculture. A public hearing on the proposed receiving area was then held.

Developers contemplating TDR use in a project may consider a public hearing an additional
Chapter 7

179
obstacle, thus discouraging participation. In order for TDR to be successful, developers have to

be encouraged to use TDRs, not discouraged. A developer in Calvert County reiterated the
statements of TDR program planners, that the designation of receiving areas in one of the most
difficult elements in implementing a TDR program (American Farmland Trust 1997 p. 16). Once

receiving areas were established in the 1993 Comprehensive Plan the opposition was eliminated.

In 1993, the county made a commitment to preserve 36,000 of the remaining 45,000
acres of farm and forest lands (Daniels and Bowers 1997 p. 179). To address this commitment
the county designated a 55,000 acre sending area and a 17,000 acre “rural community” receiving
area and established a fund to purchase TDRs. Calvert County’s rural district contains all sending
area parcels. Within the sending area, landowners retained the TDR allocation rate of one per
acre and the right to sell these development rights. The sending landowners can opt to develop the
property using a clustering option resulting in housing development on twenty percent of the site
rather than transfer development rights. By offering sending landowners an alternative to

participation in the TDR program, the county once again avoided controversy.

In 1997, over fifty percent of county land is not in either sending or receiving areas.
There are 50,000 acres in the sending area and 17,000 acres in receiving areas, making it
favorable to sending area owners. Given that nearly seventy-five percent of the land associated

with the TDR program is in the sending area, a favorable TDR market is encouraged.

Farmers have varying reasons for selling TDRs; there is not a ‘typical’ farmer who is
more likely to enter the TDR sellers market. For example, one farmer needed capital to convert
his farm operation to a trucking operation. Another wanted to sell TDRs to expand his farming
operation, while yet another wanted to sell the land without any development potential and retain

the TDRs. In one instance one heir used TDRs to acquire capital to buy the land from the
Chapter 7

180

remaining heirs. Bowen believes that overall participants in the TDR program are involved for

reasons other than economic.

While economics may not have been the driving mechanism in agricultural landowners’
decisions to participate in the TDR program, economics were considered. A common concern
within the farming community is that lending institutions would be less inclined to lend money to
participating farms. Ofien farmers state reluctance to participate due to the premise that “their
equity is their land.” Initially in Calvert County, there was some degree of uncertainty in value
from an agricultural land perspective. This uncertainty no longer exists. There is no lender

uncertainty; if the county approves, the lenders perceive no problem.

In order to sell TDRs, a landowner must be in an agricultural district and the rights must
be certified by the county commission. While most TDR programs require that an agricultural
conservation easement be recorded on land after TDRs are transferred, in Calvert County the sale
of one development right requires a landowner to record an easement on the entire parcel. This
requirement is designed to prevent fragmentation of the land into parcels that are too small to
farm (American Farmland Trust 1997 p.16). It also prevents the spatial dilemma of deciding

where the easement physically exists on the parcel.

Both the sending and receiving areas are zoned for one dwelling unit per five acres.
However, in the receiving areas, developers are permitted increased density, i.e. bonus density,
with the purchase of TDRs. By permitting one dwelling unit per five acres as a right within the
sending area, the incentive to sell TDRs is made less attractive. Additionally, this zoning does
not slow development within the sending area, nor does it encourage the preservation of blocks of
agricultural land. The county has recently been working to lower the density in the sending area

to one dwelling unit per twenty or twenty-five acres (Daniels and Bowers 1997 p. 179). The
Chapter 7

l8 1
Comprehensive Plan adopted in December 1997 advises the county to reduce its build out

potential. One way of achieving this would be to downzone. The county is currently revising its
zoning plan, which should be completed in October of 1998. Landowners are entitled to reserve
one house lot per twenty-five acres, to a maximum of three. For each lot used, farmers must
subtract five development rights (one d.u. equals five TDRs or five acres) from their total

entitlement (American Farmland Trust 1997 p. 16).

With the purchase of TDRs, increased density at a rate of one additional dwelling unit per
five TDRs is permitted within the receiving area. Within the receiving area, development must be
clustered onto fifty percent of the site. Depending on the receiving area, a developer can go from
one house per five acres to ten houses per acre with the acquisition of TDRs. The sending area is
approximately 20,000 acres and the receiving area is approximately 17,000 acres with an average
density of one house per four acres, yielding roughly 4,250 units throughout the receiving area at
base densities. However, with TDRs the number of dwelling units anticipated in the receiving
area can nearly double, i.e. increase by approximately 4,000 units. This would require the
acquisition of 20,000 TDRs, thus the ratio of receiving opportunities to sending opportunities is
close to one to one. Although the theoretical literature supports a two to one ratio, in reality it is
very difficult to get beyond one to one. Calvert County could not find more receiving areas. The
county did not want to risk spreading the development area; rather they concentrated on locating
receiving areas in infill development areas. Spreading the receiving area increases the potential
for controversy. By locating receiving areas in infill locations NIMBYism will be reduced. They
are now looking at a concentric ring concept to target receiving areas. They did not originally do

this for fear that the TDR concept would have failed before it ever took off (Bowen 1997).

Calvert County has no public TDR bank, only a PDR bank. In 1993, the county

established a Purchase and Retirement (PAR) fund to acquire TDRs. If the PAR Fund acquires
Chapter 7

182
rights they are then extinguished (AFT 1997 p.17). For this reason, the Calvert County bank is in

practice a PDR bank. While the county has the legal authority to sell TDRs, it has not, mame
because the county does not want to be in the business of competing with farmers to sell TDRs
(Bowen 1997). The avoidance of this situation was also apparent in the Pinelands, which has the

ability to sell TDRs, but does not.

In part due to Calvert County’s development activity, farmers have not been participating
in the state purchase easement program. There were no applications to sell easements to the state
between 1986 and 1993. However, the county PAR fund offers greater flexibility by allowing
farmers to sell some of their development rights and retain others for future security (Bowers
1995). The purpose of the PAR fund is to assist in sustaining development right market activity,
especially at times when the private market is inactive. Additionally, the PAR fund assists in
setting TDR price. Only farmland or forested landowners in agricultural preservation districts are
eligible to sell development rights. A minimum of fifty acres of farmland or forest land is needed
to create an agricultural preservation district. Formation of a district makes the landowners
within eligible to sell development rights, to either the county PAR fund, the state farmland
preservation program, or to developers (Bowers 1995). Farmers may apply to sell up to ten
development rights per year to the PAR fund. Calvert County uses land use, location, size and
soils as criteria for deciding what lands to purchase using PAR firnds. In 1994, using the PAR
fund the County purchased 204 TDRs at an average price of $2,350 (Daniels and Bowers 1997 p.
180). Enrollment in an agricultural district prevents landowners from developing their property
for a five-year period. The creation of preservation districts helps stabilize land use in the
sending areas by protecting farmers from development on adjacent lands. This is particularly
important to those farmers who have sold their development potential. Additionally, farmers

within the district receive a property tax credit that may help defray farming expenses. This is

Chapter 7

183
particularly important in areas where development pressure is high. In 1997, 16,000 acres were

enrolled in preservation districts (Daniels and Bowers 1997, p.180).

Status

The TDR program has had a remarkable effect on residential rezonings, Calvert County
has not approved any rezoning to residential use since 1978 (Bowen 1997). In actuality, the lack
of rezoning has strengthened the TDR program, assuring property owners that the only way to
increase density is through TDRs. Because the county has held a line on rezoning, the TDR

program has gained credibility as an effective means of achieving increased density.

The original goal was to preserve 20,000 acres of prime farm and forest land. The first
development right was transferred in 1979 and the next TDRs were transferred in 1982. The
average price was $1,200 per right between 1980 and 1983, making the cost to developers for an
additional dwelling unit in a receiving area to be $6,000. In 1994, 447 development rights were
transferred, with an average TDR price of $2,305 per right (Bowers 1995). This translates into an
average cost to developers in the receiving area of over $11,500 for an additional dwelling unit.
In 1996, the Calvert County TDR program had witnessed 400 transfers by July at an estimated
cost of eight million dollars to preserve between 6,000 and 7,700 acres (7,700 in American
Farmland Trust 1997, 6,000 in Daniels and Bowers 1997). In 1997, 812 TDRs were transferred,
most of which were sold at two opportune times when subdivisions could be approved because
there were adequate facilities, and right before a school reached its maximum capacity. Since the
program’s conception, between 5,000 and 8,000 TDRs have been transferred contributing to the
permanent preservation of over 12,500 acres. The ambiguity in the exact number of TDRs is due
to the presence of other preservation programs that use development rights sales. Not all 12,500
acres were preserved through TDR programming alone; the state’s easement purchase program

and the county’s PDR program have also made complementary contributions.

Chapter 7

184
Chesterfield Township, Burlington County, New Jersey

Setting

Chesterfield Township is located in the northern part of the central New Jersey County of
Burlington. Chesterfield Township is a rural community, approximately ten miles southeast of
New Jersey’s capital, Trenton New Jersey. The township covers nearly twenty-two square miles.
In 1989 seventy-five percent of the township was agricultural. By 1997, only forty-five percent of
the township (6,354 acres) remained agricultural (Chesterfield 1997 Master Plan). In 1992
approximately seventy percent (9,570) of the township’s 13,672 acres was under farmland
assessment (Gottsegen 1992). In 1980 the township’s population was 3,867, in 1990 it was 5,152
and in 1994 it was 5,257. This translates into a 33.2% population increase (or a 2.91% annual
grth rate) over a ten-year period, and then a 2.0% population increase (or a 0.18% annual
growth rate) over a four year period. In 1990, the urban population numbered 2,530 and the rural
population was nearly equal at 2,622. The median family income for the township was $56,720
in 1989 and the per capita income was $14,731. In 1990, the total number of housing units was

973, approximately ninety-four percent (910) of which were in rural areas.

Planning History

The Chesterfield Township case illustrates how a small rural community has struggled
with the issues involved in guiding growth in a manner equitable to all of its residents (Gottsegen
1992 p. 139). The prevailing perception over the past thirty years is that farmland is an interim
use of land, and eventually it will be developed (Chesterfield 1997 Master Plan). Given its
diverse agricultural industry, the Township’s planning tradition has included a farmland
preservation component. With its history of farmland preservation activity, it was the first
community in Burlington County to pursue TDR programming as a technique for furthering its

agricultural preservation efforts. Chesterfield’s zoning ordinance permitted cluster development

Chapter 7

185
and the voluntary transfer of development potential between non-contiguous parcels to protect

prime farmland since the early 1970s. Additionally, since 1975 the Master Plan has included an
objective to strengthen the agricultural industry and to protect the community’s mral character.
Despite these efforts, the township’s Planning Board realized that its fannland preservation and
growth management techniques were not effectively preventing growth from occurring in the
agricultural areas (Gottsegen 1992 p. 140). The Board recognized that the township could not
rely on the state’s easement purchase program. Other important points the Board had to consider
included that much of the township’s agricultural land was farmed by its owner, the township’s
strong rural character and the presence of land speculation. For these reasons, the township
sought a more comprehensive approach for achieving long-term agricultural preservation

(Gottsegen 1992 p. 140).

Program Description

Chesterfield developed the state of New Jersey’s first municipal program to utilize the
TDR concept. In 1975 the township initiated a transfer of development credits (TDC) program
that was originally promoted by the farmers. TDC programs are a modified TDR system; in
effect they are voluntary TDR programs. The TDC program provides the option of transferring
development between two properties, whereas TDR programs require the transfer of development
rights for development above low base densities. Under the TDC program, the developer had to
own both tracts, the sending and receiving areas, at the time of the development right transfer.
However, as long as the developer owned both areas at the time of TDR transfer, he/she could
contingently and simultaneously sell the residual rights of the preserved parcel (Coughlin 1981 p.

13-45).

There were several major reasons why the township pursued a TDC program. First, the

TDR concept was unfamiliar. Second, the township feared that if the program failed it would
Chapter 7

186
lose opportunities to realize appreciation value. Third, because the agricultural preservation

technique originated with the farming community, the township was opposed to a preservation
area that permitted no development. Instead, the TDC program entailed credits that could be
applied to any parcel. The only restriction was that density could not exceed four dwelling units
per acre. Fourth, the township feared that a TDR ordinance would not be defensible on
constitutional grounds without state enabling legislation. The final major reason was that there

were concerns about the tax status of development rights (Coughlin 1981 p. 13-45).

Under Chesterfield’s TDC program, a ZOO-acre area located in the northwest part of the
township was permitted to receive development potential from the remainder of the township.
Another 275 acres were designated as an “additional receiving district” if the original receiving
area proved to be inadequate to receive TDCs. The base zoning throughout the Township was
one dwelling unit per acre with a twenty percent bonus density if the units were transferred, i.e.
1.2 dwelling units/acre with TDC. However, one dwelling unit per acre did not slow sprawl, nor
did the twenty percent ‘bonus’ prove effective in guiding growth. In 1985, the township revised
its zoning ordinance, changing the base density to 0.3 dwelling units per acre (one dwelling unit/
3.3 acres), with a sixty-six percent bonus density if units were transferred to the TDC receiving
district and a maximum gross density of eight dwelling units per acre if sewer and water were

provided (Gottsegen 1992 p. 140).

In 1987, the Chesterfield Planning Board revised the township’s master plan and
recommended zoning changes. The adopted zoning ordinance allowed three development
options. One option was to utilize the voluntary TDC provision allowing landowners to transfer
density to the northwestern corner of the township. Conventional zoning was the second option,
at one dwelling unit per 3.3 acres. The final option offered a minor density bonus if development

was clustered on one acre lots and a fifteen year municipal deed restriction was placed on the

Chapter 7

187
remainder of the property. Unfortunately, these provisions did little to save farmland or maintain

the rural character of the Chesterfield community; in fact the cluster provision actually

encouraged roadfront development throughout the township (Gottsegen 1992 p.141).

At the same time that these development options were being offered, opportunities for
landowners to participate in state, county and local easement purchase (PDR) programs existed.
This allowed the township’s TDC program to work in coordination with the state and local PDR
programs. The commitment of the county, as exemplified through the Burlington County
Agricultural Development Board (CADB) efforts to secure applications for submission to the
state PDR program, and the municipality, as exemplified through voters approving a bond
referendum for at least $1.0 million in local funds, indicate a coordinated effort between PDR
programs for the permanent preservation of farmland. By June 1990, 3,148 acres were preserved
in Chesterfield Township with state, county and municipal farmland preservation funds. This
acreage comprised nearly thirty percent of the township’s land under farmland assessment

(Gottsegen 1992 p.142).

While Chesterfield has seen farmland preservation success using the easement purchase
program, townships offlcials realized that the existing zoning ordinance that permitted one
dwelling unit per 3.3 acres was contrary to farmland preservation. The three development options
ofi‘ered by the township were ineffective in preserving viable tracts of farmland or preventing
development on farms with excellent soils. The township, witnessing farmland loss at an
alarming rate, realized that stronger measures were needed to achieve its longstanding goals of

farmland preservation and protection of the community’s rural character (Gottsegen 1992 p.142).

Not only were PDR efforts not enough to combat the negative effects of the three

development options, the PDR efforts actually encouraged development on parcels adjacent to
Chapter 7

188
preserved lands. In 1989 there were several large development proposals adjacent to land

targeted for permanent preservation under easement purchase programs. Developers sought to
capitalize on the presence of preserved agricultural lands by locating new housing developments
to take advantage of the scenic view of protected farmland. In effect, the mechanisms designed to
preserve Chesterfield’s farmland were actually increasing the likelihood that land directly
adjacent to the preserved farmland would be developed (Gottsegen 1992 p.142). In response, the
CADB discouraged all non-agricultural development within an “agricultural preservation” target
area and provided Chesterfield Township with the initial impetus for TDR programming to guide
development to appropriate growth areas while mitigating the impact of preservation on

agricultural landowners.

Burlington County played a key role in the design and implementation of the Chesterfield
Township TDR program. The CADB recommended the division of three townships, including
Chesterfield, into growth and preservation areas and strongly encouraged TDR use as a means to
preserve the “agricultural preservation area” and channel new development into the “grth
area”. The county thus laid the structural foundations for the TDR program. The Board
requested that the townships forward all new development proposals in the “preservation area” to
the CADB for review and comment. The CADB informed the municipalities that its future
efforts would be directed toward those communities that incorporated these recommendations

into their master plans and zoning ordinances (Gottsegen 1992 p.142).

Also in 1989, the Chesterfield Township Planning Board proposed that virtually the
entire township be downzoned to one dwelling unit per twenty acres. Although many landowners
acknowledged that the existing zoning ordinance did not adequately protect farmland, their
objections focused on the potential loss in equity for farmland owners under the proposed

ordinance (Gottsegen 1992 p.143). This indicated that compensation or mitigation for lost equity
Chapter 7

189

was an important issue within agricultural preservation. While this twenty acre zoning ordinance
was never adopted, the discussions of landowner equity, farmland preservation and growth

management led the township to become increasingly more interested in TDR.

Once the October 1989 draft was made public, a citizens group, mostly composed of farmer-
landowners and landowners within or adjacent to the receiving area, expressed their opposition.
They emphasized the perceived negative impacts of the TDR program on property values of
sending-area landowners and on community character of owners and residents living in or nearby
the proposed main receiving area. This citizens group made several requests that eventually

added structure and detail to the TDR master plan. These requests included:

0 Reduce the total amount of dwelling units planned for the receiving area

0 Permanently retire the development potential acquired in Chesterfield under the state
easement purchase program instead of ‘reactivating’ it as TDR credits

0 Complete a sewer and related infrastructure study to inform the township’s residents of
the potential tax burden under TDR

0 Establish the value of TDR credits

0 Prepare a design plan for the TDR receiving areas to ensure that adequate developable
land existed to receive the proposed number of TDR credits

Chesterfield Township utilized a steering committee in its TDR program implementation
process. This committee was comprised of individuals with varying areas of expertise in growth
management issues: planners, architects, developers, farmers, land use attorneys and government
officials. The committee served as a reviewer of the initial design standards for the TDR
receiving area, TDR allocation methods for the sending area, and the proposed structuring of the
credit transfer process, i.e. the committee oversaw the development of the main TDR program

elements.

Chapter 7

190

To determine an allocation method, Chesterfield estimated the amount of existing and
future development potential based on available land and environmental constraints. The
Planning Board considered several methods for TDR allocation from 1989 through the adopted
1997 Master Plan. In 1989, the Planning Board decided to distribute TDR credits based on each
property’s soil characteristics as opposed to gross acreage. This allocation method was viewed by
most landowners as fair and equitable. Credits were to be allocated according to the then US,
Soil Conservation Service’s soil suitability ratings of “severe,” “moderate” and “slight”
limitations for septic systems. One TDR credit per 3.3 acres of slight soils, one TDR credit per
six acres of moderate soils and one TDR credit per fifty acres of severe soils. The 1989 draft
Master Plan identified and recommended gross densities for the proposed TDR sending areas at
one dwelling unit per fifty acres. Under this draft Plan, TDRs were to be allocated to all
landowners at a rate of one TDR credit per 3.3 acres of “developable” land. Developable lands
were those that were not wetlands, not within floodplain or not having bad soils with better than
severe septic suitability. It was estimated that 2,536 TDR credits would be allocated to sending-
area landowners and that approximately 2,900 new dwelling units could be constructed under the
TDR program. While this is slightly better than a one to one receiving to sending opportunity
ratio, it is far from the two to one ratio recommended in the theoretical literature to create a viable

TDR market.

In 1990, the Planning Board changed the TDR allocation ratios to reflect depth to
seasonal high water table (DSHWT) rather than the septic suitability rating. The board felt that
depth to seasonal high water table more accurately reflected a property’s development potential.
This indicated the importance placed on development value and its compensation. Furthermore, it
felt that soil limitations influencing septic suitability could be overcome with waste water

treatment technology. The revised TDR credit ratios were as follows: one TDR credit per 2.7
Chapter 7

191
acres of soils with DSHWT > five feet; one TDR credit per six acres of soils with DSHWT three

to five feet; and one TDR credit per fifty acres of soils with DSHWT up to three feet, soils with

greater than ten percent slope or soils classified as alluvial.

The allocation method, adopted under the 1997 master plan, is based on soil conditions
and prior zoning. One credit per 2.7 acres is proposed on good soils, i.e. rated ‘slight’ constraint
to development, depth to seasonal high water table >five where on lot wells and septics can be
approved. On poorer soils, fewer dwelling units are proposed. One credit per six acres is
recommended in the soil conditions rated ‘moderate’ constraint to development (depth to seasonal
high water table at 3-5 feet). One credit per fifty acres in the soils rated ‘severe’ constraint to

development where no development could otherwise be located (wetlands and floodplains).

In September 1989, the Burlington County Board of Chosen Freeholders created the
Burlington County Transfer of Development Credit Bank to support municipal efforts to preserve
open space and protect the interest of landowners impacted by such programs. The bank was
designed to integrate TDR programs with the County’s easement purchase efforts in order to
maximize limited bond monies for farmland preservation. As of June 1992, the Burlington
County F reeholders had committed $10 million dollars (acquired state funds) to the TDR bank to
purchase development rights through local TDR programs and the State’s easement purchase
program. In November 1992, Burlington County voters approved an additional $5 million for the
county TDR bank (Gottsegen 1992 p. 146). In November of 1996, the voters of Burlington
County approved a fifteen-year tax for the purpose of farmland and open space preservation.
That tax revenue will be used for both PDR and TDR purchases. To date a total of twenty million
dollars for the purpose of farmland preservation has been collected; these funds have not been
used. Three townships, Lumberton, Springfield and Chesterfield, are the most likely recipients,

given that Lumberton has passed a TDR ordinance and the later two have adopted master plans
Chapter 7

192
that include a TDR component (both are currently working on their TDR ordinances).

Lumberton has not requested any funds due to the strength of its private market. Burlington
County anticipates that once Chesterfield and Springfield approve their TDR ordinances these

townships will be actively pursuing county funds for TDR purchases.

During the TDR discussions in 1990, the Burlington County Board of Chosen
F reeholders funded an economic analysis to estimate TDR credit value based on local costs,
1988-89 housing market values and densities under Chesterfield’s proposed TDR program. TDR
credit value was estimated by determining the difference between the net revenues and costs of
residential development for a range of densities. In other words, the value of a TDR credit was
determined as the developer’s increased net profit from being able to sell an additional unit
(Gottsegen 1992 p. 149). To determine net profit, the costs of constructing the extra unit and the

general decreased value of homes as density increases are subtracted from the total profit.

The analysis estimated the TDR credit value over a range of densities using a multiple
linear regression model that used Chesterfield building, land costs and recent residential sales
data. It determined a value of $56,000 for each TDR credit and discounted it by fifty percent to
reflect uncertainty (Gottsegen 1992 p. 149). “Their analysis found that the value of a TDR credit
changed as density changed, ranging from $23,635 to $28,393, increasing at first to reflect high
construction savings, but then decreasing once reduced home values offset any gains in
construction economies of scale. Although the value of a credit was always positive between 0.1
and twenty units per acre, i.e. the developer always made money increasing density, it was worth
the most ($28,393) when it was used to increase density from one unit per acre to two units per

acre.” (Gottsegen 1992 p.149)

Chapter 7

193

In the spring and summer of 1990, realizing that receiving area designation is a critical
component to TDR programming, Chesterfield Township commissioned a Receiving Area
Design Study. A positive perception of the receiving area, through design and location, is critical
to gaining public acceptance of the TDR program and creating a viable market for TDR credits.
The Receiving Area Design Study investigated whether enough developable land existed in the

proposed receiving area to accommodate the estimated number of TDR credits.

The receiving area is intended as a new ‘center’ designed to accommodate firture
development. It is located in the northwest comer of the township and contains sufficient land to
accommodate the sending area development potential. The area is also designated as a sewer-
service area and is relatively self-contained. The new ‘receiving’ area meets the criteria for a new
village as defined by the State Development and Redevelopment Plan (SDRP):

1. “It is planned to function primarily as a compact, mixed-residential community with

a core of mixed uses offering employment, basic personal and shopping services and
community activities for residents of the Village and its Environs; and

2. It meets all the Policy Objectives of the Planning Area within which it is located;

3. It is identified as a result of a municipal planning effort conducted with the
participation of the county; and

4. It is identified in municipal and county master plans; and

5. It is located on an arterial highway on which the additional traffic load will not
exceed New Jersey DOT level-of—service standards, or will be accessible by other
modes of transportation and it will be served by a secondary street system; and

6. It is an area capable of being served by a community wastewater treatment system
using existing technology to meet applicable standards; and

7. It has an expected population and employment corresponding to existing Villages in
the area.”

In the 1997 TDR master plan the sending area is 5,511 acres. The number of TDR

credits was 1,710, of which 323 were retired and 167 were to stay in the sending area, yielding
Chapter 7

194
1,220 credits available. The plan estimated the dwelling units in the receiving areas under a

“reasonable assumed mix,” meaning that eighty-seven percent of the credits would be used for
residential development, thirteen percent would be used for non-residential development and that
developers would take advantage of a ten percent bonus density for constructing affordable
housing units (Gottsegen 1992 p. 156). Under this reasonable assumed mix, 935 single family
units, 268 triplexes/duplexes and 134 apartments/carriage house units were estimated, yielding a
total of 1,337 units. The proposed gross density (dwelling units/acre) in the sending area is one
dwelling unit per thirty-three acres. This density represents a substantial downzoning from the
current one dwelling unit per 3.3 acres in the rural area. Base and bonus densities in the receiving
area will be defined in the TDR ordinance that is currently being drafted. It is to be completed by
summer 1998. According to the master plan, the receiving area should be designed to
accommodate 1,220 credits, implying they will have a one to one receiving to sending

opportunity ratio.

The regulatory atmosphere in Chesterfield covers several levels - municipal, county and
state. The State Planning Commission, established under New Jersey’s 1986 State Planning Act,
prepared the State Development and Redevelopment Plan. This plan supports TDR
programming; it recommends the use of TDR along with other “creative land use tools” as a
means of accomplishing its goal of guiding growth to areas with available infrastructure so that
large amounts of agricultural or environmentally sensitive land may be protected. Furthermore,
the State Planning Commission developed a Report on Implementation Issues that outlines
potential roles, actions and procedures for implementing the state plan. The Report contained the
following recommendations regarding TDR consideration by counties and municipalities

(Gottsegen 1992 p.125, 126):

Chapter 7

 

 

195

o TDR programs should be developed on the basis of market analysis to ensure that such
programs are economically feasible and that receiving areas have adequate infrastructure
capacities

0 Allow for intennunicipal and intercounty TDR programs.

0 Allow for the use of a State TDR “clearinghouse” to facilitate transfers, to allow
economies of scale in administration, “one—stop” selling and purchasing, coordinating
“market-making” and the establishment of administrative expertise and accountability.

- Establish a statewide guarantee of a minimum redemption value for development rights.
0 Promote the establishment of Centers identified in the State Plan as “receiving areas”

0 Encourage the designation of “sending” areas as the “environs”, including farmlands,
environmentally sensitive lands, historic, cultural and scenic areas, critical environmental
sites, critical slopes and wetlands, certain developed communities and properties with
Transportation Development Districts.

0 As a second priority as “sending” areas, parcels within Centers should be allowed to
transfer among themselves to increase densities on appropriate parcels in the Centers.

Regulatory authority for the Chesterfield TDR program is also found within two
legislative acts, the Burlington County TDR Demonstration Act and the 1996 amendments to the
Municipal Land Use Law. The Act gives the Office of State Planning a role in the approval of
local TDR programs in the event a municipal TDR program is not approved by the County

Planning Board. The Demonstration Act provides that:

If the objections of the county planning board cannot be resolved to the
satisfaction of both the municipality and the county planning board within an
additional 30 days, the municipality shall petition the Office of State Planning to
render a final determination. . .. The Office of State Planning shall review the
record of comment of the county planning board, and the development transfer
ordinance and supporting documentation, and within 60 days approve, approve
with conditions, or disapprove the ...ordinance stating in writing the reasons
therefor. Failure of the Office of State Planning to [act on the] . . . ordinance
within the 60 day period constitutes approval of the ordinance. The basis for
review by the Office of State Planning shall be: 1) compliance of the...ordinance
with the provisions of this act, 2) accuracy of the information developed in the
report and plans prepared pursuant to. . .this act; and 3) an assessment of the
potential of successful implementation of the. . . ordinance. (New J erseySA
40:55D-121.)

Chapter 7

196
The legislation enacted in the 1996 amendments to the Municipal Land Use Law permitted

cluster development using noncontiguous properties (Chesterfield 1997 Master Plan p. 37).

In November of 1997 Chesterfield Township adopted an updated master plan. Under this

master plan the required number of development credits was presented. (See Table 7-1).

Table 7-1: Chesterfield Township Credit Requirements

 

# Credits
Required Type of Development Permitted

 

 

 

 

 

1.0 Detached Perimeter Village House: >8,000$f to 24,000; >70 ft lot width

0.75 Detached Village House: <8,000 SF and <70 ft lot width, and Tri-Plex D.U.

0.5 Apartment units and Carriage Houses (except for 2nd floor options noted
below)

1.0 Industrial/Office floor area at 2,000 SF/credit

Warehouse floor area at 4,000 SF/credit
(maximum floor area ratio of 0.25 in an Industrial Office Park District)
1.0 Retail/office per 1,500 SF
Two-story building required (2.5 story for roof design permitted)
Second Floor options: 1 credit/1,500 SF non-residential use

1 credit/2 market-level apartment units
0 credit/1 market plus 1 low-income unit
0 credit/2 moderate-income units

0.5 Home Office (see following conditions)

Maximum 1 employee not a resident

Maximum 900 SF or 30% of principle building, whichever is less

Located in principal building, or accessory building, but not both .

Office only; no retail or manufacturing

Medical allowed if on main road with rear access to alley

1.0 1 Institutional per acre (church, private school, cemetery, private

recreation, etc.)

 

 

 

 

 

 

 

Source: Chesterfield Township 1997 Master Plan

Status

In 1985, Chesterfield helped permanently preserve 608 contiguous acres of high-quality

farmland, the first farms protected under the New Jersey Agriculture Retention and Development

Chapter 7

197
Program. In 1989, this commitment to agriculture was strengthened when the township provided

$1.5 million in local cost-share funds toward the preservation of another 2,538 acres during the
state’s first competitive round of easement purchase funding. In 1992, 3,150 acres were
permanently preserved for agricultural protection (Gottsegen 1992 p. 140). Another 2,923 acres

have been submitted application for future purchase (Chesterfield 1997 Master Plan p. 39).

Thurston County, Washington

Setting

Thurston County is located at the southern end of Puget Sound, just sixty miles south of
Seattle and one hundred miles north of Portland Oregon. The county covers an area of 727
square miles. Thurston County is the eighth most populated county in Washington State. It is
one of the fastest growing counties not only in the state of Washington, but also in the Pacific
Northwest. In 1980 its population was 124,264, in 1990 it was 161,238, and in 1995 it was
189,200. In 1996 its population was 193,100, with approximately fifty percent living in the
northern part of the county, which is characteristically urban. The remainder of the county is
characteristically small towns and rural. These figures represent a 2.9% annual increase from
1980-1990, a 3.4% annual increase (3.1%) fiom 1990-1995 and a 2.1% increase from 1995-1996.
The projected population for the year 2010 is 261,226, of which 98,110 are projected in
incorporated areas, 79,289 in urban growth management areas (UGA), and 83,827 in rural areas.
These population numbers indicate a substantial increase in population that is expected to

continue over the next twenty years.

The number of households in 1970 numbered 25,186 and increased to 62,150 in 1990.
Between 1980 and 1990 there was a 31.1% increase (22,253) in housing units in the County

(Redman/Johnston 1994 p.30). In 1995 the number of new lots in subdivision activity was 889

Chapter 7

198
and the number of housing starts in that same year was 2,088, of which nearly sixty-eight percent

(1,416) were single family units, indicating a mixed market yet a strong single family residence
market. In 1980 multi-family housing represented twenty-two percent of the total housing stock
in Thurston County. By 1992, multi-family housing had declined to nineteen percent of the total
housing stock. By the year 2000, it is expected that multi-family housing will remain at nineteen
percent, indicating a stable acceptance of this higher-density type housing. The per capita
personal income for Thurston County in 1995 was $22,258. The 1992 Census for Agriculture
indicates an overall decline in farms and land in farms from 1982 to 1992; in 1982 there were 856

farms totaling 67,628 acres and in 1992 there were 811 farms covering 59,890 acres.

Planning History

Thurston County’s planning history has contained elements of agricultural preservation
and growth management. A surge in population in the mid-1970s initiated growth management
discussions between local officials. In the late 1970s, the Thurston County Planning Commission
made a zoning proposal. This prompted a citizen committee to produce a report on agricultural
preservation in 1978. The first urban growth boundary was established in 1983. Thurston is
under a strong state mandate to contain growth. TDR consideration was a direct result of the
adoption of the Washington State Growth Management Act (GMA) in 1990. The act’s
requirements support county and municipality coordinated efforts in growth management. Also
under the act, in 1993 agricultural zoning was finally adopted. At that time the zoning of the
agricultural area went from one dwelling unit per acre to one dwelling unit per five acres. Until
that time there had been two attempts to establish agricultural zoning, both of which failed.
Additionally, the act establishes goals to guide the development and adoption of Comprehensive
Plans and development regulations of selected counties and cities. Under the terms of the act,
Thurston County and the cities located within are required to prepare or revise their

comprehensive plans. The Thurston County Comprehensive Plan identifies the goals of
Chapter 7

199

agricultural land preservation in order to ensure an adequate land base of long-term farm use and
the conservation of long-term commercial agricultural land. These goals are supported by the

County policy to pursue the development and adoption of both a PDR program and a TDR

program-

The GMA requirement to update comprehensive plans includes designation of urban
growth areas (UGA). Development is to be guided into the UGAs to promote more efficient and
cost effective patterns of development. The act states that one of the goals of local
comprehensive plans is to “maintain and enhance natural resource-based industries, including
productive timber, agricultural and fisheries industries; to encourage the conservation of
productive forest lands, and productive agricultural lands and discourage incompatible uses.”
(Redman/Johnston 1994 p. 34) Other complementary goals of the GMA include reducing sprawl
and protecting property rights. Combined, these goals create a policy context that supports TDR
programming. Washington’s GMA requirements support consideration of TDR programming by
specifically encouraging the use of innovative land use management techniques. Furthermore, it

names TDR as an innovative technique whose use needs to be explored (Redman/Johnston 1994).

In deciding whether a TDR program was feasible in Thurston County, an economic
analysis was performed. To determine the financial feasibility of development rights transfers, the
following variables were analyzed: current land values, lot sale values, and site-improvement
costs in potential receiving-area locations. On the sending side, the analysis used the “firll market
value” of long-term agricultural lands, as determined by the assessor’s office, to calculate a range
of per acre land market values between $821 and $5,262 per acre. The analysis used the
difference between the full market value and the agricultural resource value to determine the per
acre development value. The county anticipated a TDR price of $3,000, a price at which the

county felt developers could still make a profit. On the receiving side, an income analysis

Chapter 7

200
approach was used to predict developer TDR value, which considered both land costs and

development costs. Land costs will have a direct influence on developers’ decisions to purchase
TDRs in the receiving area and at what price. Data from recent land sales from the County
Assessor’s Office and information from the Multi Listing Service were used to evaluate land

values in the potential receiving areas.

Program Description

Thurston County’s TDR program, established in 1996, is a third-generation program.
Lands that were dominated by agriculture were designated as “long-term agricultural areas” and
were the prime candidates for sending-area designation. On January 1, 1996, the Board of
Thurston County Commissions adopted a Transfer of Development rights Sending Area
Ordinance that established the long-term agricultural district as the sending area from which
TDRs could be transferred. In establishing the sending area, the county downzoned from one
dwelling unit per five acres (established in 1993) to one dwelling unit per twenty acres.
However, the county included a mechanism by which landowners in the sending area can petition
to have their land removed if the surrounding land becomes developed. The receiving areas,
approximately 30,000 acres, were established in the urban centers of Olympia, Lacey and
Tumwater and in unincorporated urban grth areas. Within the receiving area, developers can
either increase or decrease the development density through the use of TDRs. This is an
innovation to TDR programming and is in response to market demand for low-density single-

farnily housing, requiring developers to acquire TDRs in order to build at low densities.

Thurston County’s program is unique in that it operated across jurisdictional boundaries.
Sending areas are located in the county’s long term agricultural lands, and receiving areas are
located within the cities and unincorporated UGAs of the municipalities and the county. The

GMA established consistency and coordination requirements between the county and the cities
Chapter 7

201
for UGA designation. This was critical in establishing a supportive relationship between

jurisdictions.

When analyzing the feasibility of a TDR program in Thurston county, three types of
sending areas were considered: the long term agricultural districts, the Nisqually Agricultural
District and Historical properties. The long term agricultural areas meet the following criteria:
prime farmlands soils, except for wetland areas that are not in agricultural use; predominantly in
commercial agricultural use; approximately ninety percent or more of the area in parcels that are
twenty acres or larger; any single district area of at least 320 acres (however 200 acres is
acceptable if the district is located in close proximity to another district); location outside the
Natural Shoreline Environmental classification; and location outside of designated Gas. Parcels
less than twenty acres along the district boundary are included if more that fifty percent of the
parcel edge abuts other lands within the district and any single district is generally block-shaped
with distinct boundaries. The Nisqually Agriculture District is an undeveloped river valley
distinguished by the broad open areas of the Nisqually Wildlife Refirge and the rural farms. The
comprehensive plan identifies as a goal the protection of the Nisqually Valley agricultural lands
and states that this “unique agriculture area should receive the highest priority in the PDR and
TDR programs.” (Redman/Johnston 1994 p.41) When the TDR program was adOpted, the
Nisqually Agricultural District was not included as part of the sending area. Rather, a PDR
program was selected for this area because the lands within were the highest priority for
preservation. The eight historic properties identified as potential sending areas were farms of
considerable historic interest because of their age and location (Redman/Johnston 1994 p.41). In
the end, when the TDR program was established, only the long term agricultural district lands

were designated as sending areas. The total acreage for the sending area was then 11,514 acres.

Chapter 7

202

The long term agriculture lands have been rezoned from one dwelling unit per five acres
to one dwelling unit per twenty acres. TDRs are allocated to lands within the long-term
agricultural district at a rate of one TDR per five acres minus one TDR for each residence or legal
non-conforming commercial structure on the parcel. Farm housing units are excluded. Although
the county analyzed several allocation methods in its feasibility study, for example based on soil
characteristics, it was decided that it was best to keep it simple. In part this decision was made
because it was felt that this allocation method was the fairest. Additionally, other regulations in
the last ten years that came into play, such as the Floodplain regulation in 1994, limited
development on ‘non-developable’ lands. Therefore, the TDR program did not have to address

itself to physical limitations of the land.

The long-term agricultural district sending area includes approximately 11,500 acres or
roughly 2,300 TDRs. Because Thurston County used downzoning of sending areas, it is a
mandatory program. By downzoning, the realization of ‘development value’ can only be
accomplished through the sale of TDRs. “The ‘wipeout’ of the development value of these lands,
based on the expectations created by the prior regulatory scheme, is mitigated by allocating TDRs
in an amount that reasonably reflects the current fair market value of development expectations,

based on the previous zoning.” (Redman/Johnston 1994 p.41)

In Thurston County, the receiver sites were located in urban growth areas (UGAs). Both
undeveloped and /or underdeveloped lands in both the cities and adjacent unincorporated county
areas are included in the UGAs. A total of 30,199 acres are identified as potential receiving
areas, including 20,428 acres in the long term urban growth areas. The total planned residential
development capacity in the potential receiving areas is between 180,000 to 300,000 new
dwelling units. It is difficult to measure the number of TDR receiving opportunities in Thurston

County’s program because each jurisdiction defines its receiving area base and bonus densities.

Chapter 7

203

Furthermore, in some instances the bonus densities can only be determined by performance
standards. In other words, the number of additional units allowed through TDR purchases
depends on how many units can be placed while meeting the planning and zoning standards.
This is the case in Lacey, which allows as many units as one can fit, as long as the standards are

met.

The Receiving Area Process for using TDRs is administered by the jurisdiction where
they are used. Overall, for each TDR purchased an additional unit can be built. In Olympia, in
the single family residential four to eight d.u./acre zone, TDRs must be acquired for each acre of
development in order to develop at four to 4.99 dwelling units per acre and to develop at seven to
eight dwelling units per acre. In Tumwater, in the single family low density four to seven d.u./per
acre zone, the single family medium density six to nine d.u./per acre zone, and the multifamily
medium density nine to fifteen d.u./per acres zone, in order to develop at the last unit of density in
each of these zones, a TDR must be acquired for each acre of development. In Tumwater, in the
multifamily high density fourteen to twenty-nine d.u./acre zone, in order to develop at greater
than twenty-five dwelling units per acre, TDRs must be acquired for each acre of development
equaling the number of dwellings above twenty five. In Tumwater, in the mixed use capitol
corridor seven to fourteen d.u./acre zone, development can exceed fourteen dwelling units per
acre up to twenty-five by acquiring TDRs for each acre of development equaling the number of
dwellings up to twenty-five. In Lacey, in the moderate high density corridor, the mixed high
density corridor, the high density and moderate density residential zones, and in the Hawk’s
Prairie business zone, densities above the stated maximum will be allowed if a TDR is acquired
for each acre of development. Lacey also has a form of a “bonus multiplier,” where the number
of TDRs being used is multiplied if the special conditions are met, for example development of
affordable housing. However, in Lacey this bonus is not directly integrated within the TDR

program, rather it works in complement with the TDR program.
Chapter 7

204

Any parcel located in the long-term agricultural sending district has credited to it, upon
certification by the county, transferable development rights. These rights can be used to obtain
established residential densities on TDR receiving-areas lands according to the zoning in the
particular receiving area. The process to certify and transfer TDRs is outlined in the Transfer of

Development Rights ordinance.

To receive TDR allocation, the sending-area parcel owner applies for Certification of
Transferable Development Rights. The application for Certification of TDRs includes a map of
the proposed sending area parcel (prepared by a registered surveyor), a legal description and
parcel numbers, a title report, the number of non-family member units and non-farm structures,
number of family member units and farm housing units, and the review fee. A satisfactory
application results in Thurston County Development officially certifying the number of TDRs on
the sending area parcel and issuing serially numbered individual certificates for each TDR

credited. The issuance of TDR certificates is recorded in the property’s chain of title.

In order to convey the TDRs certified on a parcel, a TDR Easement is signed between the
owner and the county and is recorded with the Thurston County Auditor. The easement is granted
to and enforced by Thurston County. The TDR Easement includes the following information: all
TDR serial numbers certified on the parcel subject to the easement; and a covenant on the parcel
that it may be developed or subdivided for residential purposes as authorized on the underlying
zone, only if TDRs have been reserved prior to subdivision on the parcel or construction of any
dwelling unit. Any reserved TDR must be attached to a legal lot by a Document of Attachment in
Order for an approved single-family dwelling unit to be built. Reserved TDRs can only be used
on the original sending-area parcel or its legal subdivision. The TDR Easement also includes a

covenant that all provision shall run with the land in perpetuity. A TDR cannot be brought back
Chapter 7

205
at a future time. The TDR Easement also includes a statement that public right of access or

property use is not required. The owner of the property retains exclusive right to access and use
subject to the terms of the TDR Easement. The original owner can retain TDRs if he or she sells
the land separately, but the seller of the property must sign and record a TDR Easement on the

purchased property.

TDRs are sold on the open market, with the price being negotiated between buyer and
seller. A Deed of Transfer is needed to sell or transfer Certified TDRs. The Deed of Transfer is
recorded with the Thurston County Auditor and appears in the chain of title. It specifies the
number of TDRs sold and is only valid when recorded with the appropriate TDR Easement. In
order to sell or otherwise convey TDRs, a TDR Easement must also be signed. This protects the
subject land in perpetuity from further development except as allowed in the underlying zone at
the time the easement is signed. The Deed of Transfer must be signed by the landowner and
Thurston County and must meet the provisions set forth by the county including a legal
description and map, proof of ownership of the parcel, TDR certificate copies, proof of execution
and recordation of a TDR Easement, a covenant that all provisions run with the land, the names
of the Transferor and the Transferee, and covenants that the Transferor grants and assigns to the
Transferee a specified number of TDRs and acknowledges no further use or right of the TDRs
being transferred (Thurston County 1996). TDRs may be transferred to an immediate transferor
or broker before they are used and held for a period of time before they are used on a receiving-

area parcel.

Status
As of February 1998, no transfers have taken place. In fact, there has been discussion in
Tumwater of removing the TDR requirements. There were two instances where property owners

contacted the county to go through the preliminary process to determine the number of TDRs on

Chapter 7

 

206
their parcels. In one instance a real-estate agent owned a uniquely shaped parcel on which he

wanted to build a house and sell the remaining TDRs. In another instance a farmer had one TDR
In both cases the cost of a survey seemed to discourage further interest or participation. A county
planner noted that despite the option to tie the survey to a sales contract so landowners would

know if the TDR price is worth the cost of the survey, no one has considered this option (Kettman

1998)

Given the youthful nature of the Thurston program, the county is not at a good point for
evaluation. Those who have been invested in the TDR program realize that more attention and

public outreach are needed. However, they also fear that they have lost the momentum.

Summary of Exploratory Case Study Findings

The exploratory case-study analysis undertaken included the preceding case studies and
others including Collier County, Florida; Lexington-Fayette, Kentucky; New York City, New
York; San Francisco, California; West Bradford Township, Pennsylvania; East Nantmeal
Township, Pennsylvania; Town of South Hampton, NY; Hillsborough Township, New Jersey;
and San Mateo County, CA. Through the exploratory case-study analysis a number of findings
have been made. While some of these findings were unique to the program explored, most were
supported across cases. These findings have been grouped under six thematic headings:

background, participants, sending side, receiving side, TDR allocation and general.

Background
The community must have a strong regard for the resource targeted for protection. For
many TDR programs where the resource in need of protection is agricultural land, this means a

strong agricultural base. Aspects of strength go beyond economics. The resource community

Chapter 7

207

must be well organized and capable of having a presence in the political arena. The community
must encompass not only those who live in the protection area but also in the growth area; the
entire community must value the resource. Only then will the entire program community have a

sense of place that includes both the preservation and growth areas.

A fast-growing community with a diva-3e housing market is most appropriate for TDR
programming. TDRs will have limited value in very rural communities that have low land values
and little development pressure. A number of programs that have failed have done so because of
the availability of relatively inexpensive land for development, as in Collier County, Florida. In
other communities, if the land price is too high it is difficult to preserve large parcels. In these
areas, TDRs are only a partial solution. TDR appears to work best in rapidly growing fiinge

areas where the demand for housing can sustain a TDR market.

A policy context that supports T DR is critical. Municipalities interested in TDR
programming must be sure their comprehensive plan or master plan and its stated goals and
objectives includes the protection of the resource in question. Furthermore, the comprehensive
plan, zoning ordinance and other planning techniques need to permit the TDR program to
function. States or regions with a mandate to contain growth may be best prepared for TDR
programming. For example, Thurston County’s program came at an appropriate time, in support
of the state Growth Management Act. Existence of preservation areas and growth areas is helpful
in establishing the structural fiamework for TDR. Those areas that have accepted growth
management as a valid activity may be politically and physically prepared to implement a TDR
program. For example, if urban growth areas are in place, a community has already accepted the
idea that certain areas are best suited for development. Furthermore, if the growth areas are
appropriately sited, these areas are physically suited for increased development, i.e. ideal

receiving areas.

Chapter 7

208

Those areas considering TDR programming must realize that TDR alone can not achieve
its preservation goals or direct growth. Rather, TDR must be integrated into a suite of policies.
Two policies that support and complement TDR are agricultural districting and PDR.
Agricultural districts help stabilize land use in the sending area, in part assuring landowners that
scattered development will not occur. A complementary PDR program allows a community to
utilize the development rights concept while targeting areas for preservation. Unlike TDR, where
the market makes the decision on what parcels are preserved, PDR program administrators decide
what parcels to preserve. With PDR, communities can integrate strategies such as targeting
parcels within a certain distance from urban areas, thus creating a ring of preservation to hasten
the spread of infiastructure and development. This would allow TDR to concentrate its efl’orts
within the ring rather than being random. Earlier TDR programs have also seen a negative effect
associated with PDR programming in relationship to TDR. In Chesterfield, PDR actually
encouraged development on adjacent parcels where developers wanted to capitalize on the
preserved scenic farmlands. TDR program designers must be cognizant of both the potential

positive and negative effects of PDR programming and other policies in the suite.

Another technique that may prove useful with TDR programming is cluster development.
TDR is based on the same concept of redistributing density. With cluster development, this
occurs on a single parcel. Those areas that have accepted the cluster idea as valid may be
prepared to accept the notion of density redistribution across parcels. However, like PDR, cluster
development has also at times proven to be contrary to TDR objectives; for example, it may

promote roadfront development.

Although the regulatory atmosphere is important, a number of programs have proven

that specific enabling legislation for T DR is not a precursor to program implementation. In
Chapter 7

209
fact, a number of programs that have gone forward have proven to be the catalyst for state

legislation, for example Calvert County. Absent TDR enabling legislation, legislative authority
may be found within police powers of land use regulation, such as zoning. Additionally, states
with a statewide land use or grth management policy may provide the legal basis for

implementing TDR programming.

Because T DR program success is dependent on a viable market for TDRs, thorough
economic analysis must be done prior to program design. TDR program success is dependent
on a viable market for TDRs. Extensive market analysis should be done to determine the existing
development market and the variables that determine profitability. Additionally, economic
analysis should be ongoing and in coordination with TDR program monitoring. The TDR
program must be flexible enough to make necessary changes based on market conditions.
Recognizing and capitalizing on the existing and anticipated market is critical to TDR program

SDCCCSS .

Participants

Eflorts to initiate TDR programs or enact T DR legislation should come/ram the
community that is in need of protection. The most successful TDR programs were originally
promoted by the resource-protection community, most often the farming community. TDR
program success is dependent on the support of the preservation resource in question. Often this
means the agricultural community must support the program Programs that were introduced by
legislators or municipal officials eventually had to face the challenge of acquiring support fi'om
the resource community. One program designer stated that TDR programs that are not initiated by
the resource community are doomed to fail. A number of first-generation programs initiated by

well-intentioned planners have proven this true.

Chapter 7

2 10
A citizen committee to initiate the T DR effort, identify and review sending areas,

receiving areas and allocation methods has played an invaluable role. The TDR concept must
be supported in the political and economic arenas. A citizens committee provides a mechanism
for determining if support exists in both arenas. With TDR programming, the public role is
minimized and the private market is the driving force. For this reason a citizens committee,
which represents private market interests, should be intimately involved with TDR program

design, implementation and evaluation.

Municipal or county commitment to the program or to educating the community is
critical. In some cases the municipality, potential sending-area landowner and developer are
directly involved in the TDR program design and initiation. In the early stages of TDR
programming it is critical to have tangible real-world examples of TDR use and developer
success. In many municipal TDR programs the first, and at times the only, transaction involves
municipal commitment. This commitment may take the form of facilitation. The township can
work intimately with developers, educating them on the TDR program and encouraging their
participation. In Buckingham Township, the first TDRs were purchased by an individual who
was familiar with the TDR concept and directly involved with the township in achieving TDR
approval. The tireless effort and dedication of those involved on both the municipal side and the
private-development side has kept the TDR developments moving forward (Brandywine
Conservancy 1997 p. 28). Another reason why municipal commitment is important is that TDR
is a long-term policy. Municipal commitment is needed to ensure that the TDR policy and
supporting policies, in particular zoning, are maintained over time. If the program is perceived to

be short term, participation on both the sending and receiving side will be very difficult to obtain.

Municipal commitment is also related to another cause of first generation program failure

- insufficient staff. Given that the TDR concept is typically unfamiliar and complex, resources,
Chapter 7

211
(in particular, human resources) have to be committed. Educational efforts are critical in gaining

support for TDR programs. Initially there is often resistance to TDR programming from
landowners who perceive minimal direct benefit from the program and from landowners in
receiving areas who are adverse to bonus densities. This resistance requires education and
information, which in turn require staff commitment. Selected second- and third-generation
programs have shifted this staff commitment from the municipality to a bank or funding agency.

Nonetheless, commitment and sufficient staff are important to TDR success.

A public fund or public bank can play a number of important roles which lend
credibility to the T DR program, including facilitator, catalyst and buyer of last resort. A bank
can play a number of roles, including reducing lender uncertainty, sustaining TDR market activity
and assisting in setting TDR price. Once lending institutions understand how a TDR program
works and are assured of municipal support, lender uncertainty disappears. While a number of
programs have a TDR bank, few have the right to sell TDRs, and those that do have not yet
exercised it. The reason cited is that the bank should not compete with farmers in the TDR
market. In Thurston County, there was a deliberate decision to exclude a public TDR bank. The
County Board wanted the administration costs as low as possible. Additionally, the board chose
not to address the challenges of acquiring and utilizing public fiinds. While the board was aware
of the challenges of a public bank, it may not have weighed them against the benefits of a bank.
With a bank, the preservation-area landowners know there is a buyer of last resort and the overall
community recognizes the municipal, county or regional commitment as expressed in bank
creation. It has been argued that creation and funding of a bank achieves credibility, obviating

one of the main obstacles to TDR programming.

Chapter 7

2 12
Sending Side

To locate sending areas, target areas that meet the primary goals. While there may be
numerous preservation goals, when initiating a TDR program the focus should be on primary
goals. With the challenges associated with TDR programming, simplifying goals and objectives
would be prudent in gaining solid support. It is best to identify goals and prioritize them.
Primary goals should be addressed before attempting to approach secondary goals. For example,
if agricultural protection is the goal, a primary goal may be to preserve prime and unique
farmland or prime farmland within the urban fi'inge. This will simplify the overall TDR program

and therefore increase potential for widespread community acceptance.

Because TDR represents an option to sending-area landowners, to encourage T DR use
it should be made easy to transfer T DRs. If it is difficult or perceived as difficult, sending-area
landowners will not utilized the TDR option. One way to make it easy is to not designate specific
receiving areas; rather, allow all areas in the community to receive TDRs. In theory, sending-area
landowners will more easily identify developers who can use TDRs, because all developers can
make use of the TDRs. Programs that have attempted this discovered that it did not encourage
TDR transfers, e.g. Buckingham Township, Pennsylvania. Additionally, these programs
discovered there were political and legal ramifications. Many of these programs, as in Calvert
County, were eventually revisited and modified. In Calvert County receiving sites were
eventually identified. Additionally, by allowing any zone to receive TDRs, the pattern of
development may be mixed and fragmented. This may in the end do more harm than good in

preserving the resource in question.

Development options should be minimized in the sending area in order to make the
IDR option more appealing. This is related to making the option to use TDRs easy. Limiting

other development options to sending landowners makes the TDR option more likely.
Chapter 7

213

Additionally, development options that promote development in the sending area are contrary to
the preservation objective. For example, allowing splits or transfers within the preservation
district encourages rather than discourages development. Both tend to preserve rural character,
not farming. Rural estate developments and higher-density developments (e. g. one dwelling unit
per five acres or one dwelling unit per two acres as was the case in Buckingham; one dwelling
unit per five acres in Calvert) in the sending area are development options that are contrary to
preservation goals. Densities allowed and densities prohibited will depend on the program area’s
development trends and propensities. Rule-of-thumb densities cannot be applied. However,
allowing higher-density developments weakens the incentive to sell TDRs. Densities have to be

relatively low enough in the sending area to preserve the resource.

Reasons other than maximizing economic gain for participating in TDR programs
must be considered The Brandywine Conservancy reported that potential senders were willing
to sell rights for a good retum, though perhaps not necessarily the maximum return, out of a sense
of doing the right thing (Brandywine Conservancy 1997 p. 28). Greg Bowen, the TDR program
administrator for Calvert County, reiterated this comment, stating that economics was not the
main reason why farmers participated in the program. Support of municipal PDR and TDR
banks, because they are publicly financed, suggests there are other than economic reasons for

land preservation and growth management.

Receiving Side

The major opposition with existing programs came from receiving-area location and
densities; for this reason a receiving-area study should be conducted. Key variables to consider
are: availability or potential availability of public infrastructure; base densities and bonus density
increases, which should be set within the framework of the Comprehensive Plans; receiving-area

size, which should be large enough and diverse enough to create a real market for TDRs; and the
Chapter 7

214

receiving-area capacity. Receiving areas should be large enough and diverse enough to create a
real market for TDRs. This allows TDRs to be used in a variety of housing markets, and also
allows for subtle changes within housing types and zones. Across all case studies, the most
challenging aspect of TDR program design is locating receiving areas, setting base densities and

establishing incentives for TDR use. This is also where legal issues have arisen.

Receivin- site criteria should be well defined; for example, receiving areas should be
located where public infrastructure is currently available or soon to be provided. Failing to
provide public infrastructure, particularly public sewer and water, in the receiving zones has two
major effects. First it indicates a lack of municipal commitment to generating development
demand. Second, it stifles the developer’s ability to realize increased TDR density bonuses.
Typically, without public infrastructure, bonus densities cannot be achieved. Many first-
generation programs failed because they located the receiving sites in areas where sewer and
water did not exist. The bonus densities that developers could achieve through TDR utilization
could not be realized given the absence of sewer and water. If densities permitted are so high that
additional units cannot physically be constructed, then TDRs are of little or no value. The same
holds true if the density increase forces a change in product from detached single-family to
attached multi-family units, which may be less marketable in the community (Redman/Johnston

1994).

An additional receiving-site criterion is that the base density and bonus density increase
must be set within the framework of the Comprehensive Plans. The receiving-area base density
has to be set so that ‘bonus’ densities can be achieved. This was the problem in Buckingham
Township, where the receiving areas targeted were already at densities high enough to meet
market needs. By making these zones receiving areas, already-high densities were made even

higher, so the incentive to use TDRs is diminished. Dramatic increases in maximum allowed

Chapter 7

215
densities through TDR use have not proven to be a useful strategy, particularly when developers

question whether such high-density developments can be successfully marketed (Brandywine

Conservancy 1997 p. 27).

Related to base and bonus densities is the notion that differences between conventional
development and development using TDRs ean be negligible. TDR use does not have to result in
dramatic changes in development at receiving area sites. Bonus densities do not have to result in
a change in housing type, for example from single- to multi-family housing. In fact, to avoid
controversy, it is best to keep the changes subtle. TDR programs that can add density without

drastic changes in visual quality or market value have the best chance for success.

The elimination of specific receiving areas has not resulted in a greater likelihood that
transfers will take place. Buckingham Township’s program allowed rights to be transferred
almost anywhere, a radical departure from most TDR programs in its virtual elimination of a
distinct and separate receiving area concept. Peninsula Township, Michigan, is designing a
similar program, with receiving zones being village centers. While Peninsula Township has
proposed two village centers on its zoning map, any zone could apply to be rezoned to village
center, and thus be permitted to utilize TDRs. By establishing village centers through the zoning
process, Peninsula Township has avoided legal issues associated with floating zones or non-site-
specific receiving zones. Both townships that have chosen not to designate specific receiving
areas have avoided potential opposition and the NIMBYism typically associated with receiving-
area designation. While this may avoid controversy in the program design and initiation phase, it
may not avoid the controversy once development rights are transferred and actual density bonuses

are realized.

Chapter 7

2 16
One question the Brandywine report raises is whether this approach to sending and

receiving areas will result in a mixed pattern of preserved and developed parcels. By not
separating sending and receiving areas, awkward conflicts between agriculture and residential
development may emerge (Brandywine 1997 p. 24). Peninsula Township has addressed this by
designating a village center as a zone and defining what criteria it must meet. In meeting the

criteria, the township believes all village centers will be appropriately located.

Demand for T DRs must be created through program design based on prevailing
market conditions and trends. This can be achieved through a bonus, bonus multipliers, or other
incentives not related to density. Programs that have attempted to create TDR demand by
increasing the supply of TDRs, sending side driven, have seen limited success. This was the case
in Buckingham Township. If a TDR program’s success hinges on TDR transfers, then program
designers must focus on mechanisms for encouraging or requiring developers in the receiving
areas to use TDRs. Developers in the receiving areas must be able to financially benefit from the
change in density permitted with the purchase of rights. While most programs allow density
increases with TDRs, Thurston County, recognizing the market strength of large-lot single-family
housing, also allows decreases from base densities with TDRs. Another way developers may
benefit is through saving time. The axiom ‘time is money’ holds true in development activities.
An incentive to use TDRs is to expedite the approval process for developers. An additional
developer incentive to use TDRs is integration with infrastructure planning. No matter what type
of incentive is used to encourage developers to use TDRs, the program must also make it
administratively easy to actually acquire and utilize the TDRs. If it is difficult, developers will

hesitate to participate.

Chapter 7

2 l 7
TDR allocation

There must be a balance between TDRs available and T DRs in demand The
theoretical literature has suggested a ratio of two to one, receiving to sending opportunities, in
order to achieve this balance. This suggests that importance is placed on realization of all
sending opportunities and not necessarily that all receiving opportunities be realized. Given that
the overall goal of most TDR programs is the preservation of a resource found in the sending
area, this ratio may be most useful. However, a two to one ratio does not actually create balance,
and some receiving-area developers may not be able to meet their TDR demand. Additionally, if
the demand truly doubles the supply of TDRs, the price may increase. The question is whether it
can increase beyond a receiving-area threshold, i.e. pricing itself out of the market. Both the
allocation of TDRs in the sending area and the capacity of TDRs in the receiving areas determine
the price that TDRs will command. That price must be acceptable to both parties, perceived as
fair and equitable to both sides. A lesson learned from first and second generation programs is
that a willing buyer and a willing seller are required and both operate within a market climate.
An appropriate value of TDRs must be viewed from the perspective of both the landowner who
might sell the rights and the landowner who would purchase the rights (Redman/Johnson 1994).

Unless both are satisfied, transfers will not occur.

Conventional or base densities in the sending area should be less than the number of
TDRs generated; otherwise there is no incentive to transfer TDRs. However, if the incentives to
utilize TDRs are so strong on the receiving side that developers are willing to purchase TDRs at a
higher value than the value of development on a sending site, the number of TDRs generated in
the sending area does not have to be greater. This seems highly unlikely, since if this was the

case, the development pressure on the preservation lands would not be great enough to warrant a

TDR program.

Chapter 7

2 l 8
While there are a variety of ways of allocating TDRs, the allocation method is best kept

simple. Although there are a variety of TDR allocation methods including gross acreage,
previous zoning, soil suitability, developable land, and depth to seasonal high-water table, a
major lesson learned from existing programs is to keep it simple. If sending-area landowners do
not understand the allocation method, it will be more difficult to convince them of the value of

the TDR portion of their property.

On one hand, program administrators may want to allocate TDRs in such a way that
reflects the relative value of the land either for development or based on the preservation resource
value. For example, in some programs, land with limited development potential, due to physical
conditions such-as wetlands or location in a floodplain, is allocated fewer TDRs per acre than
land that is developable. In other programs, more productive farmland is allocated more TDRs
per acre than less productive land. On the other hand, by simply allocating TDRs based on gross
acreage, no matter what the characteristics of the land, program administrators do not have to
defend their valuation methods, since all landowners will be treated the same. When deciding
what allocation method to use, both sides must be considered. Program designers must consider

what is equitable, and what is understandable, what is politically acceptable.

Once TDRs have been allocated, the program must be monitored and, if needed, changes
in allocation must be made. However, this will raise questions regarding consistency of the
program over time. Issues of fairness and equity will need to be addressed. There are various
methods to adjusting TDR demand. One way is to reduce by right densities, i.e. reduce base
density through downzoning. This will have political repercussions. Also, to be upheld, the
Comprehensive Plan must spell out the public good in the rezoning. Another way to adjust TDR
demand is to increase the size of the receiving area. This may be very challenging, since it will

disrupt the balance in sending-to-receiving opportunities. Additionally, the NIMBY syndrome
Chapter 7

219

often accompanies any increase in receiving-site densities. Any attempt to increase receiving-
area size has to be designed and located appropriately. Another way to adjust TDR demand is to
decrease supply of TDRs, either through rezoning, complementary PDR programs, or voluntary

retirement of TDRs.

General

While a number of resources may be of concern, the program should be based on a
single resource. Although TDR programs have been established to address the complex issues of
preservation and growth management, to be successful they must simplify the inherent
complexity. To help accomplish this, planners should initially base the program on a single
resource. Once a program is understood, accepted, and successful, the preservation of additional

resources can be integrated into the program.

Simplicity is critical, especially when introducing and initiating the TDR program All
the programs used in the exploratory case study demonstrated the importance of simplicity. Even
those programs that began with detailed studies and intricate allocation methods eventually
became less complex. Despite the move to simplicity, the detailed studies and considerations
were important, providing program designers with a better understanding of the elements of TDR
program. This understanding allows program designers to make appropriate choices on how to
simplify the TDR concept and program. Two major causes of program failure, i.e. limited or no
transfers, have been identified. Many of these programs were flawed in their design due to lack
of understanding of the TDR concept within their community context. Additionally, the
community misunderstood these programs due to their complexity and lack of program

commitment to simplification.

Chapter 7

 

220

Municipal and citizen understanding of TDR program components within a community’s
context is critical to program success. Often this understanding requires the complex issues of
preservation and growth management to be simplified. Even TDR programs that are designed
and implemented based on existing conditions, thorough study, and logical choices can fail, if
they are too complex to be accepted or understood. For this reason, rather than fail before getting
started, it is best to keep a TDR program simple; first gain acceptance, then understanding. Once
the TDR concept and program are understood the program can be modified to reintroduce the

inherent complexity of the issues at hand.

In deciding between simplicity and reality, phasing may be appropriate. The designers
of the Calvert County program argue that if there is a strong agricultural community a voluntary
program is more appropriate than a mandatory program. The farming community wants
assurance that it will not lose land equity or all opportunities to realize that equity and therefore
will not initially support a mandatory program. Given the unfamiliarity of the TDR concept, one
alternative to implementing a program is to start with a voluntary program in order to minimize
opposition. Additionally, from a legal standpoint, without enabling legislation a voluntary
program may be acceptable. Once a TDR market is established, the community can then move to
a mandatory program. Opposition to a mandatory program will be diminished, due to the
existence of a real TDR market. For example, Calvert County began as a voluntary program,
with no designated sending or receiving areas. Nearly two decades later, the county was able to
designate sending and receiving areas in 1993 because landowners who were downzoned
understood the mitigating aspect of TDRs and recognized that there was a real market for their
TDRs. The county is now considering downzoning the sending area from one dwelling unit per
five acres to one dwelling unit per twenty acres and concentric rings to target development areas.
Calvert County illustrates how a program can initially be simple and as it is accepted and

understood it can be made more complex in order to achieve specific objectives. Transfers across

Chapter 7

221
jurisdictional boundaries if attempted should be the last phase in a TDR program. Although this

may be the ultimate goal, the political and perceived economic ramifications of multiple
jurisdictions will overwhelm efforts to initiate a TDR program. Communities must see how the

TDR concept works before they will agree to break rigid jurisdictional lines.

TDR Index Purpose

Because one of the major criticisms of TDR programming is its complexity, a TDR index
was developed. The exploratory data reduced to thematic clusters was aggregated further,
yielding thirteen TDR characteristics. By interpreting the exploratory data using a simple index,
TDR complexity is reduced. Often policy makers have disregarded the TDR concept because of
its complexity. By presenting important characteristics in a simplified form, the index, policy

makers may at least be willing to investigate the TDR concept.

A hypothesis generated out of the exploratory case study was that these characteristics
could be used to indicate TDR program success or failure. Communities interested in TDR
program can gain insight into which characteristics were important to the cases explored and
decide if they would be applicable in their local context. If it can be determined that the
characteristics can indeed be used as indicators of program success or failure, communities could
examine the characteristics in their local context, deciding which have priority and therefore
which will be allocated energy, time and resources. Furthermore, the TDR index is used to focus
the second part of the study, concentrating research attention and resources on the thirteen
characteristics. The TDR index was used as a mechanism for verifying exploratory case-study

conclusions.

Chapter 7

222

TDR Index

A foundation for TDR should be in place. This foundation may include enabling legislation, a
comprehensive plan, zoning ordinances, growth management legislation or preservation

legislation.

The regulatory process must have sufficient integrity. This may include strict zoning, e.g.
exclusive agricultural zone, a comprehensive plan or master plan and zoning ordinances that
support and permit TDR implementation. Additionally, development design standards and
criteria should be defined in order to achieve the desired type of development. The NIMBY
scenario is more likely if these standards and criteria are not in place; people will anticipate the

worst possible development and petition against it.

A sense of place should exist in the program area, across sending and receiving areas. It is not
enough to have a sense of place in the preservation area or within the receiving area. Because
TDR program success is dependent on transfers of rights from one area to the other, the sense of
place must encompass both sides. Citizens in the receiving areas must identify with the benefits
of preserving sending area land, while citizens in the sending area must identify with the benefits

of directing grth to receiving areas.

The resource should be perceived as valuable enough to preserve. Best is a resource with
multiple values. The resource must have the support of the entire preservation community - all
factions, not just the well organized. Given the variety of stakeholders in the community, the

resource value needs to be presented from all perspectives.

Chapter 7

223

A rapidly growing area means there is a sufficient development market. The program area
needs to encompass a diverse real-estate market (Pizor 1986). TDR works best in rapidly
growing fiinge areas. In order to succeed there must be opportunities for developers to utilize

TDRs.

An understanding of development demands and patterns is needed in order to locate sending
and receiving sites appropriately and set zoning base and bonus densities accordingly. In order
for TDRs to be in demand they must be required in areas where development is demanded.

Additionally, they must be required for the type of development in demand.

Viable receiving areas require a market for intensity and type of development allowed by TDR
use. The receiving sites must be politically acceptable and physically feasible sites, with
centralized sewers and water. Additionally, they must be feasible from a planning perspective,

i.e. meet the comprehensive plan, zoning conditions and design standards and criteria.

xi Public support is critical and requires TDR education programs. All stakeholders within the
program area must be well informed. If the community does not understand TDR concepts and
processes, it will never support them. Overall community support is essential for a strong TDR

program. Often a facilitating agency or bank plays an important role in the education process.

Leadership plays an important role. There must be leadership within and across stakeholder
groups, for example the farming community, developers, lending institutions and real-estate
brokers. Early involvement of private-sector interests can instill a sense of partnership and

cooperation (p.34 Siemon). Political leadership is critical, given that TDR is a policy decision.

Chapter 7

224

Mandatory programs appear to be more successful than voluntary. Mandatory programs by
definition require downzoning of either the sending or receiving areas. Downzoning in the
sending area provides an incentive for landowners to sell TDRs. Downzoning in the receiving
area provides an incentive for developers to acquire TDRs to build at bonus densities.
Prohibitions on development in either the sending or receiving areas must be comprehensive and

mandatory; if not, the credibility of the TDR program is in question.

A TDR bank can serve several important functions. A bank can purchase and sell TDRs to
balance the market. It can act as a buyer of last resort. Banks have strengthened program
credibility with banking institutions and mortgage lenders. A bank can also function as a

facilitator, simply bringing potential TDR buyers and sellers together.

TDR works well in concert with PDR or other easement purchase programs. TDR and PDR are
complementary programs; the former allows the market to decide what parcels to preserve, while
the latter targets parcels for preservation. They also work well together, given the limited funds
of most PDR programs. By utilizing PDR funds strategically, these limited funds can be

maximized. TDR with its private funds can be used to strengthen the PDR efforts.

TDR as an option should be simple and cost-efficient. If the program is too complex to
understand or too costly to participate in, potential TDR sellers and buyers will not become
involved. TDR programs should be structured clearly and TDR concepts should be applied with

as much simplicity as possible.

Chapter 7

Chapter 8

Manheim Township Case Study

Program Area Description

Manheim Township is centrally located in Lancaster County in south-central
Pennsylvania, giving its residents convenient access to major cities such as Philadelphia,
Baltimore and Wilmington. Manheim is bounded on the Conestoga River on the east and the
Little Conestoga Creek on the west. Due to its placement just north of the City of Lancaster, the
township’s southern boundary is irregular due to land annexation. In fact, there are islands of
township land surrounded by the City of Lancaster. The township contains a total land area of
22.6 square miles, or 14, 464 acres. In 1990 nearly thirty-six percent of this land was
undeveloped. Agriculture is the dominant land use in the township at forty-four percent (1,157
acres). Other existing land uses are residential, seventeen percent (2,459 acres); commercial, six
percent (868 acres); office, two percent (289 acres); industrial, eight percent (1,157 acres);
civic/schools, three percent (434 acres); recreation, six percent (868 acres); and vacant fourteen

percent (2,025 acres) (Manheim Township 1995 p.40).

The majority of the undeveloped land in the township is covered by highly productive
agricultural soils (Manheim Township 1995 p.14). Manheim Township developed as a rich
agricultural area due to its highly productive limestone soils. Prime agricultural soils are one of
the township’s most important natural resources. Since the 19503 development pressure has
threatened this resource. While other townships surrounding the City of Lancaster have remained

rural, Manheim Township has seen growth and development in part due to its access to

225

226
transportation corridors and the availability of sewer and water facilities. In 1950, the township’s

population was 9,289, increasing by nearly sixty percent by 1960 with a population of 14,855.
The township’s population in 1970 was 21,539 and in 1980 was 26,042, representing ten-year
growth raters of forty-five percent and twenty-one percent respectively. Its population in 1990
was 28,880, making it one of the largest municipalities in Lancaster County, second only to the
City of Lancaster. Although the township population continues to grow, the growth rate from
1980 to 1990 was significantly less (10.9%) than the previous six decades. Countywide growth
shified to other municipalities as a result of the expansion of municipal services in other

townships. The projected population for 2010 ranges from 34,228 to 36,770.

In 1990 there were a total of 10,656 households in the township. The total supply of
housing stock increased from 9,390 in 1980 to 11,009 in 1990, representing a 17.2% increase (a
net increase of 1,619 units). This rate exceeded the population growth rate (10.9%) for that same
time period. In 1990, 66.2% (7,284 units) were single-family detached, while 13.6% (1,493
units) were single-family attached and 19.1% (2,098 units) were multi-family units. This
indicates a mix of residential housing, but a market dominated by single-family detached. The
median value of owner-occupied housing units in 1990 was $112,900. The mean per capita

income in 1989 was $19,703 and the median household income was $41,450.

Planning History

Historically, Manheim Township’s agricultural lands have been perceived as a valuable
natural resource in need of protection. In 1944 the township adopted its first zoning regulations,
which included the designation and requirements of an Agricultural District. The 1956 Zoning

Ordinance stated:

Chapter 8

227
An A—A Agricultural District is intended, primarily: to preserve and conserve farm or

agricultural areas in Manheim Township to maintain the food-producing capacity of

the soil; to retain an open urban fringe area for civilian defense purposes; to preserve an

easily accessible open-country area for the health and general welfare of an urban area; to
discourage the subdivision of land into uneconomic and unproductive parcels; to
encourage all agricultural principal and accessory uses so as to retain a stable and well-
balanced agricultural area; to pemiit easy accessibility to essential agricultural processing
needs; and to enable the firrtherance and conservation of an agricultural neighborhood,
thereby protecting the community, region, state and national interest in the basic needs of
agriculture.

The 1966 Comprehensive Plan included the preservation of an agricultural district.
However, when the township began to institute the zoning ordinance to implement the
agricultural district, there was landowner opposition. As a result the agricultural district get
smaller and smaller and eventually disappeared. The agricultural district was never instituted.
Ironically, over the same time that Manheim Township’s zoning regulations and comprehensive
plans recognized the importance and value of agricultural lands, the township experienced
agricultural land loss. In 1966, agricultural lands accounted for eighty-two percent of the
township lands; in 1980 agricultural lands accounted for sixty-two percent of township lands, and
in 1990 only thirty-six percent of township lands were agricultural. In the 1980s Manheim
Township lost 3,722 acres of farmland to development and had only 5,000 acres remaining of the

14,464 total (township) acres (Manheim Township 1990).

Manheim’s TDR program is in part due to the adoption of its 1987 Comprehensive Plan.
Like the 1966 Comprehensive Plan, this plan included the preservation of an agricultural district.
The 1987 Comprehensive Plan recommended the reduction of residential densities and set the
stage for TDR programming. The 1989 zoning ordinance was adopted to implement the
Comprehensive Plan. Once the TDR ordinance was adopted, the density achieved in the
receiving areas with maximum transferred rights was no more dense than the development
patterns during the 19805, i.e. before the 1989 zoning ordinance adoption. This raises two

important points. First, TDR ordinance acceptance is in part attributable to the perceived
Chapter 8

228
alignment of previous and proposed densities. In Manheim the previous density was actually

manipulated to appear similar. Second, the Manheim program is by definition voluntary because
downzoning did not accompany the TDR ordinance. However, in reality it is a mandatory
program, because downzoning occurred with the 1989 zoning ordinance as a precursor to the
TDR ordinance. In theory, Manheim’s TDR program is voluntary, but in actuality due to the
downzoning in 1989 it is mandatory. This raises the issue of phasing or timing of TDR program
elements. It ean be argued that Manheim disguised its TDR program elements under more
accepted techniques, therefore eliminating some of the complexity and unfamiliarity of the TDR
program itself. In reality, complexity was not reduced, just shifted. By designing the TDR

program in this way, Manheim was able to minimize controversy (Brandwine Report 1997 p.31).

In 1990, Manheim Township witnessed the addition of 2,000 residential units in the
development or planning process (Manheim Township Newsletter October/November/December
1990). The township commissioners proposed a 2,261-acre Agricultural Zone in the northeast
quadrant of the township to protect prime agricultural soils. The majority of soils in this area
were classified as prime Class I or Class II soils. The commissioners realized they needed to
commit the township to the agricultural district concept. They made a conscious decision to
designate a portion of the township as agricultural district, no matter what the landowners said, or
how loud they became (Butler 1997). For this reason the political leadership of the commission
was critical to the TDR program. With this commitment the zoning ordinance for the agricultural
district was adopted within the year. The process involved numerous meetings with landowners.
The township’s initial meetings were with small groups, and later working up to larger groups.
The meetings served to provide information and also assisted in developing the zoning ordinance.
The township provided information on what it was trying to accomplish overall. The township’s

goal in these education and outreach efforts was to achieve public support.

Chapter 8

229
In 1990 the township adopted an Agricultural Zoning District, the stated purpose of

which was to promote the continuation and preservation of agricultural activities in those areas
identified as most suitable for such endeavors. They adopted a 2000-acre agricultural district,
where the 1987 Comprehensive Plan had a 500-acre agricultural block. By establishing this
district, the township attempted to protect and stabilize the viable agricultural economy by
eliminating uses that were incompatible with farming operations in highly productive soil areas.
Non-agricultural uses are limited in the Agricultural Zoning District to prevent the adverse efl’ects
resulting fi'om the encroachment and mixing of residential and other incompatible development
with agricultural practices. The Zoning Ordinance states the intent of the Agricultural District:

...to preserve prime agriculture and farmland considering topography, soil type and

classification and present use. In order to attain this goal, the regulations of this District

are designed to protect and stabilize agriculture in areas of productive soils as an on-
going, viable, major component of the economy of the Township and Lancaster County,
to permit with limited exceptions only those land uses and activities which are
agricultural in nature, to encourage the preservation of the most productive farmland
within the Township as a valuable resource which is lost and not reclaimable once it is
developed for building and other non-agricultural purposes, and to prevent adverse
effects resulting from the encroachment and mixing of residential and other incompatible
development with agricultural uses.

Given the incompatibility of residential and agricultural land uses, while the township
still permitted residential development within the Agricultural District, it was at a dramatically
reduced level. For every twenty acres of land owned, a landowner could sell one lot or build one
residential unit. For parcels between two and twenty acres, one lot could be sold or utilized for a
single family dwelling unit. Also in 1990, because of the reduction in residential development
allowed in the agricultural district, an ad hoc agricultural committee reviewed methods of
providing fair and reasonable compensation to persons affected by the Agricultural Zone. Thus,
TDR consideration began. It was actually a landowner who introduced the notion of

compensation. The township worked on the concept of TDRs and developed the language for

approximately a year. In regards to ordinance development, the township used a draft ordinance

Chapter 8

230
at meetings to solicit feedback. When Manheim Township adopted the TDR ordinance, it

included a resolution specifying its intent to have a TDR ordinance, as well as a program for the
allocation and sale of development rights within the township, in place within the next twelve

months. In fact, the program was adopted and implemented within eight months of that time.

Regulatory Authority

TDR enabling legislation in Pennsylvania is very generic, falling under the zoning aspect
of planning code. TDR programming is permitted by the Pennsylvania Municipalities Planning
Code. This legislation simply states that the transfer of rights is allowed. The only restriction is
that the transfer can not go out of the municipality unless there is a joint zoning ordinance
between municipalities. Township officials are not aware of any municipalities subject to a joint

ordinance that allows for transfers.

Program Initiation

Manheim Township’s TDR program was adopted in 1991 as an amendment to its
existing zoning ordinance. The program’s goal is the preservation of agriculture without
disruption to the receiving area. The township purchased development rights, and banked them,
and in 1997 sold its first rights to a private developer (Brandywine Report 1997 p.31).

"The purpose of the transfer of development rights program is to preserve the prime

agricultural soils and agricultural character of the lands in the Agricultural District by

shifting development from that area to the receiving areas of the Township.” (Article 24A

Transfer of Development Rights)

One of the problems with Manheim Township’s overall land use policy was that the
township was implementing a number of new and innovative techniques such as the TDR, the

planned residential development (PRD) and impact fees. However, none of these were reflected

in the Comprehensive Plan. The township had fallen behind, designing and initiating techniques

Chapter 8

23 1
and policies that were not reflected in the Comprehensive Plan. The Comprehensive Plan had to

be brought up to speed. This was a three year endeavor and resulted in the 1995 Comprehensive
Plan. The Future Land Use Maps in the 1987 and in 1994 indicate the shift in Comprehensive
Plan land use policy. Most notably agricultural land use went from six percent of the township’s
total land to 15.3%. While residential land use decreased minimally from 62.4% of total land to
55.2%, the percentage for low-density residential decreased while the percentages for medium
and high density residential increased. (See Table 8-1 and 8-2) The 1995 Comprehensive Plan
recognized that the township’s natural resources were diminishing. Within this plan one of the
stated objectives is to “protect prime agricultural lands from encroachment by non-agricultural
development.” (Manheim Township 1995 p. 81) Although the majority of the township’s prime
agricultural production area had been zoned to protect against the conversion to non-agricultural
uses, continued preservation efforts that would result in permanent protection were needed

(Manheim Township 1995 p.2).

Table 8-1: Manheim Township 1987 Future Land Use

 

 

1987 Future Land Use Map
Land Use Categog Approximte Acreage % Total Land Area
Residential (9,03 3) (62.4)
Low Density Residential 4,355 30.1
Medium Density Residential 3,725 25.7
High Density Residential 953 6.6
Office — Service 333 2.3
Commercial 824 5.7
Industrial 2,23 1 15.4
Community Facilities 487 3.4
Recreation — Open Space 547 3.8
Agricultural 871 6.0
Total 14,326 99%

Source: Manheim Township 1995 Comprehensive Plan

Chapter 8

232
Table 8-2: Manheim Township 1994 Future Land Use

 

 

1994 Future Land Use Map
Land Use Categog Approxirngtg Acreage % Total Land Area
Residential (7,988) (55.2)
Low Density Residential 2,827 19.5
Medium Density Residential 4,122 28.5
High Density Residential 1,039 7.2
Office - Service 200 1.4
Neighborhood Commercial 129 0.9
General Commercial 546 3.8
Industrial 1,922 13.3
Civic/Community Facilities 452 3.1
Recreation — Open Space (883) (6.1)
Public Recreation 414 2.9
Private Recreation 469 3.2
Agricultural 2,206 15.3
Total 14,326 99%

Source: Manheim Township 1995 Comprehensive Plan

Sending Area

The Township Agricultural Zoning District represents the sending area in Manheim
Township, and covers approximately 2,000 acres. The criteria used for locating the agricultural
district included soil quality, population density, existence of infiastructure, and regional
considerations. Regional considerations included land use in adjacent townships. For example,
Warwick Township to the north is farmland; across the river, Upper Lacot is a large farming
valley. Another regional consideration was where a critical mass of farmlands existed,
irrespective of jurisdictional boundaries. Most farms within the agricultural district are between
forty and one hundred acres. Together and in relation to adjacent townships, they form a critical

mass of farmland.

The Agricultural District was downzoned in 1989. The previous zoning was 1-3

Industrial, R-l Residential and R-2 Residential. While the original zoning was residential and
Chapter 8

233 b
industrial, the area was rezoned to residential densities. This was done in an area that did not
have public sewer and water, so the densities would have been very low without the added
expense of developing and connecting infrastructure. While the land was in agricultural use, it
was zoned residential. Under the new zoning of the Agricultural District, one dwelling unit or
one lot could be built or sold for every twenty acres owned. For parcels between two and twenty
acres, only one lot may be sold or one unit may be built. Eligible tracts within this sending area
must meet the following criteria: 1) the tract of land shall be located within the Agricultural
District, 2) the tract of land shall not be less then ten acres, 3) tracts of land or portions thereof
owned by or subject to easements (including road easements, railroads and utility lines) in favor
of governmental agencies, utilities and nonprofit corporation shall not be eligible for transferable
development rights, 4) land restricted against development by covenant, easement or deed
restriction shall not be eligible for transferable development rights unless and until such time as
said covenant, restriction or easement is dissolved or rescinded and 5) land utilized for uses other

than agriculture shall not be eligible for transferable development rights.

Ifthe TDRs allocated and severed would entail less than an entire parcel, the portion of
the parcel involved in the proposed TDR sale must meet the following criteria: 1) the portion to
be deed-restricted shall contain at least fifty percent prime agricultural soils, 2) the acreage to be
restricted shall be contiguous and of general, regular configuration approved by the Board of
Commissioners, and 3) the portion of the parcel which will not be restricted shall be usable under

the use, area, dimensional, performance and other standards of the TDR Ordinance.

Receiving Areas
The receiving areas for Manheim Township are comprised of R-1 and R-2 Residential
Zoning Districts. Candidate receiving parcels must be five acres or more. Within the receiving

area the acquisition of one development right translates into one additional dwelling unit. In the
Chapter 8

234
R-l District, densities can increase by thirty percent with TDR use and by eighty-one percent

with TDR combined with clustering. The clustering option is administered through a bonus
density overlay. Within the R-l District, the Base Density is 1.6 DU/Acre, the Density with
TDRs is 2.2 DU/Acre and the density within the Bonus Density Overlay Areas with TDRs is 2.9
DU/Acre. In the R—2 District densities can increase by forty-five percent with TDR use and by
115% with TDR combined with clustering. Within the R-2 District, the Base Density is 2.0
DU/Acre, the Density with TDRs is 2.9 DU/Acre and the density within the Bonus Density

Overlay Areas with TDRs is 4.3 DU/Acre.

To calculate the TDR capacity of the receiving areas, the number of acres in both R-l
zone and R-2 zone were calculated. The difference between the maximum development density
and the base density in the particular zone is then multiplied by the acres in that zone. As
adopted by ordinance, the total additional dwelling units allowed in the receiving area through

TDR use is 2,267. (See Table 8-3)

Table 8-3 : Receiving Area Acreage and Capacity

 

 

 

Acres TDR Capacity

R-l Residential (1322.2)
Area without Bonus Density Overlay 1017.1 610
Area with Bonus Density Overlay 305.1 397
Additional D.U.s in R-l 1007

R-2 Residential (1077.4)
Area without Bonus Density Overlay 870.6 784
Area with Bonus Density Overlay 206.8 476
Additional D.U.s in R-2 1260
Total Additional D.U.s in Receivflg Areas 2267

 

Chapter 8

235

There was original program opposition regarding receiving areas due to curiosity.
Residents and developers were curious about what was going to happen in the receiving areas. In
response the township engaged in outreach with displays, presentations and discussions that
resulted in the elimination of the opposition. Jeff Butler, the Manheim Township Planner,
realizes that this does not necessarily mean opposition is permanently gone. He recognizes that
opposition may arise again when the TDR transactions take place and when the development
actually occurs. This highlights the fact that timing is critical to TDR programming. The type of
opposition, and how to address it, depends on when it occurs. Additionally, avoiding opposition

at one phase of TDR programming may result in opposition at later phases.

The bonus-density overlay involved the identification of selected tracts of land that lend
themselves well to higher density and cluster development. By merging them, the township
would allow developers to purchase above the 37.5% for R-1 and the 45% for R—2 to eighty-one
percent for R-land 115% for R-2 of the underlying density, provided that the development uses
the township’s cluster option. The township analyzed the infrastructure and resources
surrounding the selected tracts of land. Examples include one parcel next to a park, and another
next to a wetland. These were areas that lend themselves to high-density attached housing and
the provision of open space without sacrificing the overall density of the tract. If TDR represents
a bonus with a cap, for selected tracts the cap is raised with the use of the clustering option. The
underlying density is not regulated by ordinance; rather, it is realized through actual site
application. A likely maximum density is 1.6 dwelling units per acre because of infrastructure
and stormwater management requirements. Developers can buy up to 2.2 dwelling units per acre
with reduction of lot sizes and get up to 2.9 dwelling units per acre with bonus-density overlay.
To determine base density, developers must submit a sketch plan showing the underlying zoning

and the number of units projected. This will reveal the real density.

Chapter 8

236

The incentive to use TDRs in Manheim Township is increased density without rezonings.
While it has been reported that the Manheim Township TDR program does not offer any other
incentive beyond an additional dwelling unit per development right up to the parcels zoning
limits, anecdotal evidence suggests another incentive, the ‘streamlining of the approval process’
for the developer using TDRs. The ability of a developer to move the development proposal
through the township’s streamlined approval process in this cooperative atmosphere is
particularly valuable to the developer (Brandywine 1997 p.44). This incentive should not be
underestimated. Currently, the township is investigating the use of another incentive, namely
credits toward impact fees for developers who use TDRs. Township officials feel that this

incentive is both equitable and understandable, two key factors in encouraging TDR use.

Allocation Method

Development rights are allocated based on acreage and previous zoning. The previous
zoning was residential; however, there was no infrastructure and therefore resulting densities
were low, approximately .73 dwelling units per acre. Therefore, the allocation rate is .73 TDRs
per net acre. Rights-of-way, easements and deed restrictions are deducted from a parcel’s gross
acreage to determine net acreage. After the number of acres qualifying is multiplied by .73, the
number of dwelling units that exist on the eligible tract are subtracted. Any fraction of a

development right is equal to one development right.

The program is cited as having “considerable incentive structured into the system on the
Sending Zone side.” (Brandywine Report 1997 p.40) This incentive is the generous allocation of
development rights, so the cost of development rights is kept relatively low. For example, under
conventional zoning a one-hundred acre parcel would yield five lots for subdivision. However,
this same parcel may yield seventy-three development rights, thus providing the sending-area

landowner with a great incentive to sell development rights at relatively low cost. By keeping the
Chapter 8

237
development right cost low, demand is strengthened. A lesson learned from Buckingham

Township is that this type of sending side driven TDR program may not work. The cost of the
development right is dependent on what any additional units within the receiving zone will yield

to the developer, not on the supply of TDRs.

While some TDR programs which only credit prime farmland in their allocation method,
Manheim Township discovered there was a cost to this allocation method. Programs that
allocated TDRs based on prime farmland often deduct wetlands and undevelopable land.
Questions that must be addressed include who pays and what wetland and developable land
definitions are used. Manheim Township decided to allocate TDRs in the simplest way possible.
Any recorded easement, such as a power line across the farmland, is deducted because a

landowner cannot develop on an easement.

The township went a step further and performed a title search on every property in the
agricultural district and determined how many development rights would be allocated under this
formula for the entire agricultural district. Approximately 1400 rights were calculated. Manheim
Township then sent letters to all agricultural-district property owners indicating their TDR
allocation based on the TDR ordinance criteria and calculations. Additionally, the letter informed
landowners that a title search had been performed. A property owner could sell or transfer the
number of rights (calculated by the township) without any additional documentation beyond the
township letter. If property owners disagreed with the township calculation, they needed further

documentation at their own expense, including survey and title search.

Chapter 8

23 8
Transfer Procedure

Development rights are conveyed by a Deed of Transferable Development Rights that is
recorded in the Office of the Lancaster County Recorder of Deeds and indicates the number of
development rights available. This deed severs the development rights from the sending tract and
specifies the tract of land within the receiving district to which the rights shall be permanently
attached; otherwise, the rights shall be transferred to the township, the owner of the sending tract,
or another party. The deed is accompanied by a Declaration of Restriction of Development, a
conservation easement, that permanently restricts development of the sending parcel or the
portion of the parcel from which the rights were severed. The declaration designates the
township as a third-party beneficiary of the restrictions and therefore the restrictions are
enforceable by the township. This declaration is also recorded in the Office of the Recorder of
Deeds at the same time or prior to the deed of transferable development rights. All deeds must

be endorsed by the township prior to recording.

The TDR transfer procedure begins when a landowner sends a letter to the township
requesting allocation. The township then references the township letter indicating title search and
TDR allocation. The township’s zoning officer determines the number of development rights that
can be severed and, if the development rights are transferred from less than the entire parcel, the
sufficiency of the plan indicating the portion of the sending tract restricted from firture

development.

Once the sending-area landowner and any potential TDR purchaser are informed of the
determination they may present the township with the Deed of Transferable Development Rights
for endorsement. This deed will not be endorsed until the township is presented with evidence

that the declaration of restriction of development has been approved and recorded.

Chapter 8

239

Ifthe TDRs are to be immediately attached to a receiving parcel, preliminary plan
approval for the development utilizing the TDRs must be obtained before the deed of transferable
development rights is recorded. If the TDRs are to be retained by the sending landowner or are to
be transferred in gross, the deed of transferable development rights may be recorded at any time

after the recording of the declaration of restriction of development.

On the receiving side, a sketch plan is submitted to the township to determine the base
density of the property to be developed. This plan is designed in accordance with the township’s
Subdivision and Land Development Ordinance and the underlying zoning-district regulations. A
developer requests to utilize TDRs through the preliminary subdivision process, submitting a
preliminary plan for the proposed development using TDRs. This plan indicates the base density
of the property, the proposed density of the development, the number of additional development
rights transferred or to be transferred and whether the tract to be developed is located within a

bonus-density overlay.

The developer must also submit an application for apportionment and transfer of
development rights that includes signatures from both the transferor and the transferee. Ifthe
TDRs to be used have been previously apportioned and severed from the sending tract, a copy of
the deed of transferable development rights, the declaration of restriction of development and a
title search must be included. A title search of the rights identified in the deed of transferable
development rights sufficient to determine all of the owners of the development rights and lien
holders, must also be provided. The title search determines the owners of the tract, shows all

liens and demonstrates that the development rights are still held.

Chapter 8

240
A developer must submit an agreement of sale for the TDRs. This agreement may be

contingent upon conditional use approval or approval of a final subdivision or land-development
plan. The developer must also submit a metes-and-bounds description of the property from
which the TDRs will be transferred and survey indicating total acreage of the sending owner’s

property, easements, restrictions and any land utilized for non-agricultural use.

If the agreement of TDR sale entails less than an entire parcel, the developer submits a
plan of the entire parcel indicating clearly the portion of the parcel from which the TDRs are
transferred. This plan includes: a notation of the number of development rights applicable to the
entire parcel, the number of development rights applicable to the identified parcel portion from

which the TDRs are to be transferred, and the number of TDRs that remain.

No final plan for any development that utilizes TDRs can be executed until the township
has been presented with a copy of the recorded deed of transferable development rights and the
recorded declaration of restriction of development. However, the fully executed declaration of
restriction of development may be presented to the township with the deed of transferable
development rights for endorsement, and the township, at the applicant’s expense, can record and

execute both documents and record the final plan.

The current system functions well for developers. They come in with a sketch plan for a
property, and the township reviews all the possible scenarios, including development with TDRs.
If developers feel that they cannot find any development rights or that sending-area landowners
want too much for them because the township actually has TDRs, it can offer accessibility to
TDRs. This was precisely the case with the Brighton development. Here, the township
convinced a developer who had no intention of participating in the TDR program to utilize the

TDR option with the assurance that township-acquired TDRs would be available for sale and use.

Chapter 8

241
TDR in Suite

Manheim Township’s commitment to growth management commitment was initiated in
1987. Impact fees, cluster development, planned residential development (PRD) and agricultural
zoning are four other policies that work in concert with TDR, each strengthening the
effectiveness of the others. Cluster development, introduced in 1989, works directly with the
township TDR program through the bonus- density overlay option. This option allows
developers to achieve the highest residential densities as long as TDRs and clustering are utilized.
PRD is a non—traditional type of development. It involves a parcel of land controlled by a
landowner, to be developed as a single entity for a number of dwelling units or combination of
residential and non-residential uses. Under PRD, the development plan does not have to conform
to zoning regulations in any one residential district. TDRs can be used effectively in PRD
developments. (See Table 8-4) To help control the effects of growth on agricultural lands the
township initiated agricultural zoning in 1989. This ensured that a critical mass of farmland was

preserved rather than a piecemeal approach.

Manheim’s growth management and preservation policies are complementary and
supportive of countywide policies. A relationship between the County Agricultural Lands
Preservation Program and the township’s agricultural-land preservation efforts is evident in
County PDR purchases. Additionally, Lancaster County adopted a Pol icy Plan and a Growth
Management Plan. The Policy Plan lays the foundation of the overall County Comprehensive
Plan including goals, objectives, and a vision of the county’s future. The primary focus of the
policy plan is to develop a way to achieve balance between the county’s urban centers and rural
areas. This would require changing the location and pattern of development and enhancing the
agricultural economy. The policy plan proposes that future growth be directed to urban areas

where sufficient infrastructure exists. An important component of this policy is the designation

Chapter 8

242

of urban growth boundaries (UGAs). This policy component adds credibility and support to the

Manheim Township TDR program. Characteristics of the county UGAs parallel township

characteristics of viable receiving areas.

Table 8-4: Value Added by a PRD versus a Traditional Development

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PRD Traditional

Developed Land Market Value

90 detached 20,000 sq.ft. lots @ $65,000 5,850,000

41 detached 12,000 sq.ft. lots @ $50,000 2,050,000

66 Zero lot line 5,000 sq.ft. lots @ $33,000 2,178,000

45 Townhouse lots @ $25,000 1,125,000

Commercial land value @ $20/sq.ft. of floor area 468,000
Gross develgrment value 5,821,000 5,850,000
Less Cost
Sales cost (7%) 436,757 438,750
Raw land and related cost 1,500,000 1,500,000
Develcmment cost 2,3 10,600 1,847,200
40 TDR purchase @S2,500 100,000
Value created by development 1,482,825 2,064,050
Absorption period 6 years 9 years
Present value @ 9% 1,108,639 1,374,943

 

 

 

 

 

* includes erosion/sediment control, stormwater management, water distribution, sanitary sewer,
roads, curbs, sidewalks, landscaping, lighting and other.

Source: Manheim Township Information sheet 6/22/94

The Growth Management Plan illustrates how the county’s vision for its future can be
achieved. This plan identifies areas appropriate for urban growth and areas appropriate for
agriculture, natural resources, and rural uses. The purpose of the plan is to provide a process for
municipal officials to follow in guiding and influencing the pattern, location, and timing of
growth in their municipalities (Manheim Township 1995 p.75). The benefits associated with
UGAs are similar to the benefits associated with the township’s TDR program, including
preservation of community character, controlling sprawl, preservation of agricultural lands,

predictability in capital improvements planning, tax savings in the efficient provision of public

Chapter 8

243
services, and revitalization of urban areas (Manheim Township 1995 p.76). Additionally,

Manheim Township has already coordinated efforts with the county to delineate an urban growth
boundary, given that much of the township is within the Lancaster UGA. Lancaster County and
Manheim Township have cooperated to form an urban growth boundary. Although under
Pennsylvania law such boundaries are not legally binding between township and county, the
boundaries have been incorporated by townships in their comprehensive plans and zoning
ordinances (Daniels and Bowers 1997 p.141). Furthermore, Manheim Township has identified
Village Growth Boundaries in the 1995 Comprehensive Plan. Similar to UGAs, Village Growth

Boundaries direct future rural development into existing village communities.

Bank

While a TDR bank does not exist in Manheim Township, a firnd set-aside for TDR
purchases does exist. In fact, the township has purchased and sold development rights with these
funds. The township has a line-item in its budget of $150,000 a year in general funds to purchase
development rights. It has had success in getting this funding every year. Additionally, the
township has been able to negotiate contributions from developers to supplement the public firnd.

Rather than having a formal bank, the township plays an active role in the TDR market.

Status

Manheim Township began to purchase development rights in 1992 in response to
proposed developments on significant farms. In total, 124 development rights have been
purchased to date at a cost ranging from $3,000 to $7,300 per right. The township is currently
negotiating with two additional landowners for the purchase of one-hundred more rights
(Brandywine Report 1997 p. 34, Butler 1997). The township has an agreement of sale for forty

rights, of which it has closed on four, to be used in the Brighton mixed-use development.

Chapter 8

244

The Millfield Construction Company was the first developer to purchase and use
development rights. Millfield bought TDRs from the township at a cost of $5,500 per
development right. The rights are to be utilized in the Brighton development where ninety half-
acre lots would have been permitted under conventional zoning. With TDR, 150 lots of varying
types and approximately 20,000 sq. ft of neighborhood commercial development have been
approved in a type of neo-traditional configuration. Only four development rights have actually

been purchased for the first phase of the project.

Manheim Township discovered that it was more challenging to sell the rights than it
expected. There are people interested in buying TDRs; however, under the first-class township
code, Manheim Township must hold an auction to transfer real estate. An auction makes selling
development rights more cumbersome than expected. Furthermore, the Township Board has been
inflexible with the selling price, which is determined by what the township purchased the rights

for. On average, it paid $5,500 per right. This has set the floor auction price.

There have been no private-market sales. A number have been quite close, but at this
point none have happened. One reason for this is price. Developers are just not willing to pay
the price sending landowners are expecting. Compounding developer reluctance is the fact that
sending landowners probably have unrealistic expectations of TDR price. What is going to drive
purchases and transfers of TDRs is the market. Butler believes it is a matter of time, stating that
“the township is seeing more activity. In particular the type of development that can
accommodate TDRs is occurring more and more.” There is greater demand for higher density
development in Manheim Township. Township officials anticipate that once the Brighton

townhouse development is completed and occupied, the township will see more demand for that

Chapter 8

 

245
type of development. As of September 1997, one home in Brighton had been sold. People are

interested in the Brighton development; they are just not taking the final step and purchasing.

Manheim Township is active in the development-right market and it is anticipated that
this will continue year to year. The township is currently negotiating with two property owners
for the purchase of additional TDRs. Furthermore, the township is working with the county and a
400-acre farm that stretches across three municipalities, including Manheim. These groups are
working to preserve the farm through the purchase of twenty development rights. Manheim
Township also has an agreement with a farm for twenty-six of its thirty-two development rights.
Butler believes there will be opportunities for Manheim Township to purchase TDRs every year.
There will always be farmland owners who will initiate negotiations with the township due to
their interest in selling their development rights. This interest, combined with uncertainty in
selling to developers or waiting for an offer from a developer, place the township in an active
role. The township will always want to play the role of purchaser of last resort; however, it does
not want to be in the sole purchaser position forever (Butler 1997). Manheim officials hope this
role as purchaser of last result is also functioning as a catalyst for jump-starting the TDR private
market. The township hopes that Brighton will demonstrate the success of transferring rights, and

will therefore provide the impetus for the private TDR market.

TDR sellers in Manheim Township cannot be characterized. Township has completed
three transactions and is currently negotiating two others. Each transaction represents a different
scenario. The first transaction was very complicated. It involved a developer who owned the
farm but was trading it for another farm in the growth area. To make the trade financially
feasible, the farmer wanted to unload the development rights before he traded the farm to an
Amish farmer. The second transaction, which was the largest, involved a one hundred acre farm.

This farm owner also owned a separate ten acre parcel with a large poultry operation. This

Chapter 8

246

transaction involved a landowner and son who were locked into the land. They sold the majority
of rights to the township and donated some rights to a Mennonite Foundation. In turn the

Foundation sold the donated rights to the township.

Of the two transactions the township is currently negotiating, one includes an estate. The
children of the estate have no interest in living on the land nor any interest in retaining ownership.
They want to sell the land but are not getting their desired price. In response, they plan to
separate the rights and then sell the land. The final pending transaction involves a 400-acre farm
where the owner is trying to preserve as much of the farm as possible in memory of her husband.
All parties have their own takes on why they are involved with the program - it is really across

the board. (Butler 1997). This was the case in Calvert County as well.

Program Future

The main program future consideration is what role the township will play. Currently the
township has played many roles: program designer, initiator, TDR purchaser and facilitator. Its
role has been critical, particularly since it is the only active purchaser of TDRs. If a private TDR
market arises, the township must address whether it should continue as an active marketer. The
township must also address whether it should lower its TDR price. Butler hopes that the
Township Board will make a conscious decision to hold onto development rights forever, and
avoid competing with sending-property landowners, in effect making the TDR program a PDR
program. This would not preclude the continuation of the private TDR market, just the role of the

township as a competitor in TDR sales.

Chapter 8

247
Success

Manheim Township’s TDR program is relatively young. The first transaction in 1992
directly involving the township occurred one year after the program began. The five years since
that time have seen limited use of the TDR program. While limited TDRs have been purchased
from sending area landowners, the number of TDRs utilized in developments is even more
limited, namely four. The success of the Brighton development and the use of the four TDRs in
its first phase will be important to the overall long-term success of Manheim’s TDR program. It
appears that the township’s TDR program has a great deal riding on this innovative development.
By showcasing this development as a TDR development, and in being the only development to
use TDRs, its success or failure has the potential to either gain widespread developer support for
TDRs or defeat the TDR program single handedly. While it may be too early to assess the
programs success, lessons can be learned from Manheim’s program. Of particular interest is what

role the township has played and how this either enhances or limits TDR activities.

Applying the Index to the Program

Manheim Township has developed its own set of elements for a successful TDR
program. These elements, which compare well with this study’s TDR index, include:

o Simplicity of township, developer and citizens - Program needs to be fairly easy to
understand and administer.

o Municipality must be genuinely interested in growth management and active in
innovative planning and zoning issues and not intending the TDR program to stop
growth.

0 The community interested in preparing a TDR program must be experiencing growth
pressures due to things such as location, ability to provide services and quality of the
community.

0 The program needs adequate incentives for developers to utilize the program.

Chapter 8

248

o The designated receiving areas need strategies and methods to address compatibility
with existing development and lessen potential impacts.

0 The community needs political leadership and willingness to utilize new techniques
and be able to relate ideas to citizens.

0 Community needs a staff with the ability to support the program, deal with

developers, landowners and citizens through education and administration.

Foundation for TDR

Although Pennsylvania has enabling legislation for TDRs under the Municipalities
Planning Code, the legislation and administrative foundation for TDR in Manheim is weak. One
hypothesis is that the lack of a foundation for TDR in Manheim Township has contributed to its
limited use. While Manheim Township was implementing new and innovative planning
techniques such as the TDR, the Planned Residential Development (PRD) and impact fees,
nothing was reflected in the Comprehensive Plan. If the comprehensive plan had been brought up
to speed before TDR was adopted, perhaps the TDR program would have seen greater activity.

In actuality, the Comprehensive Plan was not updated until four years after TDR adoption.

Regulatory Process Must Have Sufficient Integrity

Manheim Township is genuinely interested in agricultural preservation and growth
management. This is evidenced in its Comprehensive Plan, through joint actions with the county
in implementing the urban growth boundary concept, enactment of impact fees and efforts to
establish an agricultural district. The township does not perceive TDR as a mechanism that alone
can preserve agricultural lands and stop growth. In fact, Manheim designed and implemented its
TDR program as part of an overall land use policy. They did not want growth management to
rely on the success or failure of the TDR program. Rather, they designed the TDR program in
such as way that if it did not succeed, it would not be counterproductive to growth management

and agricultural preservation.

Chapter 8

249
Sense of Place

A Manheim official reported that a sense of place exists on both ends of the TDR
program. Additionally, this official reported that Manheim Township does have a strong
township identification. However, the sense of place is related to sending area more than the
receiving area. This imbalance may be another contributing factor to the limited use of TDRs in
the receiving areas. The program may not yet be perceived as a township-wide integrated
program. Rather it is perceived as two separate programs, a preservation program and a growth
management program. As the program is now being implemented, it appears only municipal
officials identify a sense of place that encompasses the entire township. This may explain why
the township is currently the only buyer of TDRs fi'om sending-area landowners and the only

seller of TDRs to developers.

Resource Perceived as Valuable

Agricultural land in Manheim Township is considered a valuable resource, and residents
have clearly stated their desire to preserve it for the use and enjoyment of future generations
(Manheim Township 1995 p. 93). The agricultural resource was perceived as valuable from both
an economic and aesthetic perspective. From the township commissioner’s point of view the
program addressed agricultural viability. Agricultural land was viewed as an economic resource
for the township and county. However, support from landowners and from the growth area is in
part due to valuing rural character and limited growth. Agricultural land was worthy of protection
not because it was an important part of the township’s economy, but rather because it contributed
to the township’s niral character and provided open space. Despite the diminishing size of the
farming industry in the township, largely due to the conversion of agricultural lands to non-
agricultural uses, Manheim’s agricultural heritage and identity are still evident and recognized by
residents. They appreciate, respect and desire to retain the township’s rural character (Manheim

Township 1995 p. 93).
Chapter 8

250
Rapidly Growing Area

Growth pressure does exist in Manheim Township given its proximity to the City of
Lancaster, the availability of infrastructure and its quality of community. Manheim has issued
approximately 200 building permits per year for the past several years (Brandywine p.32 1997).
However, Manheim Township’s growth rate from 1980 to 1990 is significantly less than previous
decades. This may account for the TDR program’s slow start in utilizing TDRs. Manheim’s
program may be viewed as successful in that TDRs have been purchased from landowners in the
agricultural reserve, however it may also be viewed as unsuccessful given that only four TDRs
have been actualized in development. In order for the program to be successful over time, the
TDRs must be utilized in receiving areas. Given the township’s decrease in growth rate, the

township may have to consider additional incentives for TDR use beyond increased density.

Another issue highlighted by the Manheim program is the concept of relative growth. If
growth is what creates the TDR market, regional growth trends need to be investigated. While
Manheim is still experiencing growth, surrounding townships are experiencing stronger growth.
TDRs will be most marketable in areas where the growth rate is greatest. TDR programmers in

Manheim need to understand regional development demands and patterns.

Understanding of Development Demands and Patterns

Into the early 19905, the township housing market was dominated by single-family
detached. In 1990, single-family units comprised 79.8% of the township’s housing, while less
than twenty percent were multi-family units. This trend, combined with the availability of
undeveloped land in the township (thirty-six percent) may be another reason why Manheim
Township is having difficulty in marketing TDRs to developers. Because receiving areas are an

R-l or R-2 zone, the pattern of development was not as important to the design of the Manheim

Chapter 8

251
TDR program. However, appropriate location of these zones is important to effective land use

planning. Perhaps the township could gain better understanding of the development pattern to

better structure TDR incentives. As it stands, the market, as yet undeveloped, is theoretically the

driving force.
Viable Receiving Areas

Virtually all of Manheim Township has available public water and sewer service with
sufficient capacity to accommodate additional growth. While this means that receiving areas are
physically feasible, it also means that preserving low densities is more challenging. Additionally,
because Manheim designated all R-1 and R-2 zones as receiving areas, the use did not change
with or without TDRs. For this reason, Manheim’s receiving areas are also politically acceptable.
This acceptance may be questioned if densities to be achieved with TDRs far exceed base or
existing adjacent densities. However, as of yet, the bonus density overlay has not been utilized,
nor does it appear to promote development. This is because densities achieved under base zoning
and with the cluster option are sufficiently high to meet housing market demand at this time.
While this eschews a receiving-area controversy, it weakens the TDR market. The question
remains whether Manheim’s receiving areas are viable from a market standpoint. The lack of
activity with the Brighton development and the lack of TDR sales to developers suggests that

they may not be viable.

Public Support

Public education played an important role in the TDR planning process, including the
development of the zoning ordinance. The township provided information with the goal of
acquiring public support. Public education surrounding the receiving areas is important to the
program. Because receiving areas were an unknown to citizens, the township used displays and

discussions to clarify what receiving areas and their effects were. Once this was done, opposition

Chapter 8

252

to receiving areas was eliminated. However, that opposition may arise again as developers
attempt to realize TDR densities. While the builders and developers did not oppose the
downzoning or TDR program, the landowners in the agricultural district did initially oppose the
downzoning. It was their opposition that introduced the TDR concept. Public support for the
TDR program increased when landowners learned that TDRs were an alternative or an option.
The agricultural community supported the program when it learned that TDRs meant farmers
could get some return without having to sell the land. While public education was an important
part of the planning process before TDR program initiation, it became a less important part in
program implementation. This may explain why TDR was adopted but has seen limited activity
since its inception. There is a direct correlation between public education and municipal
commitment to education and public acceptance and understanding, without which TDR program

can not succeed.

Political Leadership

Manheim Township has exhibited political leadership and willingness to utilize the TDR
technique to preserve agricultural lands. It is critical to the Manheim program. The Board of
Commissioners was the first to exhibit this leadership. In 1990 the commissioners made a

decision to commit to an agricultural district. While the downzoning was a conscious decision,

the TDR was a sidelight to the downzoning (Butler 1997).

The township has also played an active leadership role in working with a developer to
utilize the technique to direct growth to receiving areas. However, the township’s planning
office, which administers the TDR program, has numerous responsibilities and has been limited
in its leadership role in educating the community. This is not a criticism, just a reality. Manheim

Township may not have the resources to support the program, deal with developers, landowners

Chapter 8

253

and citizens. Policitical leadership and commitment are particularly important in the inaugural

years of a program.

Mandatory versus Voluntary

The program is voluntary in that it is voluntary for a person to sell TDRs and it is also
voluntary for a person to use TDRs on receiving sites. The state enabling legislation says
“voluntary use of TDRs”. In reality, the sending area is mandatory, because they downzoned.
The sending area landowners, if they want any return, are going to sell their development rights.
In Manheim Township the only way a landowner gets a return on the sending area is through the
sale of TDRs. Because the underlying zoning is one dwelling unit per twenty acres, and most
farms within the agricultural district are smaller than one hundred acres - there are only one or

two farms at one hundred acres — there are only a small number of lots that can be built on.

Manheim Township was creative in its program design and implementation, blurring the
line between mandatory and voluntary to its advantage. Because downzoning was not part of the
1991 TDR ordinance, it is by definition voluntary. By promoting its program as voluntary it
minimized opposition. However, the sending area was downzoned through the previous 1989
zoning ordinance, and therefore the program is a de facto mandatory program. Similarly the
receiving area was downzoned, but not as part of the TDR program. The receiving zone had
been substantially downzoned prior to TDR program adoption, such that development rights
transfer basically resulted in a continuation of pre-TDR development densities. Again, this
served to minimize any sort of NIMBYism by landowners in areas adjacent to potential receiving

parcels (Brandywine 1997 p.45).

Chapter 8

254
TDR Bank

Manheim Township does not have a formal TDR bank. Instead the township has a line
item in its budget to purchase development rights. The township has been successful in acquiring
these funds every year. Developers have contributed supplementary funds. The township has
purchased and sold development rights with these funds. Township officials felt they could not
implement a formal TDR bank similar to the Pinelands bank or Montgomery County’s bank. The
township does not have the legislative authority, nor does it have the staff resources to implement

a formal bank.

PDR/T DR Linkages

Although Manheim Township does not have a municipal PDR program, discussions of
the possibility of retiring township-purchased TDRs indicates a township PDR program may be
in the firture. A county PDR program does exist. Conservation easements are either held by
Lancaster Farmland Trust or the Lancaster County Agricultural Preserve Board. In 1996, the
total acreage under conservation easement in Manheim Township was 188. Currently, Manheim
Township is coordinating efforts with adjacent townships and the County to purchase

development rights through both PDR and TDR from a 400-acre farm.

Simple and Cost-Efficient

Regarding simplicity, the Manheim TDR program has seen success. The program is easy
to understand and administer. TDR allocation began with the township completing a title search
and telling sending-area landowners the number of TDRs to which they were entitled. By placing
the impetus of TDR program initiation on the township, the program is simplified for sending
area landowners. These landowners simply have to present the township letter to receive TDR

allocation.

Chapter 8

255

Additionally, the program is kept simple through the use of the agricultural district as the
sending area and all R-1 and R-2 zones as receiving areas. Manheim utilized familiar planning
concepts, thereby eliminating some of the complexity of TDR programming. Manheim’s TDR
allocation formula was also kept simple, .73 TDRs per net acre. Butler agrees that simplicity is

best.

Chapter 8

Chapter 9

Montgomery County Case Study

Program Area Description

Montgomery County is located northwest of the District of Columbia between the
Potomac and Patuxent rivers. The county’s population in 1994 was 795,600 on an area of 316,
800 acres. This population shows a substantial increase from its 1980 population of 573,421.

The county has been successtmodating growth and avoiding subuflaflinmmhile

 

 

tect' 'tsf 1d '1 dB l80.Th ' ' f ral,
pro mgr arrnan resources (Dame sWW) ecountyrsamrxo ru

 

including fourteen townships and urban areas including the municipalities of Gaithersburg,
Bethesda, Chevy Chase, Rockville, Takoma Park and Silver Spring. The number of housing units
in the county in 1994 was 299,300, of which nearly fifty-three percent (157,000) were single-
family detached homes. The number of housing units in 1995 increased to 314,700, representing
a five percent increase in a single year. The median housing sale price in 1995 for new homes
was $343,783 for single-family detached and $199,605 for single-family attached. The median
household income in 1993 was $59,085, and in 1996 was $64,791. With population projections
of 855,000 in the year 2000 and 945,000 in 2010, Montgomery County must address whether its
agricultural preservation efforts are sufficient to accommodate this projected grth while

sustaining the county’s agricultural resource and rural character.

Planning History

Prior to the 19505, Montgomery County was characterized by farmland, but due to

development pressure and associated increase in land prices and land speculation, farmland gave

256

257
way to suburbanization. In the 19605, nearly one-half of the farmland moved to non-farm

ownership. During the 1970s the county lost eighteen percent of its agricultural land to urban
uses (Maryland-National Capital Park and Planning Commission (MN CPPC) 1980, p. 12-24).
Despite the urbanization trend the area continues to have a rural presence. Rural areas of the
county are in demand for those seeking rural estates of five to ten acres. This demand presents
direct competition for farmers, who are excluded from the rural land rmrket due to the high price
per acre that rural estates create. As more people seek suburban and rural environments in
Montgomery County, land prices increase beyond their use value in agriculture (MN CPPC 1980
p. 10). This pressure to urbanize creates conflict with the county’s agricultural community,

which contributes 283 million dollars to the county’s economy on an annual basis (Criss 1997).

Montgomery County’s growth pattern, a suburban ring around DC with developed
corridors linking urban communities, is a direct result of efforts to avoid urban sprawl. In 1964,

the Maryland-National Capital Park and Planning Commission, a bi-county planning agency for

fl.-

 

Montgomery and Prince Georges counties, adopted the “Wedges and Corridors Plan,”

f M _

 

emphasizing the preservation of “wedge” areas of very low rural density and open space. High-
density urban uses were to be concentrated along major roadways. In 1969, the county council
approved this plan. Because this plan presented a clear land use pattem, subsequent growth

management systems continued to be linked to the original plan (T ustian 1983 p. 64).

In 1974, in response to increased development pressure on open space, the county council
approved the downzoning of areas within the wedges to “rural zones.” While the wedges
originally permitted one to two acre residential development, the rural zone permitted one
residential development per five acres. However, the rural zone, which was placed on nearly one-

third of the county, failed to deter the sprawl of residential development on the rural lands.

Chapter 9

258
In 1979, as exurban development pressures continued to gain strength, the Montgomery

County Council posed a one-year moratorium in specific areas on the subdivision of parcels into
lots less than twenty-five acres. At the same time, they prepared a plan to preserve agriculture
while recognizing public sector costs. The county considered three options: buy the land, zone
the land or strike a compromise between the two. While buying the land was financially limiting
and contrary to the state’s agricultural districting program, downzoning the land for a second time

in five years was viewed as politically and publicly unacceptable. A compromise was needed.

The compromise involved downzoning to prevent the fragmentation of the land,
combined with a method to compensate landowners for atleast part of the resultant loss in land
value. TDR offered such a method, and thus Montgomery County initiated its TDR program in

1980 (MNCPPC 1992; Heiberg 1991 p. 34).

Regulatory Authority

At the time Montgomery County initiated its TDR program it did not have specific
enabling legislation. Furthermore, when the program was structured, special state enabling
legislation was not sought. Rather, the TDR process was linked to planning practices that had
legal authority and were politically acceptable, namely existing zoning ordinances and the
subdivision approval process. For example, through the Moderately Priced Dwelling Unit
(MPDU) ordinance, the county had already transferred density and permitted density increases

dating back to 1974.

While the legality of TDR absent enabling legislation was never challenged, the issue
was essentially removed in 1982 when the state passed enabling legislation for all counties and

specifically included Montgomery County. The impetus for the 1982 legislation was

Chapter 9

259
contemplation of TDR use by a number of other jurisdictions. In one legislative act, the state,

desiring to make TDR prograrruning explicit, passed state enabling legislation for virtually all the
counties. Montgomery and Prince Georges counties are under article 28 of the state code, while
article 66b governs the vast majority of charter counties. Additionally, the Maryland office of
state planning is a supporter of TDR programming, encouraging other jurisdictions to initiate a

program.

Program Initiation

Montgomery’s TDR program is administered through zoning and master plans, and
therefore its legal basis at the time the program was implemented fell under the police power.
While all local jurisdictions have the authority to zone, Montgomery is the only county in
Maryland that has a very comprehensive master-plan process. Montgomery County is divided
into twenty-three separate master plan policy areas. The master plans for these legislative

boundary areas are reviewed and updated every five to ten years.

The functional master plan for the Agricultural Reserve, one of the 23 policy areas, was
adopted in October 1980. The Functional Master Plan for the Preservation of Agricultural and
Rural Open Space (the Plan) was the first comprehensive plan for the preservation of agriculture
and rural open space tied to an established countywide growth management program (Maryland-
National Capital Park & Planning Commission 1980 p.i). The opinion that adequate room for
both development and agriculture in Montgomery County existed is found throughout the Plan.
The Plan discusses agricultural preservation alternatives and recommends a comprehensive
program that is structured around the concept of the transfer of development rights. This Master
Plan was the legislative document that created the Residential Density Transfer (RDT') zone and

the legal ability to have TDRs. What followed that Master Plan was a county ordinance and a

Chapter 9

’4

260
county code that specified the purpose of the RDT zone. This identified the TDR mechanism (the

TDR transferance precedure) and allowed the county to implement TDR programming through

zoning and master plans.

Agricultural Reserve was determined to be the critical mass of agricultural land needed for a

Originally, the Plan designated an “Agricultural Reserve” of 110,000 acres. The

viable farming industry. Lands in the Agricultural Reserve had and continue to demonstrate a
long history of agricultural use and are practically and spatially related to form a critical mass of
productive farmland (MNCPPC 1980 p. 41). The critical mass was based on a clustered network
of land active in farming and farming-related industries and network interstices of fallow land,

forest area and public park lands (T ustian 1983 p.67).

Before the adoption of the county TDR program, Montgomery initiated a closed pilot
program in the Olney community, a rural region located in the east-central part of the county. The
1980 Olney Master Plan served as a prototype to better understand the TDR concept in both the
Master Plan and Zoning Ordinance text-amendment processes. This assisted county efforts to
educate and convince residents that a TDR program could indeed work. The Olney pilot program
was in effect for approximately nine months before the TDR program was expanded county-wide

(Siemon et al. 1996 p.32).

The Olney pilot program was very encouraging. There was a great deal of receiving
capacity in terms of densities and relatively small number of properties with potential TDRs
available. As a result, TDRs started selling in the Olney program for approximately $10,000.
The farmers sat back and watched the developers compete for the TDRs and waited for the
highest price. It was developer fiustration with the high TDR price that resulted in the suit

against the county. Until the courts ruled that Olney had to function as part of the county-wide
Chapter 9

261
TDR program, TDRs were selling for $15,000. Meanwhile there were farmers outside of Olney

who would have been willing to sell their TDRs for $4,000 to $5,000. They too were frustrated,
in their case by the inability to sell TDRs for the same $15,000 price that farmers in the closed
Olney system were receiving. In short, the closed-market system created expectations and in turn
problems. For this reason, it may be argued that jurisdictions interested in implementing a TDR

program should be sensitive to the issues that arise with a pilot program (Criss 1997).

While there was a benefit to implementing a pilot program, namely to demonstrate TDR
success, the economies that it created - the supply and demand equation - resulted in a continual
problem and distrust in TDR pricing and selling. Rather than the a pilot program causing the
problem, perhaps it was the intention to keep the pilot program a closed system once the TDR
program went countywide that was actually the issue. If potential participants had known that the
market was to go countywide, Olney/Montgomery County would not have seen the inflated
$15,000 TDR price. Developers would have held out for TDRs priced on a countywide basis.
Simultaneously, sending area landowners would not have held out for $15,000 realizing that once
the market opened up they would be competing with many more TDR sellers. However, no
matter how the transition from a closed to an open system is made, a pilot program creates an

opportunity and thus expectations.

Once the county TDR program was adopted (1981), the county accordingly amended its
zoning ordinance in two forms. One amendment, associated with the sending area, was the
addition of a new zoning category called the Rural Density Transfer (RDT) zone. The second
amendment, associated with the receiving area, was to add a general provision that allowed an
optional TDR increase in any residential zone located within a receiving area designated on the

master plan subject to a number of conditions.

Chapter 9

262
Sending Area

To initiate the agricultural preservation program, sectional map amendments were
adopted and resulted in the comprehensive rezoning of 91,5911 acres in the Agricultural Reserve
to form the Residential Density Transfer (RDT) Zone (MNCPPC 1992 p. 1). The RDT zone is the
zoning technique used to implement the TDR program. This zone constitutes the program’s
sending area and accounts for approximately thirty-three percent of the county’s land. The most
current figure for RDT acreage is 93,000 (August 1998). Using this RDT, density is shifted away
from areas to be preserved by restricting residential development within the RDT zone while
providing the option to transfer all or some of the development rights on the property. Within the
RDT zone, most farming uses are provided for as of right; however, residential development is
restricted in the sending area though downzoning to one unit per twenty-five acres with a
minimum lot size of 40,000 square feet and a cluster requirement. This level of downzoning is the

same as that tested in the Olney prototype.

Because the rural zone had previously permitted one unit per five acres, landowners in
the sending area are given one transferable development right for every five acres owned less the
number of dwelling units located on the land or previously sold. In effect the county decreased
the number of rights under the current zoning but simultaneously increased the number of rights
if they were transferred. The ability to separate development rights from farmland is intended to

be an economic incentive to the continuation of farming (MN CPPC 1980 p. i ).

Montgomery County’s program has been viewed as a form of compensable zoning by
some agricultural preservation experts (Daniels and Bowers 1997 p. 180). Landowners who sell

TDRs retain the right to build one house per twenty-five acres. A landowner that sells TDRs

 

' Estimated acreage from Research Division, Montgomery County Planning Department, reflecting the
zoning form Sectional map amendments G-256, G-266 and G-3 52.

Chapter 9

 

263

receives compensation for the one dwelling unit per twenty-five acre zoning. There is an opinion
that in a pure TDR program, no development rights would remain once the TDRs were sold and
transferred to a receiving area, and a conservation easement would be placed on the farm in the
sending area. However, there is no TDR program that takes away all development rights. In fact,
this would likely be found unconstitutional, a taking without just compensation. Perhaps the real
question here is whether retaining one development right per twenty-five acres results in
agricultural preservation. Twenty-five acres was selected because an agricultural economic study
conducted by Montgomery County found that a twenty-five acre farm was a viable farming unit
and was the minimum acreage needed to support a farm family on a cash crop direct market basis

(T ustian 1983 p. 69).

The rezoning element of the TDR program, i.e. the downzoning of the agricultural
reserve, was upheld by the Montgomery County Circuit court in January 1983 against a claim that
it amounted to an unconstitutional taking of property. A group of property owners in the
agricultural reserve contended that the action was improper because no receiving areas had been
designated at the time of the downzoning; thus a taking had occurred, Dufour v. Montgomery
County, Law no. 56964 (Montgomery County Circuit Court 1983). The circuit court judge found
that the downzoning was permissible on its own merits within the context of Maryland law and
did not constitute a taking. He stated that the rationale for the downzoning did not hinge on the
TDR scheme, so the absence of receiving areas at the time of the downzoning need not be

considered. The judgment supported the TDR concept.

Identifying sending areas may be the least complex element of a TDR program. Given
that there is motivation to preserve a particular land resource, the sending area is simply the area
where the valued resource exists. In the case of Montgomery County the valued resource was

agricultural land and its location was known. Once the county determined the sending area

Chapter 9

264
boundaries, the RDT zone, it calculated a theoretical maximum of available TDRs, based on the

acreage of private land. Allocating TDRs and identifying receiving areas are the more complex
and controversial elements of TDR programming. The receiving area has to be located, the
receiving capacity has to be defined, and a balance between TDR allocation in the sending area
and TDR capacity in the receiving area must be reached. Experts have argued that a two to one
receiving to sending ratio is best to create TDR demand. A Montgomery County program official
believes the supply of TDR capacity in the receiving areas should be equal to the theoretical
maximum of TDRs in the sending area in order to achieve equilibrium in supply and demand
(Criss 1997). Anything less will create an unfair price for either the farmer or developer.
Montgomery County has seen both instances. With the Olney pilot program the demand for
TDRs outweighed the supply. However, the countywide program was more balanced. To avoid
chaos from both the farmers’ and developers’ perspectives, the best way to implement a TDR

program is to identify the receiving capacity and the sending capacity at the same time.

Receiving Areas

An ongoing policy of the Montgomery TDR program is to provide adequate receiving-
area eapacity for the eventual market absorption of all TDRs created by the RDT zoned area.
(MN CPPC 1992 p. 3,5). The receiving areas were not identified in the Preservation of
Agricultural and Rural Open Space Plan. Rather, the plan defined the process for identifying
suitable receiving areas. The Montgomery program originally designated receiving areas on a
case-by-case basis, allowing for public input through individual area master plan amendments. It
was determined that a detailed study of the receiving areas was needed to ensure that appropriate
base and maximum (bonus) densities were assigned to minimize any adverse community impact.
The intention was that as master plans were developed, or revised, opportunities to create
receiving areas would be examined. The receiving areas were to be identified in adopted and

approved master plans and were to be consistent with environmental, transportation, housing and
Chapter 9

265
population guidelines (MNCPPC 1980 p. 43-44). Therefore, the Plan established the Master

Plan procedure as the mechanism by which suitable locations for receiving areas were to be

identified.

In April 1987, the Maryland Court of Appeals invalidated this receiving-area
identification procedure. In West Montgomery County Citizens Association v. Maryland-
National Park and Planning Commission, 522 A.2d 1328 (MD 1987) it was held that the process
was flawed in that it allowed increases in density (which the court considered to be a zoning
decision) by following planning procedures rather than the state-mandated procedures for zoning
decisions. Additionally, because the text of the zoning ordinance had imposed no upper limit on
the density in a receiving area, the density decision was left to the planning process. The court
noted that the county should have taken the additional step and designated TDR receiving areas
and allowable densities in the zoning ordinance itself and on the zoning map (Siemon et al. 1996

p. 33).

In June of the same year, the county responded to the courts decision and created new

TDR receiving zones, indicating them on the zoning map and outlining guidelines for the County
Zoning Board regarding allowable optional densities. The method involved the same criteria as it
did for designating receiving areas through the area master plans, namely: the ability of planned
public facilities to serve the area, the compatibility of the proposed optional TDR density with the
density and uses planned in surrounding areas and the ability of the land to accommodate the
optional density. By using a method of TDR receiving-area designation outlined by the court, it
is unlikely that the newly amended zoning ordinance and the TDR program could be successfully

challenged in court again (Siemon et al. 1996 p.33).

Chapter 9

266
Designating a receiving area requires an amendment to the specific Area Master Plan at

which time the optional bonus density is specified. Of the twenty-three planning areas in
Montgomery County, twenty could possibly include receiving areas. In 1987 seven planning
areas had designated receiving areas. By 1997, thirteen planning areas included the designation of
receiving areas. Currently there are 9,600 acres in receiving areas; this is approximately one tenth
the size of the RDT zone. Additionally, there are two additional master plans contemplating the
inclusion of receiving areas. This indicates overall support of the TDR program and viability of

receiving areas.

The individual master or sector plans not only designate receiving areas, they also
calculate the number of TDRs for receiving areas. Factors considered in the calculation include:
the development constraints, whether or not the landowner wants to use TDRs for added density,
whether the property will be developed for residential use, whether public purchase of land is
considered, and whether the land may be rezoned to another residential zone. The monitoring of

the receiving areas and their capacity to accommodate TDRs is critical to a successful TDR

program.

There are three incentives for TDR use in the receiving areas: avoidance of costly
rezoning to get increased density, priority consideration in infrastructure improvement program,
and ability to increase density. Rezonings are difficult under Maryland statute and are usually

more difficult in Montgomery County because their master plans are updated so readily.

Density bonuses in receiving-areas were based on the following guidelines. The base or
minimum density recommended should not be below the minimum that would be reasonable
fiom a planning perspective; i.e the base density should not be so low that it is incongruous with,

or arbitrarily below, adjacent area “non-TDR” densities. The optional density bonus should not

Chapter 9

267
exceed the area’s planned public facilities’ carrying capacity or the environmental carrying

capacity of the site. The optional density bonus should not be incompatible with surrounding
areas with or without TDRs. Property proposed in the new plan for downzoning should not be
designated as a receiving area. The TDR option should generally not be exercised to increase

density derived from the planned development option (T ustian 1983 p. 70; Canavan/Criss 1997).

Transfer Procedure

Development rights are exchanged through private sale; the private sector is the driving
mechanism. TDRs can be used only for residential development, with each TDR being worth one
additional dwelling unit above the base density allowed in the zoning district up to the designated

density.

The transfer of development rights procedure was integrated into the known subdivision
approval process. Official approval of the TDR transfer is attached to the subdivision preliminary
plan. TDR purchasers are then forced to define how they intend to use the receiving area site. In
addition to submitting a preliminary plan, developers must include proof of an option to purchase
or actual purchase of the appropriate number of TDRs. Every TDR that is legally created and
severed is serialized. That serialized number is found on the easement, the deed for transfer, the

preliminary plan and the final record plat.

In order to utilize the TDR option and its associated bonus density, a number of
conditions must be met. A request to use TDR’s must contain at least two thirds of the total
permitted on the site under the area master plan. This ensures that receiving areas develop to a
sufficient density to sustain market demand for TDRs and to avoid spreading a few TDRs across
a large number of receiving parcels. Other conditions include a maximum optional density not

exceeding that shown on the master plan, as well as site plan approval is required.
Chapter 9

268

After preliminary plan approval, a detailed site plan is submitted to the Planning Board.
The final subdivision plan is used to record the easement on the sending-area land, to track how
many TDRs are being used and how many remain on a particular sending area parcel. Once site-
plan approval is given, the developer prepares a record plat. The developer must also prepare a
“Transfer of Development Rights Easement” document for the sending parcel and a “Deed of
Transfer of Development Rights” document. The easement document limits future residential
development to the remaining number of TDRs and conveys the easement to the county as the
grantee (Siemon et al. 1996 p. 33). The latter document represents the contractual agreement
between buyer and seller and specifies the number and price of TDRs in the transaction. While
initial TDRs prices were approximately $600 an acre (or $3,000 per TDR), more recent prices

have averaged $2,000 an acre (or $10,000 per TDR) (Criss 1997).

When both documents are recorded, the record plat is approved by the planning board
and recorded. After the easement is recorded, the developer’s final subdivision plan receives a
site-plan approval permit. After recording the plat, the developer records a “Transfer of
Development Rights Extinguishment” document to complete the transfer. This document shows
that a TDR has been used on a specific property and is no longer available to be transferred
(Siemon et al. 1996 p. 33). The final plat of the site includes a note of the number of TDRs used,

noting the serial number(s) and reference to the easement on the famrland fi'om which they came.

TDR in Suite

The TDR program was implemented to help preserve farmland and open space in the
agricultural reserve. TDR was a land use element in a broader program designed to preserve

agriculture (T ustian 1983). Because TDR focuses on farmland preservation, such programming

Chapter 9

269
by itself would not preserve the county’s agricultural industry. In order to sustain the county’s

farming industry, the TDR program was designed to work in coordination with other agricultural
preservation programs. The three major agricultural preservation programs that work with the
county’s TDR program are the Maryland Environmental Trust (MET), a conservation easement
program established in 1967; the Maryland Agricultural Land Preservation Foundation (MALPF)

of 1977; and the county Agricultural Easement Program (AEP) initiated in 1988.

MET was established by the State Legislature in 1967 to encourage landowners to donate
an easement to protect scenic open areas including farm and forest land, wildlife habitat,
waterfront, unique or rare areas and historic sites. In return, the landowners are eligible for certain

income, estate, gift and property tax benefits.

MALPF was established in 1977 by the State Legislature in response to the decrease in
farmland acreage due to development. The MALPF purchases agricultural land preservation
easements directly from the landowner in an agricultural district of 100 acres or more for cash.
Following the easement sale, agricultural uses are still permitted. Since 1978 Montgomery

County has participated in MALPF.

AEP was enacted in 1988 to increase the effectiveness of preservation efforts by enabling
the county to purchase easements with the county’s share of the agricultural land transfer tax
(Montgomery County Executive Regulation on Agricultural Land Preservation Districts and
Easement Purchases p. 1). Montgomery County AEP gives the county the ability to purchase
agricultural land preservation easements to preserve land for agricultural production. This is
contingent upon the land being zoned rural, rural cluster or rural density transfer, or subject to the

land being designated as an approved state and county agricultural preservation district.

Chapter 9

270
Without the AEP program the approach to preservation is random, resulting in a scattered

pattern of protected properties. However, with the county easement program specific
preservation properties can be targeted. In this way purchase of development programming can
complement and add structure and strategy to a TDR program. In Montgomery County it is clear
what the AEP program has accomplished. The majority of funds, ninety percent, have been used
to purchase easements a half mile back from the agricultural reserve boundary line. This creates a
buffer of preserved land that can diminish the pressure of development as it continues to encroach

upon the agricultural area.

Bank

Discussion of a fund or bank began in late 1979 and early 1980 when the Master Plan for
Preservation of Agricultural and Open Space was adopted. Due to the unfamiliarity of the TDR
concept, public acceptability and confidence were viewed as critical to program success. To
assist in achieving both of these objectives, a TDR bank was proposed. With initial bank funds
from public revenue sources, the planning commission and county commissioners established the
bank in part to provide a degree of financial stability and to alleviate farmers’ concerns. The
purpose of the bank was to guarantee the value__for theflghts, especially if a strong market was
slow in developing. The TDR bank was empowered to issue loan guarantees with development
rights as collateral and could acquire, 110133315311 rights. The bank would function as a lender
and buyer of last resort. i *
Based on a bank reference in the plan, the county went forward to formulate the

legislation to create the Development Rights Bank. This process took a couple of years, and

MK
‘M—t.

W

resulted in the fund’s establishment in 1982. WWhile thebankwas created at theme—11%

, program, it did not become operational until 1985. This TDR bank ended in 1990 because of a

6V5)? ii {11 H"

melt-tit (mo: 1" _ Chapter 9
\f, . ‘~ ON 1%)!th ‘1’“
MW W1 M 1 t“)
0131' (4‘5’

--—~~__~_

 

271

sunset clause in the original legislation. The intent was that it did not need to function
indefinitely. It was establishedgas a safety net, in the event that the private TDR market did not

get established. However, the private sector was so strong and active that the fund was never

 

needed. While a couple of applications were submitted, the bank functioned by putting buyers in

fi‘A

‘\

contact with sellers. Never did an applicant file to request a loan or purchase TDRs outright.
While Montgomery County did anticipate that the bank would not be very active, i.e. not a major
active player in the market, it was surprised that there was not a single application. The bank did
nothing more than facilitate. Montgomery spent more time organizing the bank, legislation and
people to participate on the board and at meetings than on actual TDR transactions. Despite the
lack of actual bank fund usage, those involved believe the bank was absolutely necessary. It was

critical, and represented a commitment to the farming community.

Status

The TDR program in concert with additional agricultural preservation programs has
protected over 48,343 acres within the 93,000-acre agricultural reserve. As of June 1997 the
TDR program has protected 39,180 acres at a private sector cost of 60 million dollars. This
acreage amount is approximately eighty-one percent of all lands protected by TDR, PDR and
donated easements. This high percentage may in part be attributed to the existence of high
deonmery County's location northwest of Washington, DC.
TDR is dependent on development pressure. Under the AEP program 5,398 acres are protected.
Under the MALPF 1,806 acres are protected. And under the MET, where development rights are
donated for federal and state tax deduction, 1,959 acres are protected. (See Table 9-1) AEP,
MALPF and MET require public expenditure, with an overall public cost of twenty million

dollars for the acres.

Chapter 9

272

Table 94: Status of Program

1. TDR Activity to Date

TDRs on approved subdivision preliminary plans
TDRs recorded on subdivision record plats

Number yet to be recorded

1992

4,881
3,185"

1,696

1997

5,972
5,123

849

*An additional 503 TDRs have been purchased but are not yet assigned to specific receiving

parcels, yielding 3,688 TDRs on 23,069 acres in the sending area.

2. Comparing TDR Sending and Receiving Areas

Sending Area

Theoretical max (1 TDR per five acres), RDT Zone
I""at 91,591

Less TDRs not available:

Publicly owned land 12,777/5
Land in (MALPF) 1,678/5
Land in MET 1,879/5
Land in County AEP 2,305/5
Parcels smaller than ten acres 7,543/5

Dwelling units on 10 acre or > parcels

A. Number of TDRs in Sending Area

2,555
355
375
461

1,508

787

6,021

Less 20% of remaining TDRs that will be held for future

Residential development in the RDT Zone: 2,481
(Actual maximum in sending area)

Receiving Area

Max. designed to date in area Master or Sector Plans:

(in 1992 nine master plans; in 1997, thirteen master plans)

Less TDR capacity through development activity
TDRs on approved subdivision plans

TDRs on preliminary subdivision plans

B. Number of TDRs used

4,881

478

5,359

C. Remaining available TDR capacity in receiving areas

3. Needed additional TDR capacity in receiving area
Number of TDRs in sending area (A)

Less number of TDRs used in receiving area (B)
Less remaining master plan capacity (C)

Chapter 9

12,297
-5,359
-3,842

3,096

18,318" 19,297
-6,021 -6,889
3,310
361
389
1089
903
837
6,889
12,297 12,408
-2,481
9,927
1 1,650 14,427
-7 808 -9,560
5,972
789
6,761
3,842 4,867
3,096 780
12,408
-6,761
-4,867
780

273
By January 1997, over half the land in the reserve was protected, which meant there were

very few or no TDRs on those properties that were already protected. The remaining land,
between 16,000 and 22,000 acres represents between 3,300 and 4,000 TDRs. Currently,
Montgomery County has a total receiving capacity of 4,867 (Criss 1997). In other words, it is
finally at a point where its receiving capacity is greater than its sending capacity. It has taken
seventeen years to get to that point. Although the theoretical literature contends that the receiving
area should double the sending-area capacity, this is not easy to implement. The receiving area

designation is the most challenging aspect in TDR program design and implementation.

Over the last sixteen years, 6,629 TDRs from over 400 properties have been severed by
easements from an area of 43, 993 acres (MNCPPC 1997). Approximately 2,170 TDRs remain
attached to the land for a number of reasons: a dwelling unit exists, firture development is
planned, or rights are severed but not yet transferred. Of the 6,629, only 5,123 have been
transferred to receiving areas by recording a subdivision plat (Status Report 1997 p. 1). The

remaining 1,506 TDRs have been severed but have not been attached to a receiving area.

Program Future

The county has a stockpile of TDRs as a result of efforts to find additional funding
sources for the AEP program in 1992. One source was to capture the assets of TDR. Prior to
1992, when easements were purchased the development rights were extinguished. The
administration felt the asset of the TDR should be captured at the time the easement was
purchased by taking title to the TDR. This asset was seen as a potential source of revenue. There
was great debate because neither the county nor the farmers wanted to be in competition in selling
TDRs. The end result was legislative authority to stockpile or hold the TDRs that were created

when easements were purchased. While the county could create them and legally establish them, '

Chapter 9

274
they did not have the authority to sell them. In effect, it was a PDR program that was modified to

take title of TDRs as easements were purchased. However, in the future, perhaps when the
farming community is no longer a competitor in the TDR market, the county may sell the
publicly owned TDRs. The day will come, when the county will, as planned, actually transfer
ownership for residential use (Canavan 1997). It currently is holding them strictly in fairness to
the agricultural community. At some point when the county is not in competition with sending-
area farmers it will sell them. Given that the receiving-area capacity is now greater than the TDRs
available, it is possible that in the near firture there will be no more TDRs in agricultural area, i.e.
no more TDR competitors from the farming community. The county has stockpiled

approximately 380 TDRs, which may potentially grow to 500.

If the county is no longer in competition with the farmers, it could sell the TDRs to
developers. The resource created by this stockpile of publicly held TDRs will not be tapped until
the agricultural community deems it appropriate (Canavan 1997). However, a number of options
could be considered. The county could use that money to buy more easements, perhaps on land
that is not zoned RDT. Another alternative would be to go back and put an easement over the top
of TDR easements to extinguish the one house per every twenty-five acres. If additional TDRs
were to be purchased, it is anticipated that their price would be no less than $100 or $1,000 more
per TDR than what the present market is bearing (Canavan 1997). Additionally, the county may
set limits on the number of TDRs that can be sold per year. These are some of the variables that

have to be discussed openly because it is a very sensitive issue.

Another issue to be considered in the TDR program firture is whether the planned growth
has been exceeded. In the future the county may need more land for development because the
development envelope envisioned in 1980 is filled. Given that horizontal growth may be

preferable to vertical and that agricultural easements exist, ultimately the decision of lifting

Chapter 9

275
easements will arise. The question is how to lift that agricultural easement and identify the

potential caveats. A five-step process has been suggested: lifting the agricultural easement;
support and signature by the county executive and the county council; a new master plan
advocating growth; a change in zoning; and public forum or public referendum. There will be
tremendous pressure from people living within the development envelope to keep the open space.
In part this is why public policy and outreach regarding the agricultural resource are so important.
Given that the majority of the county population resides within the development envelope and
they want assurance that they are going to take the country ride on Sunday, any referendum to lift

easements will probably fail (Canavan 1997).

Success

Montgomery County’s program is viewed as one Of the most successfirl TDR programs,
if not the most successful in preserving agricultural land. Prior to the TDR program,
approximately 3,500 acres of farmland per year were being converted to urban use. Between 1980
and June 1991, only 3,000 total acres were converted. The success of the Montgomery program
is attributed to several factors: leadership, commitment, geographic coordination, policy
coordination, level of development pressure, TDR incentives, the presence of a bank and

education.

Political leadership in Montgomery County is critical to the TDR program’s success.
Political leadership is necessary in order to achieve other factors such as commitment, thorough

planning, coordination across jurisdictions and coordination of policies.

Local government must commit itself both to protecting the agricultural resource and

educating all stakeholders. Both are necessary for a program to succeed. Commitment of the

Chapter 9

 

 

276
county government and the Maryland-National Capital Park and Planning Commission is

invaluable. County commitment was demonstrated by the creation and funding of a County
Development Rights Revolving Fund (Siemon et al. 1996 p. 35). Additionally, local government

efforts facilitated the program by demonstrating the potential for success through the Olney pilot

program.

 
    
  

1.-
,‘T
/ 11

identify the most critical areas in need of preservation. Additional efforts have been made to

The Montgomery TDR program is thoroughly planned, including reports and studies to

understand the stakeholder groups and their roles in a TDR program. By utilizing a pilot program
the county was able to study the rights-transfer process within an actual planning framework.
Lastly, the receiving area identification procedure allows each individual property to be studied at

the time the master plan is being amended.

The success of the Montgomery program is in part due to an approach that combines and
coordinates the county comprehensive plan with thirteen of the twenty-three separate master plan
policy areas. While there is coordination between master plans, the Montgomery County
program is purposely not interjurisdictional. The agricultural reserve is within the jurisdiction of
Montgomery County. Montgomery County learned from earlier programs such as New Jersey
Pinelands, where the growth areas were not one and the same as the preservation areas. Program
success requires cooperation and coordination. One township would have to agree to preserve its
farms, and another township would have to agree to take all the growth. Interjurisdictional TDR
programming requires long-term cooperation; this is where the New Jersey TDR program faced
its greatest challenge. Learning from the New Jersey experience, Montgomery County is not

interjurisdictional, and does not rely on any of the incorporated towns in the county.

Chapter 9

277
What is also evident from earlier TDR programs is that TDR is not a panacea. Its success

depends on its integration into a suite of land management policies, in particular grth
management and preservation policies. Critical and complementary policies and programs in
Montgomery County include the use of agricultural zoning to protect a critical mass of farmland,
use-value assessment for farmland, easement purchase programming, and voluntary agricultural

districts (Daniels and Bowers 1997 p. 182 ).

The level of development pressure, generated in part by the proximity to the DC. area,
also contributes to Montgomery County's TDR program success. This pressure creates a market
for TDRs. The residential development pressure was and still is strong enough to support a
viable private market for both the sale and purchase of development rights. Additionally, the
receiving areas are distributed throughout the county, thereby minimizing stress on public service
systems. Development that is permitted with TDR use is coordinated with capital improvement

programs allowing higher densities to actually be achieved.

The inclusion of other incentives to use TDRs is another factor contributing to program
success. The use of TDRs in a development project can advance the project in the county’s
system for establishing priorities for extension of, and connection to, public facilities. However,

Montgomery County has few TDR transactions as a result of this incentive.

The public TDR bank lent credibility and security, both of which were necessary to
establish the TDR program. Additionally, the bank functioned as a facilitator, bringing together
potential TDR program participants and educating the community at large and lending institutions

on the TDR concept and program.

Chapter 9

278
One of the most important factors responsible for Montgomery County's TDR program

success is the extensive education effort. Both the Department of Economic Development and
the Maryland-National Capital Park and Planning Office have undertaken public education

campaigns. Their efforts include public meetings, presentations, information brochures and staff

support.

Applying the Index to the Program

Foundation for TDR

The foundation for Montgomery’s TDR program was not state enabling legislation.
Rather, the program’s foundation was built in the middle 19605 with the Wedges and Corridors
Plan that established wedges of open space and corridors of dense urban development. When
Montgomery County’s TDR program was initiated, the legal foundation lay in the police power
to regulate land use through zoning. Although the program had experienced legal difficulties in
receiving-area designation, the legality of the overall program was upheld. Strengthening the
TDR foundation was Montgomery County’s Comprehensive Master Plan process. Currently the
state of Maryland’s Smart Growth Initiative gives firrther support for TDR programming by

targeting areas for growth and areas for preservation.

Regulatory Process Must Have Sufficient Integrity

The regulatory atmosphere in Montgomery County permits the TDR program to function
successfully. TDR is the land use element in the broader agricultural preservation program. The
county is well suited for a countywide TDR program given its master-planning process and the
coordination of the twenty-three separate master-plan policy areas. The Functional Master Plan
for the Preservation of Agricultural and Rural Open Space was the first comprehensive plan for

the preservation of agriculture and rural open space tied to an established countywide grth

Chapter 9

279
management program, and is still in place nearly twenty years later. Coordinated master plans for

other policy areas continue to recognize and take advantage of the TDR program; thirteen of the

twenty-three policy areas have integrated receiving areas into their master plans.

Regulatory integrity can also be seen in the continuity of the agricultural reserve
boundary. As development encroaches on the agricultural reserve, there is pressure to push the
boundary back through rezoning. The county council has the authority to do this. However, the
agricultural reserve line has had only minor adjustments in seventeen years. In fact the line was

set in 1974 with the original rural zone.

Sense of Place

With only three percent of the county population living in the agricultural reserve,
Montgomery County has a very aggressive agricultural marketing program. This campaign has
assisted in creating a sense of place across the county, as opposed to having a sense of place in
the agricultural reserve and a sense of place in the developed areas of the county. This is
particularly important given that the vast majority of county residents live outside the agricultural
reserve. The county is committed to making sure that the 810,000 citizens who live downcounty
understand the value of public policies for the preservation of agriculture as a resource and as a
livelihood. This agricultural marketing program includes farm tours, harvest sales, brochures, a
county sponsored farmers’ market association, logos, displays, an Agriculture in the Classroom

program and a Future of Agriculture Program.

Resource Perceived as Valuable
The resource that is protected under Montgomery County’s TDR program is agricultural
land and open space. This was established with the adoption of the Functional Master Plan for

the Preservation of Agricultural and Rural Open Space. Because open space is included in the

Chapter 9

280

protection resource, it is easier to achieve consensus that the resource is valuable and warrants
protection. For some county residents the land warrants protection because it contributes 283
million dollars to the county’s economy on an annual basis; for others because it ensures a
peaceful scenic setting. Additionally, the intensive education effort undertaken by the
Department of Economic Development has contributed to the value the entire county places on
agricultural land, its character and its products. In Montgomery County, it is particularly
important that the entire county value the preservation lands, because only a small percentage of

the county residents live in the preservation area.

Rapidly Growing Area

The threat of development has existed in Montgomery County since the 1950s. Because
of the county’s close proximity to Washington DC, the development pressure has continually
been high. Ironically, the county’s success in preserving agricultural land has contributed to the
growth pressure that threatens the farmlands and the farming community. Because Montgomery
County has been successful in accommodating growth and protecting agricultural lands, it
continues to be a desirable place to live. Consequently, it is a ideal community for a TDR

program.

Understanding Development Demands and Patterns

Montgomery County understood the threat of development and the pattern of
development when it initiated its TDR program. Montgomery County used a pilot program to
further understand development demands and the role of TDRs in the development market. The
county has also come to understand that the most appropriate way to locate receiving areas and
establish base and bonus densities is through the master plan process. By establishing receiving
area locations and base and bonus densities through the master plan process, the decision makers

are those who understand the policy area’s development demands and patterns. Furthermore, by
Chapter 9

281
utilizing the master plan process, opportunities for public input and support -aspects that are

critical to TDR programming - are not only permitted but actually required.

Viable Receiving Areas

The receiving areas were identified in adopted and approved master plans. Receiving
areas were consistent with environmental, transportation, housing and population guidelines.
Because the receiving-area identification process is established through master planning, if an
area is established it is politically accepted. Additionally, the receiving-area identification
method includes criteria ensuring that acceptable receiving sites are physically feasible. The
criteria include the ability of planned public facilities to serve the area, the compatibility of the
proposed optional TDR density with the density and uses planned in surrounding areas, and the
ability of the land to accommodate the optional density. Because of the method of receiving-area
identification is integrated into the master plan process, and because that process defines specific

criteria, the resulting receiving areas will likely be viable receiving areas.

Public Support

Administrators of the Montgomery County TDR program are well aware that its success
depends on public support. The county has made a commitment to achieving public support from
landowners in both the sending and receiving areas. This is evidenced by the active roles of both
the Department of Economic Development and the Maryland-National Capital Park and Planning
Office in the TDR program. While the primary responsibility of the Department of Economic
Development is gaining agricultural community support and educating that community regarding
TDR, the primary responsibility of the Maryland-National Capital Park and Planning Office is the
growth side, educating potential receiving area landowners and developers on the benefits of

TDR and how to participate. An indication that TDR program administrators are concerned with

Chapter 9

282
public support is found in the conscious decision to not sell publicly acquired TDRs. Concern

with public support is also evidenced by the extensive education effort that Montgomery County

has undertaken and continues to offer.

Montgomery County’s TDR program has witnessed a number of proponents and
opponents over the course of its existence. In some instances opponents eventually became
proponents. The real-estate developers were initially appalled and totally against the TDR
program because the number of homes permitted in the farmland was diminished. However,
when they realized they could collect a seller’s percentage on TDR sales, they accepted the
program. They realized the program did not diminish the number of homes in the county; rather,
it shifted their location. To remove real-estate developers’ adamant opposition, the county
undertook a two-year education effort, which resulted in real-estate developer program approval.
While the farming community is now a strong proponent of the TDR program, originally it was
leery of ‘yet another promised agricultural preservation program’. Program administrators
realized that this was a critical group to consider, and that there is a distinction between active
and retired farmers. One Montgomery official stated that every farmer is a future developer. In
Montgomery County the landowners in the growth areas are proponents of the TDR program.
They accept that they are giving up lower densities. Those involved with the Montgomery
program advise that planners must be advocates of the program; if not, they will have a difficult
time selling it to other stakeholders. They must believe in the program in order to have effective
outreach and education. Builders were indifferent to the program; they did not care where they
built, as long as they could build. The land conservancies and trusts, along with state planning,

were the strongest proponents of the Montgomery TDR program.

Chapter 9

283
Political Leadership

Montgomery County’s willingness to take the lead in TDR programming is exemplified
through its adoption of a TDR program absent state enabling legislation. The political leadership
in Montgomery was willing to move forward despite the lack of state leadership. In part this was
because not moving forward was viewed as more detrimental. Another illustration of the county
leadership was the establishment of the TDR fund. Although this was never used, it

demonstrated that the county was willing and ready to take a leadership role.

Mandatory versus Voluntary

While Montgomery County program administrators state that use of TDRs is voluntary,
the downzoning of the agricultural reserve was not voluntary. For this reason, the Montgomery
TDR program is considered mandatory. The use of police power in the downzoning preserved
the land, with or without TDRs. Landowners in the agricultural reserve still hold the land.
Whether farmland owners exercise the option of selling TDRs is up to them. For this reason,
program administrators say their program is voluntary. Montgomery County’s TDR program may
be viewed as voluntary on the receiving side. Receiving-area landowners do not have to purchase
TDRs. They can develop at the base zoning or they may seek a rezoning to allow a higher

density without any TDRs. It is strictly voluntary from the receiving standpoint.

TDR Bank

Because the TDR concept was unfamiliar, public acceptability and confidence were
viewed as critical to program success. To assist in achieving both of these objectives, a TDR
bank was established in 1982 and became operational in 1985. The bank was established in part
to provide a degree of financial stability, to alleviate farmers’ concerns, to act as a lender and

buyer of last resort, and to guarantee the value of the rights especially if a strong market was slow

Chapter 9

284
in developing. The TDR bank was empowered to issue loan guarantees with development rights

as collateral and could acquire, hold and sell rights. Because the private sector was so strong and
active, the fund was never needed. The bank functioned only as a facilitator, putting buyers and
sellers together. While Montgomery County spent more time organizing the bank than on actual
TDR transactions, the bank was absolutely critical since it represented a commitment to the

farming community. The bank was eliminated in 1990 due to a sunset clause.

TDR/PDR Linkages

The TDR program was designed to work in coordination with other agricultural
preservation programs, in particular the Maryland Environmental Trust (MET) a conservation
easement program; the Maryland Agricultural Land Preservation Foundation (MALPF); and the
county Agricultural Easement Program (AEP). MET encourages landowners to donate an
easement to protect scenic open areas in retum for certain income, estate, gift and property tax
benefits. The MALPF purchases agricultural land preservation easements directly fi'om the
landowner in an agricultural district for cash. Following the easement sale, agricultural uses are
still permitted. Montgomery County AEP gives the county the ability to purchase agricultural
land preservation easements to preserve land for agricultural production. With the county
easement program, AEP, specific preservation properties can be targeted. Purchase of
development programming can complement and add structure and strategy to a TDR program. In
Montgomery County it is clear what the AEP program has accomplished; the majority of funds,
ninety percent, have been used to purchase easements a half-mile back from the agricultural
reserve boundary line. This creates a buffer of permanently protected land that can diminish the

pressure of development as it continues to encroach upon the agricultural area.

Chapter 9

285
Simple and Cost-Efficient

A TDR program must be simple to understand from both the farmers’ and the developers’
perspectives. The facilitator has to administer the program and educate the two key players on
how the program works. If the facilitator does not confidently convey that the program is simple
and workable, farmers and developers are going to hesitate; if they hesitate, they will not
participate. An indication that Montgomery County made a concerted effort to keep the program

simple was the integration of the transfer process into the familiar subdivision approval process.

The methodology for sending-area location was based on the formal rural zone, and the
TDR allocation rate is based on the previous rural zoning. While the use of other variables such
as soil quality and distance to development pressure were considered, the ultimate decision was to
not include these variables because they were too subjective. The Montgomery County TDR
program treats all land zoned RDT the same, one TDR per every five acres. The county is
characterized by a mixture of soils, elevation, tepography and water suitability. Documenting
these variables would be extremely time consuming. Montgomery County TDR program
designers felt the program would never have been passed. The county was losing too much
acreage per year to residential development. If a community has the time, resources, and
consensus among decision-makers, a complete program based on complex variables may prove
useful. However, any of the decision-makers may suggest an easier approach that everyone can
accept. As stated by a Montgomery County officia , “it may not be perfect, but it is better than

doing nothing. Furthermore, it is understandable.”

Chapter 9

Chapter 10

New Jersey Pinelands Case Study

Program Area Description

The Pinelands National Reserve is an area of a 1.1 million acres in southeastern New
Jersey that contains forest, farms and scenic towns. Approximately forty percent of the area is
publicly owned. It encompasses portions of seven counties and all or part of fifty-six
municipalities. As defined by state legislation, the boundary of the Pinelands National Reserve
differs from that of the Pinelands Area. The Reserve is comprised of a coastal area and the
Pinelands Area. The Reserve includes land east of the Garden State Parkway and to the south
bordering Delaware Bay. These areas are excluded from the Pinelands Area. The Pinelands Area
includes approximately 938,000 acres and encompasses portions of seven counties and all or part
of fifty-three municipalities. People who live and work in and around the Pinelands Area number

700,000.

The Pinelands’ predominant natural features include pineland forests and the Kirkwood-
Cohansey Aquifer. The large contiguous forest areas are especially unique given the area’s
proximity to urban centers such as New York City and Philadelphia. The aquifer is one of the
largest underwater water supplies in the world. The area is characterized by sandy soils with
streams that are fed by this aquifer and in turn supply the marshes and bays. The stream network
is so vast that no point in the Pinelands is more than 1.5 miles from a stream (Pinelands
Commission 1996 p.3). Because the soils of the Pinelands are sandy, water supplies are more

susceptible and more easily polluted by development. Effects of development include septic-

286

287
system failure and runoff from roads, agricultural and urban areas earrying fertilizers, pesticides

and other pollutants.

Major activities within the Pinelands include farming, recreation, resource extraction,
shell fishing, public service and construction. The agricultural resource of the Pinelands includes
blueberry and cranberry industries that rank second and third in the nation. Because of its
proximity to New York, Philadelphia, and Atlantic City, the Pinelands’ perimeter is faced with
development pressure. While the forested core does not face the same intensity of development
pressure, it contains the valuable cranberry and blueberry farms. The Pinelands’ combination of

natural features and development potential make it an area in need of protection.

Planning History

The question of how to achieve that protection was a challenging one. It was impossible
to stop all development or purchase all land. The region was too large and too ingrained with the
patterns of 300 years of human use and habitation (Pinelands Commission 1997 p. 1). Large-scale
government purchase of land was impractical due to the history of private land ownership. In
1978 Congress responded by creating the Pinelands National Reserve. Designated as an
International Biosphere Reserve by the United Nations, it is one of forty-seven in the United
States. As a national reserve it would be managed cooperatively by local, state and the federal
governments. The state took the lead in evaluating the Pinelands’ resources and planning how to

balance their protection with new development (Pinelands Commission 1997 p. 1).

In 1979, Governor Brendan T. Byrne and the State Legislature acted to protect the
resources of the Pinelands area from growing development pressure. As provided in the National

Parks and Recreation Act of 1978, Governor Byme established the Pinelands Commission by

Chapter 10

288

executive order on February 8, 1979. The Pinelands Commission was authorized to develop a
comprehensive management plan through both Federal and State legislation. The commission is
composed of a fifteen member board; seven are governor-appointed, seven are appointed by each
of the counties in the Pinelands, and one is appointed by the US. Secretary of the Interior. All
serve without compensation. The New Jersey Legislature supplemented the federal law by
passing the Pinelands Protection Act in June 1979, stating that development must be highly
regulated in the 299,000-acre Preservation Area. This remote interior area possesses the largest
tracts of unbroken forest and much of the economically vital blueberry and cranberry industry.
The surrounding area, the Protection Area, contains a mix of valuable environmental features,

farmland, hamlets, subdivisions and towns.

While a plan to protect the Pinelands was being created, the Governor, with support from
the Act, placed limitations on development. The Act also established a requirement that county
and municipal master plans andordinances conform to the Comprehensive Management Plan
(CMP) which was being developed by the Commission. The Pinelands CMP was adopted in two
phases by the Commission in 1980. In August 1980, the Preservation Area Plan was approved; in
November of the same year, the Protection Area Plan was adopted. While it required no further
legislative approval, it did require approval from both the governor and the US. Secretary of the
Interior. Both approved it in January 1981. On January 14, 1981, the Plan became efl’ective under
state law. The final version constituted the Comprehensive Management Plan for the entire

Pinelands National Reserve.

The CMP includes a transfer of development rights program using pinelands
development credits (PDCs) as defined in the CMP. Because the Pinelands Commission exercises
direct regulatory authority only in the Pinelands Area, the PDC program applies only in the

Pinelands area.

Chapter 10

289

Regional versus Local

Pinelands management was based on the premise that the Pinelands could be protected
primarily within the existing framework of governmental authority if a regional perspective could
be attained (Pinelands Commission 1997 p. 2). Decisions on what areas to preserve, what areas
to develop, and to what degree, had to be made within a regional context. In New Jersey the
county is a very weak form of government, with very few land use responsibilities. County
participation in the Pinelands program occurs through representation on the commission. While
portions of fifty-three municipalities are included in the Pinelands, no more than twenty are
wholly contained. This creates administrative challenges for both the Pinelands Commission and
the towns. The New Jersey state constitution vests all powers with the state, expect those which
the state assigns to local governments, so constitutionally New Jersey is not a home-rule state.
However, a Pinelands official recognizes that traditionally New Jersey is a home-rule state.
Home rule is an issue for all municipalities within the Pinelands. The Pinelands Commission is
perceived as having infiinged on home rule because it substantially limits local municipalities’
freedom. While the Pinelands Commission faces this issue every day, it is much less of an issue
today than when the program was first initiated. In actuality, a number of towns view the
Pinelands Commission as a partner or at worst a convenient scapegoat (Stokes 1997). For
instance, township officials may be in agreement with the Pinelands Commission regarding a
policy, strategy or action; however, they would prefer that the Pinelands Commission be the one
to implement or enforce it. The townships now realize that the Pinelands Commission actually
assists them; as a result the Pinelands Commission has a fairly good relationship with local

officials.

Chapter 10

c—rfl" F .1'1! I.

, 29o
Regulatory Authority

The Pinelands Commission is an independent state agency established pursuant to both
federal and state legislation. The Pinelands Commission was initiated in 1979 after Congress
passed the National Parks and Recreation Act of 1978. A section in that act established the
Pinelands National Reserve. The Pinelands was the first area that Congress recognized as a
unique and very special ecological area that could not be appropriately managed as a national
park or a national wildlife refuge. Altematively, they sought a method to protect the resource
without purchasing the land. A new approach was needed for several reasons. At the time, the
federal government realized that it could not acquire every piece of property deemed important.
Additionally, people were an integral part of the landscape; people were part of what made the
area special. Even if the property could be purchased, people would be displaced, damaging one

of the very attributes that gave the area its significance.

The federal legislation was based primarily on a report authored by scientists
predominantly from Rutgers University. This report recommended a core ecological area for
preservation surrounded by a buffer zone. The current Pinelands boundary generally corresponds
to this recommended area. Both the core and buffer areas were based on ecological criteria. Both
capture the Pinelands ecology - the characteristic flora, fauna, water and soil. Natural
characteristics were primarily used because the human side of equations flows from the natural.
The delineation of the Pinelands attempted to follow ecological boundaries; however, in order to

identify a tangible boundary exceptions were made.

The federal law was in essence an invitation to the state of New Jersey to take steps to
protect the Pinelands in exchange for financial assistance. New Jersey accepted the invitation.

Governor Byme was very interested in protecting the Pinelands and established the commission

Chapter 10

291
administratively, imposed development controls administratively, and then sought state

legislation to permanently charter the Pinelands Commission and establish all the authorities of

the commission. State legislation was passed in 1979 with the Pinelands Protection Act.

The regulatory authority differs in the two areas of the Pinelands National Reserve.
While the Pinelands Commission has planning responsibilities over the coastal area, it has no
regulatory authority. The Federal Coastal Zone Act governs the coastal area. Because there was
a state coastal regulatory program already in place, the state continued to allow this regulatory
authority, but it had to follow the recommendations of the Pinelands Commission. In efl’ect, the
Pinelands Commission is advisory to the State Department of Environmental Protection in the
coastal area. In the Pinelands Area, however, the Pinelands Commission has extensive regulatory

authority.

Program Initiation

The Pinelands Protection Program has many components, some regulatory and others
not. These components include the CMP, fee acquisition program, public education and public
information, research, intergovernmental coordination, land use management and water quality
protection. The CMP is associated with the regulations and regulatory programs that govern land
use and environmental quality in the Pinelands, and therefore includes all the regulatory
components of the Protection Program. The remaining non-regulatory components are often
overlooked, for example research and education programs. While reference to the Pinelands
Protection Program includes all components, regulatory and non-regulatory, reference to the

CMP includes only the regulatory components.

Chapter 10

 

292
Two programs within the CMP assist in directing development to appropriate areas while

protecting culturally and ecologically valuable areas: the Pinelands Credit Program (the TDR

program) and the Land Use Program.

The purpose of the Pinelands Credit Program is to shift development away from
important environmental and agricultural areas to other areas. It provides a way for landowners
in the environmental and agricultural areas to benefit economically from the preservation of their
sensitive lands and the increased land values in other areas zoned to allow more residential
development (Pinelands Commission 1996 p.5). Developers benefit by being able to develop at

higher densities than would be permitted without transferring development rights.

The Land Use Program divides the Pinelands into land use categories and sets limits on
the type and amount of development. While the Pinelands Protection Act provided a starting
point for identifying areas to protect and areas to develop, the Commission had first to collect and
analyze data identified in both the state and federal legislation. Through this work the Pinelands
were designated into nine land use capability areas: Preservation Areas, Forest Management
Areas, Agricultural Production Areas, Special Agricultural Production Areas, Rural Development
Areas, Regional Growth Areas, Pinelands Villages, Pinelands Towns, and Military and Federal
Installation Areas. Based on the categories and limitations of the Land Use Program, local
municipalities adopt zoning ordinances which specify permitted land uses and intensities
(densities) for the various zoning districts located in each of the land use areas (Pinelands

Commission 1996 p. 4).

The Pinelands program structured all basic zoning so it would not result in a taking. For
example, in the central area, where there was very little agriculture, low-intensity recreation uses

such as campgrounds, forestry, wood cutting, cranberry and blueberry growing were permitted.

Chapter 10

293
All of these uses are profitable. In 1980, there was very little demand for traditional development

in this central area, where property was selling for $200/acre. The land uses which the Pinelands
Commission permitted were compatible and consistent with the actual land uses in that area. The
Pinelands Commission then added TDRs to the equation. The TDR program was never
structured to “compensate.” Rather, the Pinelands Commission structured a program where
TDRs are a zoning right that is allocated to the property, no different than if it were zoned for one
home for every acre of land (Stokes 1997). Because the TDRs are zoning rights, when
considering permitted uses in a zoning ordinance, both the onsite uses and the TDRs must be

considered.

The program structure does not support TDRs as compensation for property. The
Pinelands Commission never attempted to calculate value of TDRs relative to sending-property
retums, nor did it set a goal to provide compensation to sending properties by achieving a certain
per-acre return. This was never part of the TDR allocation formula. While the Commission did
look very closely at what the return would be, it did not look at it as a form of compensation

(Stokes 1997).

Sending Area

The sending areas are comprised of the most fragile natural areas and largest farming
areas in the Pinelands. (See Figure 10-1) These areas represent three of the nine land use areas:
the Preservation Area District, Special Agricultural Production Areas and Agricultural Production

Areas.

The Preservation Area District is the heart of the Pines from an environmental point of
view (Pinelands Commission 1997). This area contains the Pine Barren rivers, the unique pygmy

forests, inland marshes and bogs. The plan created a Preservation Area District where
Chapter 10

294

Pinelands
Sending
Areas

 
   
     
  

March 1996

I N Pinelands Boundary Area
a Preservation Area District
. Agricultural Production Area

I Special Agricultural Production Area

Figure 10-1: Sending Areas

Chapter 10

295

conventional residential, commercial and industrial development is largely prohibited. Generally,
only land uses compatible with the ecology of the central Pines area permitted, such as forestry,
berry cultivation and low impact campgrounds. The Preservation Area District covers 299,000

acres .

The Special Agricultural Production Area is contained within the Protection Area.
Because cranberry and blueberry farming are economically, environmentally and aesthetically
vital to the Pinelands, they warrant special protection and encouragement. The plan allows
municipalities to designate Special Agricultural Production Areas where land uses are limited to
the cultivation of berries and other native plants, other environmentally compatible agricultural
activities, housing for people with links to the Pinelands and for agricultural employees. The

Special Agricultural Production Area covers 32,500 acres.

The plan also provides for Agricultural Production Areas where fanning and related
activities are the dominant land use and will be accommodated and encouraged. These areas,
found within the Protection Area, are comprised of blocks of more than 1,000 acres of active

fannland and adjacent farm soil. The Agricultural Production Areas cover 67,200 acres.

The Preservation Area District, Special Agricultural Production Areas and Agricultural
Production Area have limited onsite development opportunities due to their environmental and
agricultural importance. PDCs add to the value of property. They may be severed from a
property and then sold separately, apart from the property itself. The properties from which
PDCs have been severed still have value because they can be used for a variety of farming,
recreation and other conservation uses. The total number of PDCs available from these three

sending-areas properties is 5,625, translating into 22,500 development rights.

Chapter 10

__...—-

296
Typically, the right to build a home on a sending property is lost once the PDCs are

severed. However, the Pinelands Plan does permit certain property owners to reserve the right to
build one or more homes in the future (Pinelands Commission 1996 p. 6). To reserve this right,
the property owner must either a) apply for approval to build the home(s) or subdivide the lot(s)
before the PDCs are severed or b) reserve in the deed restriction a future right to build. The latter
option does not require the property owner to submit a formal development application, nor does

it guarantee future approval to build or subdivide.

Receiving Areas

The primary receiving area for severed development rights are Pinelands Regional
Growth Areas. To identify Regional Growth Areas the Commission analyzed present and
anticipated growth patterns. It determined which municipalities were experiencing development
pressure and capable of accommodating growth. As of September 1997, Regional Growth Areas
are found in twenty-one municipalities and one uncertified municipality where development is
encouraged and supported by the Comprehensive Plan and by municipal plans and ordinances.
The uncertified municipality is South Toms River Borough, whose master plans and zoning
ordinances have yet to be certified as being in conformance with the Pinelands Comprehensive

Management Plan.

The Commission estimated the number of new housing units that could be
accommodated. These units were then distributed among the Regional Growth Areas. The Plan
defines base densities ranging from one to 3.5 dwelling units per acre of developable land with
sewers. Any other land use may be permitted as long as the Plan’s environmental conditions are
met. The Regional Growth Areas cover 80,000 acres. Given that approximately half of this land
is developable at an average density, 80,800 units can be built. An additional 46,200 units can be

built with the use of PDCs.

Chapter 10

297

Through their zoning ordinance, municipalities specify how many homes can be built in
residential zoning districts with and without PDCs, i.e. base and bonus densities. Once
developers determine how many residential units they want to build in a development, if the
number exceeds what is permitted without PDCs, they buy transferable development rights for
the additional units. One transferable development right is needed for each additional lot or
housing unit. One PDC is equivalent to four transferable development rights. Therefore, a
quarter-PDC yields one additional unit. This has added confusion to the Pinelands Credit
program. When a development plan for a receiving area receives final municipal approval, the

developer redeems the requisite number of PDCs.

The main incentive for receiving-area developers to use PDCs is to increase density.
PDCs are valuable because they permit developers to increase the number of residential units that
can be developed on properties in the Regional Growth Areas. Municipal zoning ordinances
permit development at two densities, a base density that is lower, and a higher density (bonus
density) when PDCs are used or redeemed. Most municipalities have designated residential

zoning districts that encourage the use of PDCs.

Another incentive to use PDCs in the receiving area is to achieve a variance. Developers
or landowners in the Pineland Growth Areas can seek variances from zoning ordinances with the
use of PDCs. For example a variance may be sought to permit residential development in a
business district. Under the Pinelands Plan, municipalities can grant these variances when PDCs
are redeemed. The number of PDCs will vary according to the zoning district in which the
development is to be located. Generally, a business use in a residential zone can be approved if
the property owner proposes to redeem the same number of PDCs that could be used if the

property were residentially developed. A residential use in a business zone will involve the use

Chapter 10

298
of PDCs for each home to be built or residential lot to be subdivided (Pinelands Commission

1996 p. 15).

A final receiving-area incentive to use PDCs applies to landowners whose parcel is too
small to build upon, according to the municipal zoning ordinance. Municipalities are authorized
to approve variances that would permit construction on such sites if one transferable development
right (or .25 PDC) is redeemed. Such variances may be considered for any lot if it is located in a
Pinelands Growth Area, village or town. Lots seeking such a variance must be 20,000 square feet

or larger if sewer service does not exist.

PDC example

The following is a subdivision example, with and without PDCs. If a development is
located in a zoning district that permits development at a density of one lot per acre, and the
property to be developed is ten acres, the project will yield ten building lots. This same district
allows for a density increase to 1.5 lots per acre when PDCs are redeemed. Therefore, if the same
development were to utilize PDCs, fifteen lots could be developed. In this case, five transferable
development rights (or 1.25 PDCs) would be needed to subdivide the five additional lots. If the
development can yield additional building lots with minimal increase in raw land costs,
planning/design costs and improvement costs, the cost per lot decreases while the number of lots
increases. The yield from all fifteen lots can be substantially higher than from ten lots, even
though the smaller lots are typically sold at a lower price. In the ten-acre example, given the
development cost includes land costs, planning/design fees, site improvement costs and
contingencies, a ten lot subdivision might cost $225,000 to develop. If each lot is sold for
$25,000, they would yield $250,000 or $25,000 more than the costs. If this same property was
developed into fifteen smaller lots, and improvement and other costs remained relatively stable,

the subdivision might cost $255,000. If each of these lots were then sold for $22,000, they would
Chapter 10

299
yield $330,000, or $75,000 more than the subdivision costs. Even considering the cost of

development rights at $6,000 each, the fifteen-lot subdivision would still have a net return

($45,000) almost double that of the ten acre lot plan.

Allocation Method

The Pinelands Commission calculated the number of receiving opportunities given the
zoning. Base zoning in the Regional Growth Areas would result in 60,000-80,800 dwelling units.
With TDR, municipalities allow approximately a fifty percent increase yielding 30,000-40,400
additional receiving opportunities. This number was discounted by forty percent, because not
everyone would use TDRs, in order to establish the total number of rights to be allocated. Using
this method, the Commission determined that 18,000-24,240 rights needed to be allocated.
Within Pinelands sending areas, 22,500 development rights were allocated. Within receiving
areas there are 46,200 opportunities to use TDRs. This means the opportunities to use TDRs are
better than two times the rights allocated; i.e. the receiving to sending opportunity ratio is better

than two to one.

The Pinelands Commission examined the sending areas and considered what areas were
most important. They knew that they wanted to base the allocation on land characteristics and
not on prior zoning or development value. The latter would have been difficult to administer and

very costly. The commission based TDR allocation on land characteristics and size of property.

The Pinelands had three types of land that were predominant in the Pinelands sending
area: farmland, upland wooded land, and lowland wooded land. These three types of land
characteristics needed to be tied to allocation. The Commission began with wooded upland and

assigned a unit of wooded upland a factor of one. Based on sales data, a unit of wetland was

Chapter 10

300

selling for roughly twenty percent of what wooded upland was selling for in remote areas.
Therefore a unit of wetland was assigned a factor of one fifth, or twenty percent of the wooded
upland. Since an investment was made in improving farmland, farmland received a factor greater
than the wooded upland. Generally speaking the farmland was closer to developing areas, so
farmland was valued at twice that of wooded upland. Using the acreage estimates, the Pinelands
Commission calculated how many acres of farmland, wooded upland and wetland there were.
Applying these factors (one, one fifth and two) and dividing that into the number of right, the
Commission determined that 9.8 acres of wooded upland (the standard) were needed for a
development right. (In hindsight this should have been rounded off to ten acres, but at the time
the Commission felt they had to be precise.) Using the wooded upland standard, 4.9 acres of
farmland were needed for one right and forty-nine acres of wetlands were needed for a single

right.

The Pinelands Commission uses the following allocation principles (from The Pinelands
Development Credit Program Information bulletin. April 1996):

0 Owners of small properties (generally 4356 square feet or more) are guaranteed at least
one right if they have owned the property since February 7, 1979. This guaranteed right
is relinquished if the property is sold before the PDC is severed.

o Developed properties, either with homes or businesses, do not receive as many rights as
similar but undeveloped properties.

0 Actively farmed land located in one of the two agricultural areas and land approved for

mining activities receive one right for every 4.9 acres.

Lands that have been mined do not receive an allocation.

Wetlands receive one right for every forty-nine acres.

Other lands in one of the two agricultural areas receive one right for every 4.9 acres.

Other lands in the Preservation Area district receive one right for every 9.8 acres.

To receive PDC allocation, eligible property owners must complete a simple application
form and send it to the Pinelands Commission. The Commission analyzes the property and
calculates the allocation. PDCs are allocated on the basis of property characteristics. Each

property in a sending area is evaluated to determine the precise number of rights that can be

Chapter 10

301
transferred. The number of PDCs represents the relative worth of different types of land and the

Comprehensive Management Plan goals of encouraging farming in certain areas.

Once the number of PDCs is calculated the owner is notified, typically within forty-five
days. While receiving an allocation is the first step in selling PDCs, it does not commit the owner
to sever the rights nor does it prevent the owner’s future options. Allocation only identifies the
number of rights that can be transferred. Knowing how many development rights are assigned

helps owners better estimate the value of their land (Pinelands Commission 1996 p. 6).

PDCs may be allocated to property owners outside of the normal sending area (for
example in Forest or Rural Development Areas) to alleviate a property hardship, for example
when a property has severe environmental constraints and cannot be developed without harming
the environment. Properties that may not meet zoning and environmental requirements can either
be developed using a Waiver of Strict Compliance, or be allocated TDRs using a Waiver of Strict
Compliance. If development is permitted, TDRs must be purchased to rrritigate the effects. If

development is not permitted, TDRs are allocated as an alternative to development value.

A Waiver of Strict Compliance requires the Pinelands Commission to apply two tests: 1)
is there an extraordinary hardship (i.e. is there a taking) and 2) will the development exception
result in a substantial impairment of the Pinelands resource. If there is an extraordinary hardship
but the development will not cause substantial impairment, with a Waiver of Strict Compliance
(exemption) the development is permitted but mitigation of the environmental effect is required
through the purchase of transferable development rights. Protection of other land is accomplished
through the purchase and redemption of PDCs. By law, the Pinelands Commission can only
grant these waivers when a bona fide hardship exists and when the waiver results in a slight

departure from normal zoning and environmental controls.

Chapter 10

302

If there is an extraordinary hardship and the development would cause substantial
impairment then PDCs are awarded to alleviate the hardship through a Waiver of Strict
Compliance. The Pinelands Commission may approve a Waiver of Strict Compliance which
allocates PDCs to the property so the owner can sell them and receive a financial return equal to

the property’s fair market value (Pinelands Commission 1996 p. 5, p. 8).

Transfer Procedure

In the private market, PDCs are sold in two different ways: attached to property and
severed from property. PDCs are automatically transferred from owner to new owner when
property is sold, as long as the rights have not yet been severed. Fee ownership of a sending
property usually entitles the property owner to later sever and sell the rights. However, if the
property is small, approximately 4,356 square feet, the guaranteed allocation of one transferable
development right is lost if the right is not severed by the original owner. PDCs can be sold to
interested buyers, the Pinelands Development Credit Bank (PDC bank) or another governmental
agency. Potential buyers may be contacted directly or indirectly through listings or
advertisements. The PDC bank maintains a listing of people interested in buying PDCs.
Additionally, the PDC bank generates a potential sellers list which is provided to developers and
other potential buyers of PDCs. While PDC sales cannot be completed until certificates are

issued, potential buyers can be investigated.

To sell PDCs separately and apart fiom the property, a Pinelands Development Credit
Certificate must first be obtained. The certificate indicates that the PDCs have been officially
severed from the sending property. Developers in the market for PDCs may be more interested in

dealing with people who have certificates in hand, recognizing that the entire certificate process

Chapter 10

303
can take several months. The PDC bank maintains a registry of people who have severed PDCs

and received PDC certificates.

In order to apply for a certificate a landowner must first receive a PDC allocation. To
receive PDCs, eligible property owners must complete a simple application form and send it to
the Pinelands Commission. PDC certificates are issued by the PDC bank after the owner applies
for a certificate, completes a title search and records a permanent restriction on the deed to the
property. A sixty-year title search and a twenty-year search of liens and judgements are required
under state law. Because separation of PDCs from the property permanently extinguishes the
right to use or develop the property for certain uses, a deed restriction is required. Although the
property may be sold or transferred like any other property, the use of the land is controlled by
the deed restrictions. Deed restrictions are typically not recorded before the PDC bank is
consulted. Rather, the property owner uses sample restrictions to prepare a proposed restriction.
If the property is mortgaged, a release from the mortgage company is also required. The release
indicates that the lender understands that a deed restriction will be placed on the property, agrees
to the terms of the restriction and acknowledges that the PDCs can be sold independently from
the property after the restriction is recorded. Getting a release from a mortgage holder is
generally not a problem because the mortgage is based for the most part on the farm value of the
property, not its speculative value. Secondly, the development rights address some of that
speculative value because after rights are sold the underlying farm value remains. When the
paperwork is complete, the owner sends the PDC bank a check to cover the recording fees. The
bank will record the restriction and issue the PDC certificate. A typical cost for severing PDCs is

less than $200 (Pinelands Commission 1996 p. 9-10).

The market determines the PDC price; a fair price is one to which a knowledgeable seller

and knowledgeable buyer agree (Pinelands Commission 1996 p.10). To assist sellers in
Chapter 10

304
determining what a fair price is, the PDC bank maintains a listing of all PDC sales and prices.

Additionally, sellers with the assistance of the PDC bank can determine how many rights are
currently being marketed for sale and how many are being sought for purchase. Another method
for estimating PDC value would be to calculate the increased profits PDCs may yield in a specific

development project.

Buyers may enter into an option to purchase PDCs. This type of arrangement may allow
the buyer to defer purchase costs until he/she needs to redeem the rights. Because an option
represents an interest in the PDCs, it must be reported to the PDC bank within ten days. The
Bank will issue a new PDC certificate in the name of the current owner with the option noted.
This protects the option holder from a subsequent transfer without his or her agreement
(Pinelands Commission 1996 p. 12). Any change in ownership interest in a PDC must be

recorded with the PDC bank, including joint ventures and other partnerships.

A developer does not need to own or redeem the required number of PDCs until a final
municipal approval is sought. PDCs must be redeemed when the project receives final approval.
For subdivision and site plans, final subdivision or site-plan approval constitutes final approval.
Preliminary subdivisions and site plans may be approved by a municipality without PDCs being
redeemed. In such cases, the preliminary approval will be conditioned upon the redemption of
PDCs when final approval is given (Pinelands Commission 1996 p. 16). This provides
developers with an Option to stage their purchase and redemption of PDCs. For projects that do
not need subdivision or site-plan approval, PDCs must be redeemed when a municipal zoning or

building permit is issued.

When final approval is granted, the developer completes the original PDC certificate, gets

the responsible municipal official to sign it, and returns it to the PDC bank so that a PDC
Chapter 10

 

305

certificate can be issued to the new owner. This must be done within ten days of receiving
approval. Simultaneously, the Pinelands Commission should be sent notice of the municipal
approval, along with a copy of the PDC certificate. If all the appropriate zoning and
environmental standards are met, the commission will clear the municipal approval. To protect
applicants, the PDC bank will not formally redeem the PDCs until the municipal approval is
cleared by the Pinelands Commission. The PDC bank will officially notify the applicant and the
municipal official at which time the redeemed PDCs are gone in perpetuity (Pinelands

Commission 1996 p. 16).

TDR in Suite

Because TDR was relatively new and untested, the Pinelands Commission was very
concerned that if the TDR program were to fail, the overall Pinelands Protection Program would
fail. They made a conscientious decision early on that the Pinelands Program would not rise or
fall on the basis of the TDR success. For this reason, the PDC program is part of a suite of
programs that together protect the Pinelands. The primary goal of the Pinelands Protection
Program is to protect the Pinelands, not to develop it. To accomplish this goal the Pinelands
Protection Program has a number of different elements including research, education and
intergovernmental coordination. Three elements have a direct bearing on the TDR program: Fee

Acquisition Program, Infrastructure Development Program and the Land Use Program.

The Fee Acquisition Program is run by the Department of Environmental Protection
(DEP). This in essence is a fee acquisition program where the State acquires properties that the
Pinelands Commission recommends for purchase. The Pinelands Commission recommended that
approximately 100,000 acres of land be added to the state’s open space inventory. In 1980,

nearly 250,000 acres were in the state’s inventory and therefore actively managed by the state. At

Chapter 10

 

 

306
this time, 67,000 acres have been acquired. Many of the acquired areas are in the Preservation

Area, which is also one of the TDR sending areas. Although the state is not a TDR participant,
when the Pinelands Commission developed the TDR program it considered state property

purchases. With state purchased land, the associated TDRs are not going to be on the market.

The Infrastructure Development Program is supported by a statewide bond referendum.
This referendum was passed with an overwhelming margin in the late 19803 and authorized the
Pinelands Commission to provide financial help to municipalities and in some cases counties to
improve sewer, water and transportation systems. Because there was not enough money to do it
all, the initial focus was on sewer systems. All of the original funds, $30 million, have been
spent. There is a current bill pending in the state legislature to renew funding at a higher level,
$70 million, to authorize a second bond program. Infrastructure development is targeted at the
Regional Growth Areas that are the primary TDR receiving areas. If areas are designated for
growth, they must be suitable for growth. In some cases this means the public needs to invest in

infrastructure.

The Land Use Program with its land capability designations is closely tied to the TDR
program. The TDR program is structured to be a true bonus (Stokes 1997). It is deliberately
structured and implemented as a non-critical part of the Land Use Program. While the Pinelands
Commission lays out policies (at times these are equivalent to zoning policies), it does not adopt a
zoning ordinance. The municipalities have to incorporate all Pinelands Commission policies and
requirements. The Pinelands Commission can opt not to approve an ordinance. While the
Pinelands Commission has certification authority, it tries to permit municipalities flexibility while
not undermining the plan for the Pinelands. The Pinelands Commission has informed
municipalities that regional areas could be adjusted. Without flexibility, municipal support would

have been difficult to obtain.
Chapter 10

 

 

307

Natural, cultural and physical attributes were used to identify the nine land use areas.
The Pinelands Commission went through a conflict resolution process with all areas that had
conservation attributes and development attributes, i.e. a good conservation rating and a good
development rating. Areas targeted for conservation are the Preservation Area and the Forest
Areas. Agricultural Production Areas have at least 1,000 acres of land. Within the Special
Agricultural Production Areas only agriculture and housing related to Pinelands horticulture or
the berry industry are permitted. Rural development areas are the transitional areas. Growth
Areas are based on development trends and patterns, where land speculation was greatest, where
infrastructure exists, and where it is planned. Pinelands villages are the traditional communities
that accommodate infill residential, commercial and industrial development. There are forty-four
villages in the National Reserve, including eight in the Preservation Area. Pinelands Towns are
larger and typically more dense. Military and federal installation areas are a substantial resource

to the region and state.

Bank

The Pinelands Credit Bank is an independent state agency established to help the
Pinelands Commission implement the Pinelands Credit Program. It was set up as an independent
agency. The director of the bank, Jack Ross, also manages the Pinelands Acquisition Program for
the State Department of Environmental Protection. While the Pinelands Commission created the

Pinelands Development Credit Program, the Pinelands Credit Bank acts as a facilitator of the

program.

The bank was funded with five million dollars to be a buyer of credits under certain

circumstances. While its role as purchaser has been very limited, the ability of the bank to make

Chapter 10

 

308
purchases lends stability to the TDR program. The funding was part of the legislation that

created the bank in 1985. The PDC bank legislation had a sunset provision, in part to assist
passage of the legislation. The PDC bank did not become operational until 1988. When the bank
purchases credits, it pays up to eighty percent of private market value. Rights were going for
$3,950 per right, so the bank paid $3,160 per right. The PDC bank’s ability to purchase TDRs
expires every five years; it has been renewed twice and currently there is another bill. While the
bank has the ability to resell TDRs, it prefers to act as a facilitator rather than an active seller

because it does not want to be in direct competition with sending-area landowners.

The bank functions in a number of other roles. The PDC bank provides information on
PDC zoning requirements and detailed zoning information related to specific parcels. The PDC
bank maintains all PDC transfer and potential transfer information. It maintains a listing of
people interested in buying PDCs, a list of potential sellers, a registry of people who have severed
PDCs and received PDC certificates and a listing of all PDC sales and prices. With bank
assistance, sellers can determine how many rights are currently being marketed for sale and how
many are being sought for purchase. The PDC bank issues PDC certificates, redeems PDCs and
maintains all information regarding ownership of PDC certificates. Any change in ownership
interest in a PDC must be recorded with the PDC bank within ten days; this includes joint
ventures and partnerships. The PDC bank also works closely with the Pinelands Commission and
with the municipalities in the transfer procedure and the utilization of TDRs in developments.
For example, the PDC bank will not formally redeem the PDCs until municipal approval is

accepted by the Pinelands Commission.

Chapter 10

 

309
Status

Since the adoption of the CMP, the PDC program has gradually taken hold.
Establishment of the Burlington County Bank and the state PDC bank has encouraged program
participation. The status of the Pinelands Credit Program can be examined by looking at the
number of rights allocated, the number of rights purchased, the acreage under protection and the

number of rights used in development projects.

During the initial program years, a number of rights were allocated. This tapered off in
the middle 19803 and gained strength in the late 19805. Nearly 800 letters of interpretation
seeking allocation were written from 1981 to 1996, resulting in the allocation of 4,427 rights.
(See Table 10-1) In 1988, the Pinelands Commission analyzed the number of letters sent for
PDC allocation and the number of PDC allocated. (See Table 10-2) The majority of letters
(nearly fifty-two percent) came from landowners whose allocation was less than one PDC; thirty-
five percent from landowners whose allocation was between one and five PDCs; eight percent
from landowners whose allocation was between five and ten PDCs, and only five percent from
landowners seeking allocation for ten PDCs or more. This implies that a developer may have to
contact a number of PDC sellers in order to obtain multiple PDCs. This may be viewed as an
obstacle to program success. Although only five percent of the letters sent were from landowners
seeking allocation of ten PDCs or more, over fifty percent of the total number of PDCs allocated

were associated with these landowners.

Chapter 10

 

310

Table 10-1: Pinelands Development Credit Program
Allocation of Rights per Year

 

 

 

Number of Letters Number of Number of
Year of Interpretation PDCs Allocated Rights Allocated
1981 7 83.0 332
1982 25 171.75 662
1983 37 128.11 518
1984 33 55.63 217
1985 22 30.76 123
1986 13 21.32 30
1987 8 9.51 44
1988 8 NA 38
1989 81 NA 386
1990 152 NA 714
1991 77 NA 269
1992 17 NA 34
1993 127 NA 246
1994 133 NA 504
1995 27 NA 115
1996 30 NA 195
Total 797 NA 4427

 

Source: Report to the Pinelands Commission October 1988; Pinelands Development
Credits Summary Report through December 31,1995; Pinelands Development Credits
Summary Report through December 31,1996

Table 10-2: Letters for Allocation

 

 

Number of PDCs Number of Letters Number of PDCs
Less than 1 79 24.57
>1 and <5 53 108.51
>5 and <10 12 82.00
>10 8 285.00
Total 152 500.08

 

Source: Report to the Pinelands Commission October 1988

The total number of rights purchased or transferred totaled over 1,200. (See Table 10-3)
The number (573) purchased by the two public banks working within the Pinelands, the
Burlington County Pinelands Development Credit Exchange and the New Jersey Pinelands
Development Credit Bank, was only slightly more than the number of rights purchased by private

parties (571.5). While the banks purchased the majority (89.5%) of rights in the program’s first

Chapter 10

311
six years, from 1991-1996 private parties purchased the majority (eighty-three percent) of the

rights. While the predominant method of transfer was through sale, where the seller received

consideration, 114 rights were transferred by other means including donations.

Table 10-3: Rights Purchased or Transferred

 

 

Purchased by Purchased by Total Purchased Purchased Other
Year Burlington Co. NJ Pinelands by Public by Private Rights Total
PDC Exchange PDC Bank Banks Party Transferred
1982 4.5 13.5 18 5.5 0 23.5
1983 35.5 106.5 142 10 0 152
1984 26.75 80.25 107 0 0 107
1985 7.25 21.75 29 3 0 32
1986 4.5 13.5 18 19 0 37
1987 2.25 6.75 9 0 0 9
1988 NA NA 1 0 0 1
1989 NA NA 1 4 0 5
1990 NA NA 146 30 22 198
1991 NA NA 8 l 10 0 1 18
1992 NA NA 21 33 90 144
1993 NA NA 0 23 0 23
1994 NA NA 0 109 0 109
1995 NA NA 59 141 0 200
1996 NA NA 14 84 2 100
Total NA NA 573 571.5 114 1258.5

 

Source: Report to the Pinelands Commission October 1988; Pinelands Development Credits Summary
Report through December 31, 1995; Pinelands Development Credits Summary Report through
December 31, 1996

The number of acres protected is often used as an indicator of TDR program success.
The Pinelands program’s level of success has improved over the years. Similar to the allocation
of rights, the number of acres preserved has been cyclical. (See Table 10-4) From 1981 to 1984,
nearly 2,500 acres were protected. The number of acres preserved declined during the middle to
late 19803. The number dramatically increased in 1990, when nearly 2,500 acres were preserved
in that single year. The middle 19903 saw another downturn in the number of acres preserved
under the TDR program. By 1996, the Pinelands Credit Program had preserved over 13,000

acres, with sixty-one percent of this total being in the Preservation Area. By August 1997, 15,040

Chapter 10

312

acres were preserved, with 9,199 acres in the Preservation Area. (These figures were rounded off

to the nearest whole number.)

Table 10-4: Land Protected through PDCs

 

 

# of Rights Preserva- Agri.Pro. Special Other Annual

Year Rights Severed tion Area Area Agri Pro. Mgmt Total

Allocated Area Area

1981 332 NA NA NA NA NA NA
1982 662 40 686 0 0 686
1983 518 152 219 801 0 1,021
1984 217 107 305 0 476 781
1985 123 29 387 0 10 397
1986 30 18 0 107 0 107
1987 44 9 0 58 0 58
1988 38 2 1 0 0 l
1989 386 4 27 0 0 27
1990 714 257 1,728 593 117 2,437
1991 269 259 895 1,423 0 2,319
1992 34 213 1,730 340 0 2 2,071
1993 246 4 41 0 0 41
1994 504 248 1,723 516 133 2,372
1995 115 135 275 345 30 650
1996 195 79 164 223 8 1 396
8/1997 NA 121 1017 452 207 2 1676
TOTAL 4427+ 1,677 9,199 4,858 981 5 15,040

 

Source: Pinelands Development Credits Summary Report through December 31, 1995; Pinelands
Development Credits Summary Report through December 31, 1996: Pinelands Development
Credit Bank August 1997 update.

The number of rights resold from 1981 through 1996 was 434. (See Table 10-5) Of those
rights, 248 were purchased from banks. Of particular interest is the change in roles between the
bank and private parties. Prior to 1991 there were no resales between private parties. After 1992,
there were no resales to private parties from public banks. In the years between 1990 and 1992,
rights were resold from both private parties and public banks. This indicates that predominant
role of the bank as a resaler ofTDRs in the program’s youth and the decline of that role as the

private market gained strength. This illustrates how a bank can firnction as a catalyst.

Chapter 10

 

3 13
Another indicator of TDR program success is the number of rights that are actually

transferred for development use. The number of rights proposed for use fiom 1981 through 1996
is 1,982 in a total of 377 projects. Of those proposed for use, close to twenty-five percent (483)
were actually redeemed, leaving 1,499 rights proposed in active projects. In 1996 alone, 152

rights were proposed for use in forty-seven new projects.

Given that the Pinelands has a variety of housing markets and one TDR is equivalent to
an additional unit, no matter what type of development, the yields to a developer or builder are
quite different. Currently rights are selling at the lower end of the range, partly because the
people who need rights cannot afford them. They get priced out of the TDR market. Demand

would drop if they could not buy a right that is affordable to them.

Table 10-5: Resales and Secondary Transfers of Development Rights

 

 

Rights Purchased Rights Purchased Other Rights Total
Year from Public from Private Transferred Rights
Banks Party Transferred
1982 0 0 0 0
1983 O 0 0 0
1984 9 0 0 9
1985 5 0 0 5
1986 26 O 0 26
1987 38 0 0 38
1988 86 0 0 86
1989 79 0 80 159
1990 1 O 0 1
1991 0 12 0 12
1992 4 14 O 18
1993 0 27 0 27
1994 0 46 2 48
1995 0 40 0 40
1996 0 47 2 49
Total 248 186 84 518

 

Source: Pinelands Development Credits Summary Report through December 31, 1996

Chapter 10

3 14
The PDC program has gained strength over the years. It has mirrored the real-estate

market, showing a decline of activity in the early to middle 19803. The important role of the
public banks, the PDC Bank and the Burlington County Banks, is also evident when looking at
the status of TDRs purchased and secondary sales. Both banks have encouraged program
participation. Nearly twenty years after the Pinelands PDC program was initiated, program
designers, administrators and participants are altering their perspectives. Now that the TDR
program is working, TDRs have been purchased, acres have been preserved, rights have been
transferred, and rights have been redeemed, program participants want the program to perform

better.

Program Future

Due to the novelty of the PDC program and its complexity, municipal offrcials,
developers, and property owners have difficulty understanding its operation. Although both the
CMP and municipal zoning ordinances can be clarified, the PDC program is difficult to
comprehend. Interviews with municipal officials, developers and landowners confirm that the
program suffers from a great many misperceptions. It is also noteworthy that the success of other
TDR programs is attributed in part to an aggressive outreach and education program, a feature

absent in the Pinelands due to funding limitations.

To eliminate a degree of program complexity, the Pinelands Commission is considering
altering the allocation formula. There is much confusion regarding acreage and the concept of
one PDC (credit) being equivalent to four development rights. The Pinelands Commission would
have found it very difficult to change any major element of the program, much less a complex
element, during the initial program years. While the Pinelands Commission is now considering
changing the allocation formula, it would never have done this in the first ten years fearing such

an action would erode confidence.

Chapter 10

 

 

315

What direction the program will take relies on monitoring the program. It needs to be
monitored in order understand what is occurring and why. If the program is not firnctioning in
the desired way, it should be changed. The PDC bank will continue to play a critical role in
monitoring the program. The PDC bank tracks every existing credit, including where it is located
at any given time and whether a municipality has ultimately redeemed it for bonus density. The
PDC bank will continue to work closely with the Pinelands Commission on monitoring the

program and evaluating its status.

Critics believe TDR activity levels should be higher. However, the Pinelands
Commission reminds them that was not one of the premises upon which the TDR program was
structured. Because the Land Use Program is well entrenched and the TDR program works,
almost everyone believes that the base densities in receiving areas could be lowered. This would
generate more TDR use. At this point this could be done without undermining the regional land
use program. Housing would be built because developers would buy and use TDRs. The question
_ is whether parts of the receiving area should be downzoned. This could result in a great deal of
controversy and resistance. TDRs would be viewed as less of a bonus and more of a requirement.
Property owners and developers in the receiving area would view this as an exaction. For these
reasons, the Pinelands Commission will not make a conscious decision to downzone receiving
areas (Stokes 1997). Rather, it is considering allowing TDR use for business uses to increase

TDR activity.

Success

There are those within the Pinelands who argue that the PDC program is not successful.

They feel there should be more rights transferred or the rights should be worth more so farmers

Chapter 10

316

can receive a higher return per acre of land. Others argue the program has been very successful,
noting the 15,000 acres preserved (Pinelands Commission August 1997). Because the original
primary goal of the Pinelands Protection Program was the preservation of the ecological and
agricultural resources of the area, the Pinelands Development Credit program has indeed been
successful in achieving this goal. A3 development pressure grows stronger, the program’s firture
success may be more dependent on the transfer of severed rights to development projects.
Another indication of the increased success of the Pinelands PDC program is the price per right.
While the PDC bank purchased TDRs in the middle 19803 at a price of $2,500, the average cost

per right has increased to an average of $4,000 or $5,000 (Daniels and Bowers 1997 p.183).

Applying the Index to the Program

The Pinelands Commission has developed its own set of elements for a successful TDR
program. These elements, which compare well with this study’s Index, include:
Goals
0 Clearly define conservation and development goals
Receiving Areas
0 Locate development areas where growth indicators are strong
0 Test TDR bonuses to estimate market demand and values

0 Clearly specify TDR bonuses and the zoning limits that apply when TDRs are not
used

0 Address development proposals already in the pipeline

0 Target public investments to support growth

0 Avoid rezonings and variances that undermine TDR use
Sending Areas

0 Clearly define sending areas

Chapter 10

3 17
o Distinguish between land uses permitted before and after TDRs are removed

0 Determine how many total rights should be allocated based upon a realistic
assessment of their use in receiving areas

0 Test potential returns against economic goals

0 Keep the allocation formula simple

0 Keep program administration simple

0 Market the program but do not create unreal expectations

0 Be patient and consider a “failsafe mechanism” to help stabilize the TDR market
0 Monitor important activity

0 Periodically adjust the program to correct weaknesses and respond to changing
conditions

Foundation for TDR

Both federal and state legislation provide the foundation for the Pinelands transfer of
development rights program. The Pineland Protection Program’s regulatory programs,
specifically the Comprehensive Management Program and the Land Use Program, gave the PDC
program further legislative support. Additionally, the CMP calls for the coordination of
municipal master and comprehensive plans. Local comprehensive plans and zoning ordinances
seek Pinelands Commission approval. The PDC bank and the Pinelands Commission together

provide the administrative foundation.

Regulatory Process Must Have Sufficient Integrity

The regulatory integrity of each municipality within the Pinelands was not evaluated.
However, the overall regulatory integrity of the Comprehensive Plan and Land Use Program can
be assessed. The Land Use Program with the designation of preservation and regional growth

areas gives the regulatory planning process a structure where TDRs can be utilized. While the

Chapter 10

 

318

Pinelands Commission does not have the regulatory authority to adopt a zoning ordinance, the
fifty-three municipalities have to incorporate all Pinelands Commission policies and
requirements. The municipalities have responded well to their responsibility to follow Pinelands
Commission recommendations. The Pinelands Commission recognized that flexibility was
critical. The commission could not simply tell the municipalities what they could and could not
do, since this would have created more municipal opposition than support. Instead the Pinelands
Commission works in cooperation with the municipalities, resulting in a partnership that allows

the PDC program to function.

Sense of Place

While Stokes does not believe the program promotes a sense of place, he acknowledges
that there is a sense of place in the Pinelands. This made TDR programming appropriate. The
place is identified with the pine forest, the cranberry bogs and sandy soils. Although the
Pinelands program is based on ecological boundaries, the sense of place is dominated by
jurisdictional boundaries. Municipal sense of place remains stronger than any identification
across the Pinelands. This is evident when specific municipalities express discontent that they
have to accept TDRs yet have no preservation area. They do not immediately recognize that they
do have preservation areas, just not within their jurisdictional boundaries. A number of mayors
would like to see the density bonus in their town tied to preservation. The San Mateo, California,
TDR program has addressed this with married sites, where a specific preservation site is

associated with a specific receiving site.

Resource Perceived as Valuable
The Pinelands PDC program is unique in that the resource was perceived as valuable
from the top down. Both the federal and state governments perceived the Pinelands resource as

valuable enough to warrant protection. However, the ultimate success of the PDC program relies

Chapter 10

 

319

on local officials and local residents perceiving the resource as valuable enough to relinquish their

home-rule perspective.

TDR program initiation requires the identification of development and preservation
goals. These goals must be identified and prioritized as critical and secondary. The program
should first address critical goals and work on secondary goals later. This is particularly
important when the program area covers over 900,000 acres and includes a wide range of
communities. Confusion with the Pinelands program is a result of including multiple resources
and resource values. The allocation formula for TDRs indicates the relative values of developed
and undeveloped lands, wetlands, agricultural lands and lands in the Preservation Area. Rather
than enhancing credibility, this may have undermined the intent of the program to preserve
ecologically valuable lands. Even if there is widespread agreement on which lands are valuable,

there may still be controversy regarding what valuation method should be used.

Rapidly Growing Area

The lack of development right redemption in development projects is attributed in part to
the lack of rapid growth in the overall program area and the size of the program area. While areas
with high growth pressure exist in the Pinelands, there are vast areas where development pressure
is low. Because there are alternative areas for growth, the growth pressure in regional growth

areas, villages, and towns is masked.

The Pinelands encompasses a diverse real-estate market, making it an appropriate area
for TDR programming. There is a great deal of variation throughout the region. Stokes believes
that this is one thing that differentiates it from other TDR programs. In the Pinelands, entirely
different characteristics exist in the sending and receiving areas (Stokes 1997). The housing

market outside of Atlantic City is entirely different from the housing market in the western part of

Chapter 10

320
the Pinelands. In Medford township, homes on one to 1.5 acre lots are selling for $300,000 to

$600,000. Twenty-five miles away homes sell for $100,000-$175,000 on 10,000 sq. ft lots. In
Atlantic City there is greater interest in townhouse and multi-family development. In the northern
coastal areas there is a demand for senior housing. There are a number of different markets, and
in each TDRs mean the same thing — one TDR yields one lot or one residential unit. The
Pinelands has a diverse housing market and allows developers to use TDRs for a variety of

development projects.

Diversity of the housing market has a negative side as well. In Stokes’ estimation it will
drive down the price of the right; if the right is overvalued, there will be no higher-density
housing. Generally speaking the return will be somewhat less at higher density than lower
density. That type of housing is driven out of the market because the developers cannot afford to
buy the rights to build; pricing the rights at the lower end depresses the value of the right. In
short, the more diverse the housing market, the more difficult it is to deal with TDR use and

value.

Understanding of Development Demands and Patterns

The Pinelands is primarily a series of bedroom communities, with limited indigenous
industry or business activity. Studies conducted in the late 19703 and early 19803 on
development demand indicated the predominant form of development within the Pinelands was
residential development. This has proven to be true. Currently, housing types are generally
single-family detached, at a variety of densities. Only one or two percent of the housing stock is
comprised of attached or multi-family housing (Stokes 1997). In a couple of areas in Ocean
County, senior citizen housing is very prominent. The predominant interest in development

intensity was probably 15,000-40,000 sq ft lots.

Chapter 10

321
Understanding the development patterns from the receiving side addresses only half the

TDR program. Patterns and practices on the sending side must also be considered. In the
Pinelands, the sending-area property owners are as varied as the housing market. While some
willingly accept a sale price of $4,000 per right, others hold out for $10,000. Property owners
who are content with $4,000 sell their rights quickly. This has prevented an increase in the sales
price, and will continue to do so until the demand greatly exceeds the supply. Currently, the
supply and demand are relatively constant. Because some TDR sellers are willing to sell rights
for $4,000 while there is a wide range in terms of the TDR use, the price has settled at the lower
end of the range. Stokes remarked that developers using the rights for high-end housing were

“making out like bandits.”

It appears that the Pineland did not have a good understanding of the development
demands and patterns or had an understanding but did not design and implement a TDR program
that recognized this understanding. An understanding is needed to set base and bonus densities.
It appears that base densities in the receiving areas were set too high and therefore weakened the
incentive to use TDRs to achieve bonus densities. However, by setting base densities high, the

Pinelands avoided the controversy associated with receiving-area downzoning.

Viable Receiving Areas

The limited number of PDC certificate redemptions indicates that viable receiving areas
have not been established. In the late 19803, receiving areas were evaluated and it was
determined that base densities were too high, the housing market did not demand the high-density
development allowed through TDR use and regional growth areas did not offer prime
deve10pment opportunities due to lack of sewer and water. However, this evaluation summarized
that the program was not faulty and thus it was a matter of time before PDC bonus densities rise

in demand (Pinelands Commission 1988). However, by August 1997, of the 1,677 development
Chapter 10

322

rights severed, only 933 were sold to developers. This implies that the program’s level of success
is more than a matter of time. In part, the lack of success in encouraging development in regional
growth areas is due to program emphasis on land preservation. There is overall acceptance that
the PDC program is successful in achieving preservation goals. This overrides failure in

achieving development goals.

Public Support

A TDR program needs a component, body or agency that can explain how to participate,
as well as the costs and benefits to both developers and sending landowners. The bank is
involved in nearly all sales that occur. The bank brings together buyers and sellers. While the

Pinelands Commission designed the program, the bank markets it. Both need to be successful.

The Pinelands marketing program includes education and outreach. Direct personal
contact and communication is the preferred PDC bank method, although this is limited by
resources. While the Pinelands Commission and bank have not had much opportunity to work
with individual developers, doing perforrnas and design-sketch plans, both realize that such
activity would be very helpfirl in achieving developer support. A number of developers do not
want to do anything out of the ordinary. It needs to be demonstrated that TDR use is not

burdensome and will actually be beneficial.

While Stokes agrees that public support is needed, he is not sure it is absolutely critical
that all stakeholders support the program. When the Pinelands program was initiated, none of the
stakeholders supported it; the development community, the farming community and municipal
officials all opposed it. While the lack of support made implementing a TDR program much more

of a challenge, it did not prevent it from moving ahead. As specified in the federal and state

Chapter 10

 

323 1

legislation, they had eighteen months to complete a comprehensive plan. The Pinelands

Commission was forced to deal with the opposition.

The farm community argued that in order to firm they had to borrow money, requiring
them to use their land as collateral. Farmers feared that land values would be driven down due to
the downzoning required by the TDR program and that lenders would not lend money because
they would not be able to collateralize the loans (Ross 1997). The Pinelands Commission
commissioned studies to demonstrate that this scenario was not true. Business lenders lend
money on the basis of the business persons ability to repay the loan. The collateral is a last resort.
A firmer is only going to be able to borrow enough money to farm. The lender examines the
farmer’s ability to repay the loan. This ability is based on the income the firming business
generates, not on whether the property is going to be subdivided. No lender would lend in excess
of what is needed to operate the fimr, and it takes no more to operate the firm than what the farm
is worth in agricultural use. Even if speculative land value declines, the firm lenders are lending
on the basis of the use of that land as a farm. Lender uncertainty has not been a problem in the
Pinelands; it was never a real operational issue (Stokes and Ross 1997). All firmers with
mortgages on their property who have participated in the PDC program received a release from
the lending institution without a problem. The lending institutions contacted the PDC bank for

information. Once it was explained, it was no longer an issue.

Political Leadership

As defined in the enabling legislation, both the Pineland Commission and the PDC bank
have played leadership roles in the in the PDC program. The PDC bank has taken the lead in the
PDC program, acting as ficilitator, educator and program monitor. Because the Pinelands
Commission administers the Pinelands Protection program, its ability to lead in the PDC program

is limited. While the Pinelands Commission has been able to take leadership on the preservation

Chapter 10

324
side of the Pinelands PDC program, it has played a limited leadership role on the development

side. The municipalities are in the best position to lead the development aspect of PDC programs.
It is through municipal master plans and zoning ordinances that base and bonus densities get set.
Furthermore, municipalities are in charge of their infrastructure planning, and this is critical to

viable receiving areas.

Mandatory versus Voluntary

Stokes does not think that in order to be successful it is absolutely critical that the TDR
program be mandatory. When one refers to mandatory, one must look at both sides of the
equation - sending area and receiving area. Stokes believes that mandating makes it easier but

may not be absolutely critical.

The Pinelands program is mandatory on the sending side and voluntary on the receiving
side. Properties were effectively downzoned within the preservation and agricultural areas.
Development options were therefore limited. Landowners have a choice; they can either deve10p
the property according to the zoning ordinance or they can have and sell these rights. In receiving
areas, the program is essentially voluntary, because TDR bonuses are typically higher than the
normal (base density) development intensity was in 1980. Developers have a choice; they do not
have to participate in the TDR program and can develop at a normal density or participate and
develop at the bonus density. Even when the receiving side is voluntary, i.e. truly a bonus, there
will still be developers who say, “Why make me pay for them? Why not just give them to me?”
Stokes believes that the majority of developers in the Pinelands do view the Pinelands PDC

program as a bonus.

On the receiving side the base densities were set at levels which roughly approximated

the type and intensity of development that had been occurring in the region. Only when there is

Chapter 10

 

325
an interest in providing for a more dense development will TDRs be used. TDRs were not to be

the rule, more the exception. This was a conscious decision, made to minimize opposition. If the
program made TDRs mandatory by lowering the densities in the receiving areas and the TDR
program did not work, then the areas would be developed at a lower density. The housing
demand would not be accommodated and would result in greater development pressure back in

the conservation areas.

TDR Bank

The Pinelands Credit Bank is an independent state agency established to help the
Pinelands Commission implement the Pinelands Credit Program. While the Pinelands
Commission created the Pinelands Development Credit Program, the Pinelands Credit Bank acts
as a ficilitator of the program.

Beyond functioning as a ficilitator, the PDC bank has a number of roles. The PDC bank
purchases TDRs, provides information on zoning requirements, maintains all PDC transfer and
potential transfer information, maintains a listing of people interested in buying PDCs, a list of
potential sellers, a registry of people who have severed PDCs and received PDC certificates and a
listing of all PDC sales and prices. The PDC bank issues PDC certificates, redeems PDCs and

maintains all information regarding ownership of PDC certificates.

PDR/T DR Linkages

There has been relatively little activity of the conservation easement program within the
Pinelands. Generally that is because, while the state provides the funding and has the ultimate
say, the counties must apply to the state for finding to acquire development rights. Many of the
counties have targeted their efforts outside the Pinelands for three reasons. First, the area outside
the Pinelands is where the firms are under greater threat. Second, the counties take into account

that in the Pinelands they have the TDR program. And third, some counties view easements in

Chapter 10

 

326
the Pinelands as worthless because they are not extinguishing development rights. They did not

know if they could legally buy the TDRs and resell them. Consequently the counties concentrated
on areas outside the Pinelands for the farmland preservation program. Currently there has been

some discussion on preserving lands within the Pinelands using the firmland preservation

program.

In addition to the firmland preservation program there is the DEP land acquisition
program. This is not a PDR program. Although it is a fee simple acquisition, at times easements
have been purchased. That program works in tandem with the TDR program. This is
exemplified by the dual role of Jack Ross, who is director of the PDC Bank and administrator of

the DEP fee acquisition program.

Simple and Cost-Efficient

The Pinelands program is one of the most complex TDR programs in existence. It is
inherently complex due to its regulatory origins, its inclusion of multiple jurisdictions, its
preservation goals, the allocation method and the concept of credits and rights. Regulatory
authority for the PDC program is found in all levels of government. At the local level PDC is
related to planning and zoning. At the state level it is related to the Pinelands Protection Act. At
the federal level PDC is related to the formation of the reserve. The fifty-three municipalities and
seven counties contained in part in the Pinelands add complexity and administrative challenges to
the PDC program. While the overall goal is the preservation of the Pinelands’ ecological
resources, a number of resources are included: agricultural lands, special agricultural production
areas, wetlands, and preservation area lands with their rivers, forests, marshes and bogs. Due to
the number of resources in need of protection, the allocation method is complex. lastly, the
concept of a Pinelands Development Credit, which is equal to four development rights, has added

a layer of complexity in TDR calculations.

Chapter 10

327

The Pinelands’ lack of simplicity is the major reason cited for the activity levels in this
nearly twenty year-old TDR program. Due to the PDC program’s inherent complexity the
program has been slow in establishing itself. The Pinelands Commission and the PDC bank have
been instrumental in reducing the complexity of the PDC program. Through education and
outreach efforts, program complexity has been reduced for both sending-area landowners and
lending institutions. The result has been activity in TDR allocation, severance and therefore land
preservation. Only through education and outreach can program complexity be reduced for
developers and landowners in the receiving areas. At that time, activity in TDR redemption will

be seen and TDRs will result in increased or directed development.

Chapter 10

Chapter 11

TDR Simulation Model

Introduction

A TDR simulation model has been developed to better understand the variables influencing
the land use change, from open space and agricultural lands to residential, and transfer of
development right concepts. Modeling is needed to illustrate the effects of urbanization and the
effectiveness of potential land use policies. Spatially explicit models prove useful in the
examination of the environmental, social, and economic systems that interact and influence land
use change. Such models require information on location and configuration at each landscape unit
of concern (Baker, 1989). Spatial models offer an advantage in allowing researchers to address
questions at large scales without conducting landscape-level experiments (Baker, 1989) and to
study potential effects associated with proposed policy options through scenario analysis (Bingham

et al, 1995).

The model presented in this chapter differs from traditional approaches to modeling land
use change in two ways. First, it addresses the anthropogenic causes of land use change in addition
to natural environmental causes of change. The model accomplishes this by integrating fictors that
represent planning policy, transfer of development rights policy, residential real-estate
considerations, population, and the natural and manmade environment. In the model, all variables

that affect change to residential land use were converted using a relative ranking system where

328

329

small values reflect a greater influence on the direction of change and large values reflect little or

no influence on change.

Second, the model attempts to characterize the spatial interactions inherent in the land use
change process using the analytical tools in geographic information systems (GIS). Empirical
studies of land use change have found that several different types of spatial interactions affect
change in land use. The most important are: l) the distance of a parcel from major features in a
landscape, e.g.a road or employment center (Boume, 1967; Lowry, 1964); 2) neighborhood effects,
e.g. economics and population trends (Alig and Healy, 1987; Turner, 1989; Wilder, 1985); 3) land
unit size and its influence on land productivity (Wilder, 1985); and 4) location-specific
characteristics, such as physical conditions and ownership that influence the type of land use at any
given site (Pijanowski, et al., 1996, McHarg, 1969). Geographic information systems provide a
tool for efficiently and effectively examining these types of spatial interactions. Because of the
advantages of GIS in handling large data sets and spatial mapping capabilities, the development of
a land use change model is most appropriate in this programming environment. Using IDRISI, the
model was developed to examine the interaction of residential land use change-driving variables

and explore TDR policy scenarios.

This chapter presents the model in three sections: the Conceptual Model; Model
Application, including the study area and scenario description, model program documentation with
model computations and model findings; and Areas for Further Model Development. Currently,
the model has been developed to test the component relationships over a twenty-year time frame at

a township level.

Chapter 11

330

Conceptual Overview

 
 

TDR Policy
Submodel

 
   
 

 

Availability
1
Potential "dex Desirability

Development Index

     
 

 

 

 

  
  
    

 

   
 
  

   
   

 

 

 

 

  
 

 

   

 

Allocation Supply
Submodel Land cells and Demand Fromm.
Land Index "Y
Index

     

 

  

 

 

 

Population
Submodel

  
 

  
 

Developable Land
Submodel

 
   
 

Figure 11-1:Conceptual Model

The model contains four submodels: population, allocation, developable land and TDR
policy. The Developable Land Submodel has five components that represent the driving variables

of land supply and demand, and land availability.

The Developable Land Submodel contains indices that represent residential development
factors and constraints. The desirability and availability indices were developing using concepts
presented in Koches and Toering (1995). The Desirability Inda represents the demand side of the
model and incorporates the driving factors of residential land use change from a buyer’s
perspective. The Profitability Index represents the supply side of the model and incorporates the
driving factors of residential land use change from a developer’s perspective. The Supply/Demand
Land Index combines the Desirability and Profitability indices to represent the overlap between
buyer and seller interests in residential land use change. It provides a mechanism for contending

with any discontinuities between buyer and seller interests. Traditionally land use models have
Chapter 11

 

331 1

only examined the “Desirability” side, the buyer’s side, and simply based land use decisions on
buyer demand. However, the residential land market depends on both demand and supply. For this
reason, current modeling efforts have begun to focus on the developer’s influence, the supply side.
In the model both forces in the residential market are considered, reflecting the real world market
process. The Availability Index represents the constraints in the residential land use change
process. Only certain parcels of land are actually available for consideration for residential land
use change. This model constraint eliminates land areas that are not available for development due
to the current land coverage being unbuildable, as is water; or too developed, as with high-density
urban use; or unavailable due to public ownership. Potential Developable Land Cells are defined
through the interaction between the Availability Index and the Supply/Demand Land Index. While
all sites have a value in the Supply/Demand Land Index, some sites are eliminated fi'om further

consideration by “overlaying” the Availability Index.

The Population Submodel includes two components: a growth-history component and a
growth-policy component, that indicates the township’s growth perspective, i.e. pro-development or
no-growth perspectives. The growth history is based on township census data for 1980 and 1990
and growth projections for 2000, 2010 and 2020. It was important to include two growth periods,
to 2010 and to 2020, to address the TDR policy characteristic that the program should be
monitored over time. By including two time periods the model can be used to test programmatic

changes based on program evaluations.

The Allocation Submodel represents the process of residential land use allocation. It
combines the Developable Land Submodel with Population Submodel. Using similar principles to
the CUF model (Landis 1995), the primary function of the Allocation Submodel is to “clear the

market,” to match the highest potential developable sites to the supply of developable sites. The
Chapter 11

332
projected population for 2010 and current density pattenls were used to identify the areas to be

developed for residential use. The projected 2020 population was used in the same way to
determine where the ‘next wave’ of residential development would occur. These areas were also

used to identify the potential receiving areas for TDR programming.

The T DR Policy Submodel incorporates TDR program characteristics into the model.
The findings in the explanatory case studies were used to develop decision rules for this submodel.
For example, receiving areas were determined based on the characteristics of viable receiving areas
identified in the explanatory case studies, including existence of sewer and water. In effect, the
allocation submodel is used to identify receiving areas. The sending areas are identified by
examining zoning, soils and land use. Additionally, cells identified as receiving areas are excluded
from being sending areas. This decision rule is based on a exploratory and explanatory case-study
finding. TDR programs that allowed sending areas to be receiving areas experienced

complications and introduced unneeded complexity.

Model Application

Study Area Description

Alpine Township in Kent County is the study area for the model. Located in western
Michigan, this township is adjacent to Grand Rapids on the north side. The area was selected due
to the increasing pressures for development and the existence of forested and agricultural land,
including valuable orchards. The fruit and orchard industry is important to Kent County and in
particular to Alpine Township. The township is in an area known as ‘the ridge’ which stretches
into Ottawa County and accounts for forty percent of the apples in the State of Michigan. The

township has strict agricultural zoning and is dedicated to the preservation of its agricultural lands.

Chapter 11

333
Currently the township is investigating additional policy alternatives for agricultural preservation,

not to replace its agricultural zoning but to supplement it and offer farmers additional options. For
these reasons, and due to the availability of data sets and expertise, this region has been selected as
the model study area. The model fi'amework permits data from other townships to be utilized, or
for the study are to be expanded to include multiple jurisdictions to examine TDR concepts on a

regional basis.

Scenario Description

The scenario examined represents the status quo, the way current land use change
decisions are made. This scenario assumes that the development process will continue to be guided
entirely by the preferences of the private marketplace, subject to existing, locally based growth
policies (Landis, 1995). This scenario is used as a baseline for the TDR policy investigation.
During this investigation, allocation of p0pulation is further constrained by defining acceptable
densities in both receiving and sending areas. Eight differing TDR scenarios for the preservation
of agricultural land are examined using the model. (See Table 11-1) The combinations of four
sending options and two receiving options yields eight possible scenarios. Sending Area Option 1
uses only prime farmland as the criterion for sending area designation. Sending Area Option 2
uses prime, and prime-if-drained, firmland. Sending Area Option 3 uses prime farmland and
orchards. Sending Area Option 4 uses prime firmland or orchards. Receiving Area Option 1 is
primarily based on Alpine Township’s drafted 1998 master plan modified to permit higher
densities in the rural agricultural (RA) areas. Under the drafted Master Plan the density in RA
zones is one dwelling unit per 1.5 acres. Under Receiving Area Option 1 the allowable density is
changed to one dwelling unit per acre. Receiving Area Option 2 is based strictly on the master

plan, with maximum allowable densities following those outlined in the proposed master plan.

Chapter 11

334
Table 11-1: Model Scenarios

 

 

 

 

 

 

Receiving Area Option 1: Receiving Area Option 2:
Alpine Township’s drafted 1998 Alpine Township’s drafted 1998
Master plan with the change Master plan

Sending Area Option 1:

Prime Farmland TDR Scenario 1 TDR Scenario 2

Sending Area Option 2: Prime

Farmland and Prime if drained TDR Scenario 3 TDR Scenario 4
Sending Area Option 3:

Prime AND Orchards TDR Scenario 5 TDR Scenario 6
Sending Area Option 4:

Prime OR Orchards TDR Scenario 7 TDR Scenario 8

 

 

 

 

Model Program Documentation

Analytic Framework of the Model

A landscape is characterized in the model as a grid of cells. The grid-cell size is 2.5 acres,
with the model study area being represented by 97 columns and 100 rows of cells. Each cell is
assigned a value based on a land use category or a value relating to the influence of a specific
driving variable. The driving variables include population, environmental variables including
distance to roads, highways, water bodies, forests, and other residential areas, existence of sewer
and water, and planning costs. These driving variables were identified through a literature review
(Pijanowski 1996; Koches and Toering 1995). Each cell then has factors, which represent the
driving variables, and constraints, which represent the land use category or land ownership directly
assigned. Thirteen land use categories are assigned to each cell in the model study area, with
agriculture, forest, non-forested, and low-density residential being those categories available for
change into residential. An assumption is made that forest and non-forested areas are under the
same development pressures that affect agricultural land. Low-density residential is included ill
order to simulate the effects of land use change that involve increasing current densities. Other
urban uses are considered not available based on the assumption that downzoning (e. g land

converted to a less intensive use) is not possible.

Chapter 11

335

Three types of spatial calculations are contained in the model: neighborhood, location-
specific, and distance calculations. Neighborhood calculations consider the influence of
surrounding cells on a specific cell, i.e. the likelihood that a cell at location (x,y) may convert to
residential use given its neighboring cell characteristics. Location-specific calculations consider
the influence of site characteristics, such as slope, on residential land use change. Distance
calculations consider the effect of proximity to certain landscape features, such as roads and water

bodies.

A Cartographic Model - Steps in Model Calculations

A cartographic model presents an organized layout of model steps and procedures. It
starts with the desired output map and works its way back to needed data for the model fictors and
constraints. (See Figure 11-2) Five different types of computations are made in the model: data
processing, factor calculations, integration, land use allocation and sending/receiving area
identification. All five types are represented in the cartographic model. What follows is a
description of the cartographic model, the computations that are made and the results of such data

manipulation and calculations.

Data processing in model development began with convertion of the Michigan Resource
Inventory System (MIRIS) data layers. The MIRIS layers needed to be formatted for use in
IDRISI, the geographic information system (GIS) system used for programming the model. IDRISI
is a raster-based microcomputer GIS developed at Clark University that allows vector layer input.
IDRISI allows simulation modeling through its extensive analytic firnctions. The data was
obtained by either converting MIRIS layers in C-MAP, a GIS system developed at MSU, or fi'om

the Water Resources Institute at Grand Valley State University.
Chapter 11

 

 

337
Data used as input into the model included land use and land features, including: water bodies,

roads, highways, forests, existing residential areas, sewers and water. These spatial data layers are

known as coverages and must be created before any factor calculations can be made.

Two types of coverages are needed in the model: coverages for factors and coverages for
constraints. Factors of residential land use change are criteria that enhance or detract from the
suitability of an area for residential development. For example, steeper slopes are more costly to
develop, thus sites with minimal slope would be more suitable from a developer’s point of view. In
mathematical programming, factors are known as decision variables. Constraints limit the
alternatives under consideration. In the model, elimination of highly urbanized areas from the
Availability Index is a constraint. This is based on the assumption that highly urbanized, such as
highways, commercial and industrial areas cannot be further developed for residential land use. In
the current version of the model, all constraints are expressed in the form of a Boolean map. Areas
excluded fi'om consideration are coded with a zero and those open to further consideration are

coded with a one.

Factor calculations required decision rules. The procedure by which fictors and criteria
are combined in order to perform an evaluation is known as a decision rule. Decision rules were
used in the model to define the procedures for combining criteria into individual composite indices,
namely: the Desirability Index, Profitability Index, Supply/Demand Land Index, and Availability
Index. These decision rules were based on the explanatory case-study findings, e. g. viable

receiving areas require the presence of sewer and water service.

For the Desirability Index, seven fictors were relevant to the siting of residential

development from a buyer’s point of view: proximity to county and residential roads, proximity to
Chapter 11

 

338

other residential development, proximity to rivers and streams, proximity to lakes, degree of slope,
proximity to forest cover, and proximity to highways. Additionally, three constraints were
considered: availability of municipal water, availability of sewer service, and soil suitability for

septic system.

For the Profitability Index, four factors were identified for siting of residential
development from a seller’s point of view: site improvement cost, proximity to highway, service
extension cost, and planning procedure cost. Site improvement cost has been operationally defined
using proximity to county and residential roads, while service extension cost is derived from
proximity to sewers. The current version of the model uses a random filnction (RANDOM) in
IDRISI to assign fifteen random planning costs to all cells in the study area. Empirical data must

be collected in order to represent planning cost more realistically in further model development.

The model uses classification decision rules to determine a cell’s desirability and
profitability. For each, the actual process of applying the decision rule involved multi-critelia
evaluation using weighted linear combination. In this process, each fictor is multiplied by a weight
and then summed to arrive at a final suitability index. This procedure is effectively and efliciently
managed using the MCE function in IDRISI. The weights are determined using pairwise
comparisons between all factors under consideration. (See Table 11-2 and 11-3) This procedure
parallels the approach used in the Koches and Toering study (1995). Using a Delphi technique,
utilizing expert planner opinion, each of the four factors of profitability is compared to each of the
other factors, and it is determined which is more or less important. Working in cooperation, a
group of experts came to agreement on the relative importance of the factors considered and
submitted those values to a pairwise comparison matrix. For example, the 7 x 7 matrix for

desirability assigned relative values ranging from 1/7 (in which the column factor is far more
Chapter 11

 

339
important than the row factor) to 7 (in which the column factor is far less important than the row

fictor).

Table 11-2: Pairwise Matrix for Desirability

2

to /res roads
to Res. Areas 1
to Rivers and Streams 1/3 1

to Lakes 1/3 3 1
1/7 1/5 1/5

to Forests 1/5 1/5 1/3

to Hi 3 5 5

 

Table 11-3: Pairwise Matrix for Profitability

to Hi

to /res. roads
to Sewers
Cost

 

The matrix values are then input into an ASCII file and used in IDRISI’s WEIGHT
routine to determine the relative weights of all factors. This routine calculates a consistency ratio
for the entered matrix values, and indicates whether the consistency is acceptable or if the matrix
values need to be re-evaluated. (See Table 11-4 and 11-5) Using this technique the following

weights were determined:

Chapter 11

 

340
Table 11-4: Desirability Factor Weights

.2191 Distance to county and residential roads
.1643 Distance to other residential areas
.0814 Distance to rivers and streams

.1014 Distance to lakes

.0251 Degree of slope

.0378 Distance to forested areas

.3709 Distance to highways

1.000 Total

Table 11-5: Profitability Factor Weights

.5650 Distance to highways

.1175 Distance to county and residential roads
.2622 Distance to sewers

.0553 Random Planning Cost

1.000 Total

In effect, the MCE (Multi Criteria Evaluation) function performs both fictor calculations
and integration calculations. Due to the absence of constraints in determining profitability, once
the MCE routine was performed, the Profitability Index was created. In determining desirability,
three constraints had to be incorporated, using the OVERLAY function in IDRISI, to yield the

final Desirability Index.

Land use factor calculations began with the MIRIS land use layer. This data layer, like all
MIRIS layers, is a vector file. While IDRISI handles both vector and raster data, the MIRIS
layers needed to be converted into raster coverages in order to perform the routines outlined in the
cartographic model. The vector layers were converted into raster coverages using the POLYRAS

routine.

Chapter 1 l

 

341

 

Figure 11-3: Vector Land Use File for Alpine

To derive the Availability Index, a 1996 land use coverage was created using ArcView
files acquired from GVSU WRI. The resultant image was reclassed to create a Boolean map. The
only land use classes considered available for residential development in the model, and thus coded
1, were low density residential, agriculture, forest, and non-forested. All other land use classes
were considered unavailable and were thus coded 0, using RECLASS in IDRISI. Different
scenarios could be examined by creating other Boolean maps, or by assigning probabilities to
varying land use classes. These probabilities could represent the likelihood that a particular cell

will change to residential development given its current land use and surrounding land uses.

Chapter 11

 

Feat
evil “as! —=—_
1 0.89181

Figure 11-4: Raster Land Use Flle for Alplne

Data integration began after the indices were created. After the Availability, Desirability,
and Profitability Indices were created, they were integrated using OVERLAY addition and
rmrltiply, yielding the Developable Land Cell Values amp. The Desirability and Profitability
indices were simply added yielding a Supply & Demand Land Index, which contained values
between fifteen and 373, where low values represent most desirable and profitable, and high values
indicate least desirable and least profitable. The Supply & Demand Land Index was then
combined with the Availability Index, using OVERLAY multiply, so that unavailable cells, coded
zero, would result in a zero value no unmet how desirable or profitable the cell. The resultant
image, the Developable Land Cell Values, represents the study area with cell values indicating
which cells are most likely to develop. Given our assumption of “clear the market,” these cells

have the lowest values, excluding Os.

Chapter 11

 

343

Residential Land Use allocation was determined by incorporating population data. The
future population value was determined by analyzing census data and the township’s master plan
which indicated the township’s growth perspective. The projected populations for 2010 and 2020
were divided by the current average residential density (5.25 persons per acre) to determine how
many acres will be needed to accommodate the fixture population. This number is then divided by
2.5, for acres covered by each study area grid cell, to determine how many cells must be changed
to residential development. A selection decision rule was then used to allocate the population to
appropriate developable land cells. A choice heuristic was used to identify cells for future
residential development by rank-ordering the cells in the Developable Land Cell Values map and
taking enough of the highest ranked cells, excluding Os, to first accommodate the 2010 anticipated
additional population. The additional population projected for 2020 was allocated to cells in the
same manner. A finding from the explanatory case study was that TDR programs need to be
monitored, evaluated and altered to address market needs. By including two time periods for
residential allocation, flexibility is built into the model. Changes in identifying receiving areas can

be simulated and evaluated.

The TDR policy simulation began with the identification of sending and receiving areas.
The receiving areas were identified using the results of the residential land use allocation. Given
that these were the cells that were most likely to be developed, and the case-study finding that
receiving areas must include viable residential markets, the decision was made to use the results of
the Allocation Submodel to determine the receiving areas. The sending areas were determined by
integrating zoning, soils and land use data. The data was reclassed to indicate the location of
agricultural areas, prime, prime-if-drained soils, and orchards. Using the OVERLAY function

these data layers were combined to yield potential sending areas. The case-study analysis indicated

Chapter 11

 

344
that TDR programs that permitted the transfer of rights from sending areas into sending areas were

less successful in their preservation efforts. A decision rule was defined that any potential

receiving area identified as a sending area could not be included in the final receiving-area options.

Four sending-area options were considered. Sending-Area Option 1 included areas in
agricultural zoning that had prime farmland soils. Sending-Area Option 2 included areas in
agricultural zoning that had prime or prime if drained farmland soils. Sending-Area Option 3
included areas in agricultural zoning that had prime farmland soils and orchards. Sending-Area

Option 4 included areas in agricultural zoning that had prime farmland soils or orchards.

While the Allocation Submodel identified the location of the receiving areas, a method was
needed to determine the TDR receiving capacity. While early TDR programs determined the
number of TDR receiving opportunities based on the number of TDRs generated in the receiving
area, these programs were less successful in transferring rights. TDR programs that first
determined the number of receiving opportunities and then allocated TDRs in the sending area
based on this calculation were more successful in actualizing transfers. For the simulation model,
receiving opportunities were based on densities defined in the Alpine Township 1998 drafi master
plan. (See Table 11-6) Because Alpine Township uses sliding-scale zoning in the agricultural
zone, the simulation model included an analysis of the New Residential Development Cells in
Agricultural Zoning. In this analysis the IDRISI GROUP fimction was used to group residential-
development cells for both 2010 and 2020. After the cells were grouped in blocks, the block size
was analyzed to determine what density it could achieve under the sliding-scale zoning. Given that
2.5 acres are in each cell, a block of four cells would cover ten acres and would therefore qualify

for one additional split. A group of eight cells would thus qualify for two additional splits, etc.

Chapter 1 l

 

345
Table 11-6: Densities per Zone

Agriculture
<10 acres No splits
10-20 acres 1 split
2040 acres 2 splits
40-80 acres 3 splits
>80 acres 4 splits
Rural Agriculture (RA) 1 d.u./1.5 acres
Low Density Residential 3.25 d.u./acre
High Density Residential 12.4 d.u./acre

Source: Alpine Township 1998 Draft Master Plan

Given that the model utilized a decision rule that no cell could be a sending and receiving
cell and that four sending options were considered, four potential receiving-area patterns could be
defined. However, when receiving opportunities were calculated based on the four potential
receiving-area patterns; these differences were minimal, and evident only in the agricultural areas,
so the maximum value was used. Two receiving-area options were ultimately considered.
Receiving Area Option 1 utilized Alpine Township’s 1998 draft master plan, in particular its
fiiture land use map and the recommended densities. However, the recommended density for the
Rural Agricultural (RA) zone was altered under Receiving Area Option 1 to permit one dwelling
unit per acres with the use of TDRs; i.e. the bonus density was one d.u./acre while the RA base
density remained as stated in the draft master plan at one dwelling unit per 1.5 acres. (See Table
11-7) Receiving Area Option 2 utilized the drafi master plan and defined the bonus density at one
dwelling unit per 1.5 acres and the redefined the base density at one dwelling unit per two acres.
Under Receiving Area Option 2, even if TDRs are used, the maximum allowable development will
not excwd the 1998 draft master plan levels. The base and bonus densities were defined based on
the explanatory case study findings. (See Table 11-8) Specifically, the base and bonus densities

did not vary enough to change the land use type or the market type.

Chapter 11

 

 

346
Table "-7: Receiving Area Option 1 Base and TDR Bonus Densities

 

 

 

 

Acres Base Density TDR Bonus Density
Rural Agriculture 232.5 1d.u./l.5 acres ld.u.ll acre
Low Density Residential 637.5 2.5 d.u./acre 3.25 d.u./acre
High Density Residential 67.5 10 d.u./acre 12.4 d.u./acre

 

 

 

 

 

 

Table 11-8: Receiving Area Option 2 Base and TDR Bonus Densities

 

 

 

 

Acres Base Density TDR Bonus Density
Rural Agriculture 232.5 ld.u.l2 acres ld.u./1.5 acres
Low Density Residential 637.5 2.5 d.u./acre 3.25 d.u./acre
High Density Residential 67.5 10 d.u./acre 12.4 d.u./acre

 

 

 

 

 

 

The number of dwelling units allowed by right (base density) and allowed through TDR
activity (bonus density) are calculated using the acreage, base and bonus densities. The difference
between these two calculations represents the number of TDRs that need to be allocated under each
of the Sending-Area Options. Under Receiving-Area Option 1, the total number of TDR receiving
opportunities was 717.5. Under Receiving-Area Option 2, the total number of TDR receiving
opportunities was 679. Using these figures, the number of TDRs needed in the sending area is
calculated. The findings of the exploratory cases studies suggested a receiving-to-sending ratio of
two to one to create a demand for the TDRs. The explanatory case study findings indicated that
this ratio was difficult to achieve. By examining three different ratios under each of the TDR
scenarios, TDR sending area allocation rates were defined. (See Table 11-9) These values should
be rounded off to the nearest whole value to avoid the complications experienced in the New Jersey

Pinelands.

Chapter 11

 

 

347
Table 11-9: TDR Allocation Rates

 

TDR/acres
1/20.3
1/21.4
1/28.9
1/30.5

l/7.8

1/8.3

1/28
l/29.6

2:1 Ratio

l/Receivin

Nt—INt—tNr—Nt—

1/10.2
1/10.7
1/14.4
1/15.3
l/3.9
l/4.l
1/14
l/l4.8

Sendin
Sendin

Nt—Ni—Ni—Nr—

1/15.2
1/16.1
1/21.7
1/22.9
1/5.9
l/6.2
1/21
l/22.2

1.5:1 Ratio

 

 

NF-‘Nt—Nh—Nu—

Model Findings

The model was run using a twenty-year time period. The resultant map locates new
residential development. It is not surprising that this occurs around current urban areas. (See
Figure 1 1-5) The current model results support early efforts in urban regional modeling, many of
which simply used distance to highways as the driving variable of land use change. The results
appear to be reasonable, and prompt questions of inquiry, like why do a few scattered new
residential developments exist in outlying areas. An examination of this outlying area may prove

usefiil in redefining model component relationships.

Chapter 1 l

348
New Residential Development

 

 

 

 

 

 

 

 

 

 

l' s
I .I
H—fi
- I
l -
-' I
I r. I '
I
I .
. .-
ul' 1 .
I i I
. I . I
Feet
-
10.70537 - New Fles. for 201 0

I New Hes. for 2020

W®uuu :1 Other

Figure 11$: New Residential Development

The results of the model are not intended to “predict” new residential development areas.
Rather, the intention is to use the model to compare policy scenarios in a relative manner. For
example, the current model results could be compared to a scenario where sewer and water lines
are extended beyond current model parameters. All other variables being equal, what do the results

of both these runs indicate? Therein lies the value of the model; it allows planners and citizens to

visualize the results of policy restrictions, all else being equal.

Chapter 11

349
Only agriculture, non-forested and forest were considered available for residential

development. Infill development was not considered. Infill development refers to development that
occurs in currently undenitilized areas, i.e. areas where urban density has not been maximized. A
cross-tabulation analysis was performed, indicating the number of cells which changed from each
specific current land use to new residential land use. (See Table 11-10) To accommodate the
projected 2010 population 521 cells (1302.5 acres) were converted to residential use. Agriculture
to residential contributed twenty-five percent, while orchards accounted for 10.5%. The number of
non-forested cells converted was 167 and the number of forested cells converted was 170 cells,
each accounting for approximately thirty-two percent. To serve the additional 2020 population,
402 additional cells (1005 acres) were urbanized. Agricultural lands represented thirty-six percent,
and orchards represented twenty percent. Non-forested cells (126) accounted for thirty-one
percent. During this second time period forested lands only accounted for thirteen percent of lands
converted to residential use. Given that one of the driving variables was distance to forest, it is not
surprising that during the first-time period the conversion of forested lands dominated the
simulation run. The decline in the number of forested cells converted in time-period two may be
attributed to the diminishing forests and their location. The increase in agricultural lands, and
particularly orchard, from the 2010 to 2020 time periods should be noted. Currently Alpine
Township considers its agricultural resources protected from the threat of development. The model

simulation runs indicate that rate of agricultural land loss may increase with time.

Table 11-10: Cross-Tabulation Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Agri % Orchard % Non- % Forest % Total
forested
Period 1 129 24.7 55 10.5 167 32 170 32.6 521
Period 2 143 35.6 82 20.4 126 31.3 51 12.7 402
272 29.5 137 14.8 293 31.7 221 23.9 923

 

Chapter 1 l

 

 

350

Under the four sending-area options, the acreage within the sending area is as follows. (See
Figure 11-6) Under option 1, prime farmland in agricultural zoning, i.e., 7,285 acres, would be
included in the sending area. Under option 2, prime and prime-if-drained farmland in agricultural
zoning, i.e., 10,357 .5 acres, would be included. Under option 3, where land that is prime farmland
and in orchard use in agricultural zoning, i.e., 2812.5 acres, would be in the sending area. Under
option 4, where land that is prime farmland or in orchard use in agricultural zoning, i.e., 10,060,

acres would be included in the sending area.

The TDR allocation rates are either close to the current agricultural zoning or higher. (See
Table “-9) With a TDR program designed to provide a two to one receiving-to-sending ratio,
under receiving-area option 1, 358.75 rights need to be allocated in the sending area and under
option 2, 339.5 rights need be allocated. Under this ratio, the amount of acreage needed for a
development right is highest across options. However, even though the highest, with the majority
of allocation rates between one right per twenty acres to one right per thirty acres, this represents a
slight downzoning from the current densities permitted. With a TDR program designed to provide a
one to one receiving-to-sending ratio, under receiving area option 1, 717.5 rights need to be
allocated in the sending area and under option 2, 679 rights need be allocated. Under this ratio, the
amount of acreage needed for a development right is lowest. When rights are allocated to just
prime farmland in agricultural zoning, the allocation rate is similar to the current zoning, one right
per ten acres. When only prime farmland that is under orchard production is included in the
sending area, the allocation rates are below current rates, with one TDR for every four acres. This
allocation rates provide an incentive for sending area landowners. Agricultural property owners are
allocated more TDRs than the number of splits they are allowed under the sliding-scale zoning.

Additionally, by keeping these allocation rates at least in line with current zoning, the TDR concept

Chapter 11

 

Sending Area Option 1

    

 

 

 

Fed
m
10,690 32 - 10.550 32 -
- Pun-e c4 Agri Zone - Pint/Pm i darted or A9: Zor-
® E] Sendng Area: CD Sancho Areas
God it.“ 9‘ . tee.

Sending Area Option 4

 

   

W
10,690 a: I 10,593 32 -
pom: ct Orchid n A01 3:": F‘Tne 3' O'C’Wd 0‘ ‘9" 3°09

01(Du“. C3 Swan; we.» G"(.Ia]w. [3 _._~n.jn; Area:

Figure "-6: Sending Area Options
Chapter 11

 

352
has a greater chance of being accepted by the agricultural community. Opportunities are not being

taken; rather, alternatives are being offered.

By examining the receiving-area options and the number of TDR opportunities created
under two zoning schemes, it is evident that modest changes in zoning may result in TDR use.
Using the Alpine Township 1998 draft master densities as the maximum allowable densities, the
base densities were set slightly lower. While densities could be lowered further, this would result
in greater opposition to the TDR concept and would also result in changes in what housing market
was being addressed. Additionally, it appears that an ample number of rights were generated by

only slight density changes.

Further Research

Several areas have been previously identified for fiirther research. With regard to model
validation, further research needs to be conducted on spatial statistics to determine which may be
most appropriate for land use change models. Additional scenarios must be defined and
programmed in order to utilize the model in its intended capacity. Assumptions were made in
identifying the profitability factors and constraints. These assumptions must be tested and
modified to reflect developer behavior more realistically. Limited neighborhood calculations were
utilized in this model. GIS offers a distinct advantage in calculating neighborhood effects and
therefore the next generation of the model must capitalize on this system advantage. Rather than
availability being binary, it could be defined using probabilities based on neighborhood relations.
Currently the model uses a random fiinction to assign planning costs to all cells in the study area.
Empirical data need to be collected in order to represent planning cost more realistically in fiirther

model development. Probabilities could be assigned to varying land use classes based on the

Chapter 11

 

 

353
likelihood that a particular land use type will change to residential development rather than using a

Boolean map in the Availability Index. This probability could be based not only on land use type

but surrounding land uses.

Chapter Summary

Because Alpine Township has strong agricultural zoning and is committed to farmland and
orchard preservation, it is an ideal candidate for TDR programming. The township’s proximity to
Grand Rapids and Plainfield Township, both fast-growing communities, implies that it is under
development pressure. Currently developers are not submitting plans in Alpine as readily as
adjacent communities because there are altematives outside of Alpine. Population projections
indicate that a time will come when developers will have to contend with Alpine Township, its
commitment to agriculture and its master plan. By initiating a voluntary TDR program,
development rights can be offered to agricultural and/or orchard landowners as an alternative. Tire
allocation rates indicate that a surplus of TDRs can be achieved without any rezoning. This is due

in part to the low-density development now permitted under sliding scale zoning.

As a prototype residential land use change model, the model represents a first step toward
the integration of social, economic, political, and environmental factors and criteria affecting land
use change in a spatially explicit manner. While GIS-based modeling offers an opportunity to
explore landscape change components and processes, this powerfiil tool should be used to
encourage and identify areas for fiirther research and inquiry. Defining, prograrruning and utilizing
the model, its factors, criteria and assumptions highlighted the need and difficulties associated with
investigating the black box of land use change. Moreover, the discovery of the degree of land use

change complexity and its omnipresent effects on human and environmental systems reiterates the

Chapter 1 l

 

 

 

354
nwd for firrther knowledge and understanding in order to maintain and sustain the social,

economic, political and environmental systems on which we rely.

Chapter 1 l

 

Chapter 12

Conclusions

The Research Study

The research study has focused on the broad landscape issue of urban and exurban
sprawl. We know that land use issues are prominent in communities across the US. These issues
include loss of agricultural, forest and open space lands, declining urban centers, destruction of
environmental resources including habitat loss, loss of wetlands, stormwater management,
affordable housing, infrastructure provisions and cost of services. These issues are directly or
indirectly related to the predominant low-density pattern of development known as sprawl. The
environmental, economic and social impacts of sprawl are also evident. The implications of this
increased urbanized area include loss of productive farmland and open space, water-quality
concerns due to increase in impervious surface, abandonment of existing communities and
additional infrastructure costs. The implications go beyond physical manifestations; there are
social consequences as well. The dominant low-density growth pattern excludes lower socio-
economic groups from the suburbs; the poor are lefi behind in declining urban centers. Federal,
state and local policies have influenced the exacerbation or reduction of sprawl. This study has
focused on a policy that is best implemented at the local, county or regional level. Because
sprawl has existed since World War II and continues today, it is evident that land use and
landscape management techniques designed to address sprawl have had limited success.
Generally the growth management techniques that emerged in the early 19705 during the
environmental movement have been ineffective in halting sprawl. As we approach nearly a half-

century of uncontrolled development with the land resource diminishing and the permanent

355

 

 

356
alteration of landscapes, the search for additional growth management techniques is becoming

paramount. This study was undertaken to take a closer look at one such altemative, transfer of
development rights. This technique is perceived as complex and has seen limited use. The
purpose of this research study was to reduce the complexity and to provide insight into TDR
concepts and program characteristics. Armed with this information, communities can make an
educated decision on whether a TDR policy or elements of TDR programming are applicable and
appropriate in their community as a method of contending with growth, development and

landscape preservation.

Research Findings

This research study was composed of three parts: an exploratory case study, a multiple
comparative explanatory case study and the development of a TDR simulation model. The
findings from each study part were carried through to the subsequent study part. What follows is

a summary of the findings in each study part.

Exploratory Case Study Findings

Through the exploratory case study analysis a number of findings have been made.
While some findings were unique to the program explored, most were supported across cases.
These findings have been grouped under six thematic headings: background, participants, sending

side, receiving side, TDR allocation and general.

Background
Four major findings were derived from the exploratory case study under the Background
theme. First the program community must have a strong regard for the resource targeted for

protection. Second, fast-growing communities with diverse housing markets are more

Chapter 12

 

 

 

357
appropriate for the TDR concept than communities under limited growth pressure. Third,

development right transfers will only occur if the program is well conceived and based on a
thorough understanding of the development market and economic variables. Fourth, the policy

context must be supportive and complementary to the TDR program.

The community must have a strong regard for the resource targeted for protection. The
resource community must be well organized and capable of having a presence in the political
arena. The community must encompass not only those who live in the protection area but also in
the growth area; the entire community must value the resource. Only then will the entire program
community have a sense of place that includes both the preservation and growth areas. In order

for the sending and receiving sides to work together a sense of place must be fostered.

Most appropriate for TDR programming is a fast-growing community with a diverse
housing market. TDRs will have limited value in very rural communities that have low land
values and little development pressure. In other communities, if the land price is too high it is
difficult to preserve large parcels. In these areas, TDRs are only a partial solution. TDR appears
to work best in rapidly growing fringe areas where the demand for housing can sustain a TDR

market.

Because TDR program success is dependent on a viable market for TDRs, prior to
program design thorough economic analysis must be done to determine the existing development
market and the variables that determine profitability. Additionally, economic analysis should be
ongoing and in coordination with TDR program monitoring. The TDR program must be flexible

enough to make necessary changes based on market conditions.

Chapter 12

 

 

358
A policy context that supports TDR is critical. Municipalities interested in TDR

programming must be sure their comprehensive plan and its stated goals and objectives includes
the protection of the resource in question. Furthermore, the comprehensive plan, zoning
ordinance and other planning techniques need to permit the TDR program to fiinction. States or
regions with a mandate to contain growth may be best prepared for TDR programming. These
areas that have accepted growth management as a valid activity may be politically and physically
prepared to implement a TDR program. For example, if urban growth areas are in place, a

community has already accepted the idea that certain areas are best suited for development.

A supportive policy context is also important because TDR alone cannot achieve its
preservation goals or direct growth. Rather, TDR must be integrated into a suite of policies.
Three complementary policies are agricultural districting, purchase of development rights (PDR)
and cluster development. Agricultural districts help stabilize land use in the sending area, in part
assuring landowners that scattered development will not occur. A PDR program allows a
community to utilize the development rights concept while targeting areas for preservation.
Unlike TDR, where the market makes the decision on what parcels are preserved, PDR program
administrators decide what parcels to preserve. With PDR, communities can integrate strategies
such as targeting parcels within a certain distance from urban areas, thus creating a ring of
preservation to hasten the spread of infrastructure and development. This would allow TDR to
concentrate its efforts within the ring. There is a negative effect associated with PDR
programming in relationship to TDR. In Chesterfield, PDR actually encouraged development on
adjacent parcels where developers wanted to capitalize on the preserved scenic farmlands.
Conceptually, TDR programming is similar to cluster development. Both are based on the
concept of redistributing density; with cluster development this occurs on a single parcel. Those

areas that have accepted the cluster concept may be prepared to accept the notion of density

Chapter 12

 

359

redistribution across parcels. TDR program designers must be cognizant of both the potential

positive and negative effects of associated policies.

Although the regulatory atmosphere is important, enabling legislation for TDR may not
need to be a precursor to program implementation. A number of programs that have gone
forward have proven to be the catalyst for state legislation, for example Montgomery County,
MD. Absent TDR enabling legislation, legislative authority may be found within police powers
of land use regulation, such as in zoning. Additionally, a statewide land use or growth

management policy may provide the legal basis for implementing TDR programming.

Participants

Three major findings were derived from the exploratory case study under the Participants
theme. First, TDR programs should be initiated by citizens and the community in need of
preservation. Second, TDR requires municipal, county or regional administrative commitment.

Third, a public bank or public fund can serve a number of valuable roles.

A bottom-up approach has proven most effective in implementing a TDR effort.
Furthermore, top down approaches have notoriously failed. Programs that were introduced by
legislators or municipal officials eventually had to face the challenge of acquiring support from
the resource community. The most successfiil TDR programs were originally promoted by the
resource protection community, most ofien the farming community. The TDR concept must be
supported in the political and economic arenas. A citizens’ committee provides a mechanism for
determining if support exists in both arenas. With TDR programming, the public role is
minimized and the private market is the driving force. For this reason a citizens’ committee that
represents private market interests should be intimately involved with TDR program design,

implementation and evaluation.

Chapter 12

 

360

 

Municipal or county commitment to the program or to educating the community is
critical. This commitment may take the form of facilitation. The township can work intimately
with developers, educating them on the TDR program and encouraging their participation. In
many municipal TDR programs the first, and at times the only, transaction involves municipal
commitment. In the early stages of TDR programming it is important to have tangible real-world
examples of TDR use. Another reason why municipal commitment is important is that TDR is a
long-term policy. Municipal commitment is needed to ensure that the TDR policy and supporting
policies, in particular zoning, are maintained over time. If the program is perceived to be short-

terrn, participation will be very difficult to obtain.

A number of first-generation programs failed because they lacked municipal commitment
due to an insufficient staff. Given the TDR concept is typically unfamiliar and complex,
resources, in particular human resources, have to be committed for educational efforts. Initially
there is often resistance to TDR programming from landowners who perceive minimal direct
benefit and fiom landowners in receiving areas who are adverse to bonus densities. This
resistance requires education and information. Selected second and third generation programs

have shifted staff commitment from the municipality to a bank or finding agency.

 

A public fimd or bank can play a number of important roles that lend credibility to the
TDR program including facilitator, catalyst and buyer of last resort. A bank can reduce lender
uncertainty, sustain TDR market activity and assist in setting TDR price. While a number of
programs have a TDR bank, few have the right to sell TDRs, and those that do have not yet
exercised it. The reason cited is that the bank should not compete with farmers in the TDR
market. In Thurston County, there was a deliberate decision to exclude a TDR bank. The County

Board wanted to keep administration costs low and avoid the challenges of acquiring and utilizing
Chapter 12

36 1
public fiinds. While the county was aware of the challenges, they may not have weighed them

against the benefits of a bank. With a bank, sending area landowners know there is a buyer of
last resort and that the municipality, county or region is committed to the program. The creation

and funding of a bank achieves credibility, one of the critical factors in TDR programming.

Sending Side

Four major findings were derived from the exploratory case study under the Sending-Side
theme. First, areas associated with the TDR program primary goal should be targeted as sending
areas. Second, participation by sending area landowners must be appealing. Third, participation
by sending-area landowners must be made easy. Fourth, reasons for participating beyond

economics must be considered.

To locate sending areas, programs must target areas that meet the primary goals.
Although TDR programs have been established to address the complex issues of preservation and
growth, to be successful they must simplify the inherent complexity. To help accomplish this,
programs should initially be based on a single resource. Once a program is understood, accepted,
and successfiil, the preservation of additional resources can be integrated into the program. While
there may be numerous preservation goals, when initiating a TDR program the focus should be on
primary goals. With the challenges associated with TDR programming, simplifying goals and
objectives would be prudent in gaining community acceptance. For example, if agricultural

protection is the goal, a primary goal may be to preserve prime and unique farmland.

Development options should be minimized in the sending area in order to make the TDR
option more appealing. Additionally, development options that promote development in the
sending area are contrary to the preservation objective. For example, allowing splits or transfers

within the preservation district encourages rather than discourages development. Rural estate

Chapter 12

 

 

 

362

developments and higher-density developments in the sending area are counter productive to
preservation goals and weaken the incentive to sell TDRs. Additionally, because TDR represents
an option to sending area landowners, to encourage TDR use it must be easy to transfer TDRs. If

it is difficult or perceived as difficult, sending-area landowners will not utilize the TDR option.

Reasons other than maximizing economic gain for participating in TDR programs must
be considered. The Brandywine Conservancy reported that potential senders were willing to sell
rights for a good return, though perhaps not necessarily the maximum return, out of a sense of
doing the right thing (Brandywine Conservancy 1997 p. 28). Greg Bowen, the TDR program
administrator for Calvert County, reiterated this comment stating that economics was not the
main reason why farmers participated in the program. Support for municipal PDR and TDR
banks, simply because they are publicly financed, suggests there are other than economic reasons

for land preservation and growth management.

Receiving Side

Three major findings were derived from the exploratory case study under the Receiving-
Side theme. First, because the strongest opposition faced by existing TDR programs emanates
from receiving-area issues, identification of appropriate areas and defining appropriate densities
is critical to TDR program success. Second, the elimination of specified receiving areas, while
intended to increase TDR use, has most often resulted in fewer transfers. Third, while TDR use
can be encouraged through a variety of incentives, the transfer of rights depends on creating a

demand for TDRs in the receiving areas.

Across all case studies, the most challenging aspect of TDR program design, and where
most legal issues have arisen, is in locating receiving areas, setting base densities and establishing

incentives for TDR use. Because the major opposition has been with receiving areas, a receiving-

Chapter 12

 

363

area study should be conducted. Key variables to consider are availability or potential
availability of public infrastructure, base densities, and bonus-density increases. Receiving-site
criteria should be well defined, for example receiving areas should be located where public
infrastructure is currently available or soon to be provided. Failing to provide public
infi’astructure, particularly public sewer and water, has two major effects. First, it indicates a lack
of municipal commitment to generating development demand. Second, it stifles developers’
ability to realize increased TDR density bonuses. Many first-generation programs failed because
receiving areas were located in regions where sewer and water did not exist; the TDR bonus
densities could not be realized, given the absence of sewer and water. If densities permitted are
so high that additional units cannot physically be constructed, then TDRs are of little or no value.
The same holds true if the density increase forces a change in product from detached single-
farnily to attached multi-family units, which may be less marketable in the community

(Redman/Johnston 1994).

An additional receiving-site criterion is that the base-to-bonus density increase should be
set within the framework of the comprehensive plans. The receiving-area base density has to be
set so that ‘bonus’ densities can be achieved. This was the problem in Buckingham Township,
where the receiving areas targeted were already at densities high enough to meet market needs.
By making these zones receiving areas, already-high densities were made even higher, therefore
diminishing the incentive to use TDRs. Substantially increasing the maximum allowed density
through TDR use has not proven to be a useful strategy. Bonus densities need not result in a
change in housing type, for example from single to multi-family housing. Differences between a
conventional development and a development using TDRs can be negligible, yet still encourage
TDR use. TDR use need not result in dramatic changes in development. To avoid controversy it
is best to keep the changes subtle. TDR programs that can add density without drastic changes in

visual quality or market value have the best chance for success.

Chapter 12

 

 

 

 

364

The elimination of specified receiving areas has not resulted in a greater likelihood that
transfers will take place. Programs that utilize this strategy avoid potential opposition and the
NIMBYism typically associated with receiving-area designation. While this may avoid initial
controversy it may not avoid the controversy once development rights are transferred, and actual
density bonuses are realized. Additionally, a mixed pattern of preservation and development may

result, leading to greater conflicts between development and preservation uses, particularly when

 

the preservation area is a working farm.

Demand for TDRs must be created through program design based on prevailing market
conditions and trends. This can be achieved either through a bonus, bonus multipliers or other
incentives not related to density. If a TDR program’s success hinges on TDR transfers, then
program designers must focus on mechanisms for encouraging or requiring developers to use
TDRs. Developers must be able to financially benefit from the changes permitted through the
purchase of rights. While most programs allow density increases with TDRs, Thurston County,
recognizing the market strength of large-lot single-family housing, also allows decreases from

base densities with TDRs. Other incentives include expedition of the project in the planning

 

approval process and integration with infrastructure programming. No matter what type of
incentive is used to encourage developers to use TDRs, the program must also make it
administratively easy to actually acquire and utilize the TDRs. If it is difficult, developers will

hesitate to participate.

TDR Allocation
Two major findings were derived from the exploratory case study under the TDR
allocation theme. First, the balance between TDR sending opportunities and TDR receiving

opportunities lies at the heart of whether the program will be successfiil. Second, while there are
Chapter 12

365

numerous methods and variations for TDR allocation, it is best to keep the method as simple as

possible.

There must be a balance between TDRs in demand and TDRs available. The theoretical
literature has suggested a ratio of two to one, receiving to sending opportunities, in order to
achieve this balance. This suggests that importance is placed on realizing of all sending
opportunities, not necessarily on realizing all receiving opportunities. However, a two to one ratio
does not actually create balance, and there may be receiving-area developers who cannot meet
their TDR demand. Additionally, if the demand truly doubles the supply of TDRs, the price may
increase, perhaps beyond a receiving-area threshold, thus pricing itself out of the market. Both
the allocation of TDRs in the sending area and the capacity of TDRs in the receiving areas
determine the price that TDRs will command. That price must be perceived as fair and equitable
to both sides. Without both being satisfied transfers will not occur. Base densities in the sending
area should be less than the number of TDRs generated; otherwise there is no incentive to transfer

TDRs.

While there are a variety of ways of allocating TDRs, the allocation method is best kept
simple. Methods for allocation TDRs include gross acreage, previous zoning, soil suitability,
developable land, and depth to seasonal high water table. If sending area landowners do not
understand the allocation method, it will be more difficult to convince them of the value of the
TDR portion of their property. While program administrators may want to allocate TDRs in a
way that reflects the relative value of the land either for development or based on the preservation
resource value, this adds complexity to the program. For example, land in a wetland may be
allocated fewer TDRs per acre than land that is developable, or productive farmland may be
allocated more TDRs per acre than less productive land. By simply allocating TDRs based on

gross acreage, no matter what the characteristics of the land, program administrators do not have

Chapter 12

 

366
to defend their valuation methods. When deciding what allocation method to use, program

designers must consider what is equitable, understandable, and politically acceptable.

General

The major finding derived from the exploratory case study under the General theme was
that simplicity is critical to TDR programming, especially when introducing and initiating the
TDR program. Even those programs that began with detailed studies and intricate allocation
methods eventually reduced their complexity. Despite the move to simplicity, the detailed studies
and considerations were important, providing program designers with a better understanding of
the elements of TDR program that promote appropriate choices on how to simplify the TDR
program. A major cause of limited or no transfers is that programs are flawed in their design due
to lack of understanding of the TDR concept within the community context. Municipal and
citizen understanding of TDR program components within a community’s context is critical to
program success. Ofien this requires simplifying the complex issues of preservation and growth
management. TDR programs that are designed and implemented based on existing conditions,
thorough study and logical choices, can still fail if they are too complex to be understood. For
this reason, rather than fail before getting started, it is best to keep a TDR program simple, to gain
acceptance and understanding. Once the TDR concept and program are understood the program

can be modified to reintroduce the inherent complexity of the issues at hand.

In deciding between simplicity and reality, phasing may be appropriate. Given the
unfamiliarity of the TDR concept, one alternative to implementing a program is to start with a
voluntary program in order to minimize opposition. From a legal standpoint a voluntary program
may be acceptable. Once a TDR market is established, the program can be made mandatory.
Opposition to a mandatory program will be diminished due to the existence of a real TDR market.

For example, Calvert County began as a voluntary program, with no designated sending or

Chapter 12

 

 

 

367

receiving areas. Nearly two decades later, in 1993, the county was able to designated sending and
receiving areas because downzoned landowners understood the mitigating aspect of TDRs and
recognized that there was a real market for them. Calvert County illustrates how a program can
initially be simple and, once accepted and understood, made more complex in order to achieve

specific objectives.

Although the findings of the exploratory case study are grouped under six thematic
headings, a TDR Index was developed to further simplify these results. In essence the TDR index
lists key characteristics of a TDR program that can be used to evaluate program success or
failure. Additionally, the Index provides the framework for summarizing the explanatory case-

study findings. The thirteen TDR Index elements are:

l. A foundation for TDR should be in place. This foundation may include enabling legislation, a
comprehensive plan, zoning ordinance, growth management legislation or preservation
legislation.

2. The regulatory process must have sufficient integrity. This may include strict zoning, e.g.
exclusive agricultural zone, a comprehensive plan or master plan and zoning ordinances
which support and permit TDR implementation. Additionally, development design standards
and criteria should be defined in order to achieve the desired type of development. The
NIMBY scenario is more likely if these standards and criteria are not in place; people will
anticipate the worst possible development and petition against it.

3. A sense of place should exist in the program area, across sending and receiving areas. It is
not enough to have a sense of place in the preservation area or within the receiving area.
Because TDR program success is dependent on transfers of rights from one area to the other,
the sense of place must encompass both sides. Citizens in the receiving areas must identify
with the benefits of preserving sending area land, while citizens in the sending area must
identify with the benefits of directing growth to receiving areas.

4. The resource should be perceived as valuable enough to preserve. It is best if the resource
has multiple values it is best and it has the support of the entire preservation community - all
factions, not just the well organized. Given the variety of stakeholders in the community, the
resource value needs to be presented from all perspectives.

5. A rapidly growing area means there is a sufficient development market. The program area
needs to encompass a diverse real estate market (Pizor 1986). TDR works best in rapidly
growing urban fringe areas. In order to succeed there must be opportunities for developers to
utilize TDRs.

Chapter 12

 

10.

11.

12.

13.

368

An understanding of development demands and patterns is needed in order to locate sending
and receiving sites appropriately and set zoning base and bonus densities accordingly. In
order for TDRs to be in demand they must be required in areas where development is
demanded. Additionally they must be required for the type of development in demand.

Viable receiving areas require a market for intensity and type of development allowed by
TDR use. The receiving sites must be politically acceptable and physically feasible sites —
centralized sewers and water. Additionally, they need to be feasible from a planning
perspective, i.e. meet the comprehensive plan, zoning conditions and design standards and
criteria.

Public support is critical and requires TDR education programs. All stakeholders within the
program area must be well informed. If the community does not understand TDR concepts
and processes, it will never be supported. Overall community support is essential for a strong
TDR program. Ofien a facilitating agency or bank plays an important role in the education
process.

Leadership plays an important role. There must be leadership within and across stakeholder
groups, for example the farming community, developers, lending institutions and real estate
brokers. Early involvement of private sector interests can instill a sense of partnership and
cooperation (Siemon 1996 p.34). Political leadership is critical given TDR is a policy
decision.

Mandatory programs appear to be more successful than voluntary. Mandatory programs by
definition require downzoning of either the sending or receiving areas. Downzoning in the
sending area provides an incentive for landowners to sell TDRs. Downzoning in the
receiving area provides an incentive for developers to acquire TDRs to build at bonus
densities. Prohibitions on development in either the sending or receiving areas must be
comprehensive and mandatory; if not, the credibility of the TDR program is in question.

A TDR Bank can serve several important firnctions. A bank can purchase and sell TDRs to
balance the market. It can act as a buyer of last resort. Banks have strengthened program
credibility with banking institutions and mortgage lenders. A bank can also fiinction as a
facilitator, simply bringing potential TDR buyers and sellers together.

TDR works well in concert with PDR or other easement purchase programs. TDR and PDR
are complementary programs. The former allows the market to decide what parcels to
preserve, while the latter targets parcels for preservation. They also work well together,
given the limited firnds of most PDR programs. By utilizing PDR fiinds strategically, these
limited funds can be maximized. TDR with its private funds can be used to strengthen PDR
efforts.

TDR as an option should be simple and cost-efficient. If the program is too complex to
understand or too costly to participate in, potential TDR sellers and buyers will not become
involved. TDR programs should be structured clearly and TDR concepts should be applied
with as much simplicity as possible.

Chapter 12

 

 

 

369

Explanatory Case Study Findings

The findings of the explanatory case studies are organized under the TDR Index. Each
Index element is discussed based on the explanatory case-study findings. Although most
elements were applicable to each of the explanatory case studies, their influence within each TDR

program varied.

Foundation for TDR

When the foundation for TDR is weak, the TDR program sees limited use. When the
foundation is strong there is more TDR activity on both the preservation and development sides.
TDR enabling legislation did not exist in any of the three cases when the programs were initiated,
although in the Pinelands case there was federal and state legislation that supported the TDR
concept and Pennsylvania had enabled TDR use under its Municipalities Planning Code.
Essentially, the legal foundation for the Manheim and Montgomery programs was found within
the police power to regulate land use through planning and zoning. The legal foundation for the
Pinelands TDR program (PDC) was found in state and federal legislation that established the
Pinelands Reserve. Additionally, the PDC program is one element in a comprehensive Pinelands
Protection Program that also includes the Comprehensive Management and the Land Use
regulatory programs. In Manheim, the legislation and administrative foundation for TDR is weak
and has contributed to its limited use. At the time the TDR program was initiated the
Comprehensive Plan did not support TDR use. Comparatively, Montgomery County’s program
foundation was established with its Wedges and Corridors Plan and strengthened by the county’s
comprehensive master plan process. TDR is the land use element in the broader agricultural

preservation program.

Chapter 12

 

370
Regulatory Process Must Have Sufficient Integrity

The regulatory process must have integrity so that potential TDR participants can be
assured that their position in the TDR program will be maintained over time. Sending-area
landowners must be assured that the zoning will not change, thus assuring them security through
TDR participation. Receiving area landowners must be assured that bonus densities will only be
achieved through TDR participation, and not through zoning changes and variances. Manheim
designed and implemented its TDR program as part of an overall land use policy. They did not
want growth management to rely on the success or failure of the TDR program. Rather, they
designed the TDR program so that if it did fail it would not be counterproductive. This suggests
that the TDR program may lack integrity. The lack of TDR transfers in Manheim Township may

be a self-fulfilling prophecy; it was set up so it could fail, and therefore it is failing.

Comparatively, the consistent regulatory atmosphere in Montgomery County not only
permits the TDR program to firnction, it has led to its success. A countywide TDR program is
possible because of the master planning process and its coordination of separate master plan
policy areas. In particular the Functional Master Plan for the Preservation of Agricultural and
Rural Open Space Plan, in place nearly twenty years, provides regulatory integrity. Regulatory
integrity can also be seen in the continuity of the agricultural-reserve boundary. As deve10pment
encroaches on the agricultural reserve, there is pressure to push the boundary back through
rezoning. Although the county council has the authority to move the agricultural reserve line, it

has remained in the same location for nearly eighteen years.

Because the Pinelands contain fifty-three municipalities, it is difficult to establish and
maintain regulatory integrity. Although the regulatory integrity of each municipality within the
Pinelands was not evaluated, the overall regulatory integrity of the Comprehensive Plan and Land

Use Program was assessed. Opportunities for changes in PDC allocation are built into the

Chapter 12

 

 

371

program, for example parcels not in sending area locations are eligible to apply for credits under
certain circumstances. Even though the Pinelands Commission does not have the regulatory
authority to adopt a zoning ordinance, the municipalities have to incorporate all Pinelands
Commission policies and requirements. The regulatory integrity is therefore dependent on the
Pinelands Commission. The Pinelands Commission works in cooperation with the

municipalities, and has resulted in a partnership that allows the PDC program to function.

Sense of Place

All three program areas reported some degree of sense of place. However, in the case of
Manheim Township the sense of place within sending and receiving areas was stronger than the
sense of place across the township. This imbalance may be another contributing factor to the
limited use of TDRs in the receiving areas. The Pinelands experienced the same phenomenon of
more than one sense of place. Due to its ecological resources, sense of place in the Pinelands is
very apparent. People know when they are in the Pinelands as they drive by cranberry bogs or
walk through the pygmy forests. However, for most residents this sense of place is
overshadowed by their municipal identity; municipal sense of place remains stronger than any
identification across the Pinelands. Montgomery County realizes that an overall county sense of
place is critical to its program, particularly because the vast majority (approximately ninety-seven
percent) of county residents do not live in the sending areas. Montgomery County has a very
aggressive agricultural marketing program to assist in creating a sense of place across the county.
The result is that, of the three explanatory case studies analyzed, Montgomery has been the most
successfirl in terms of number of acres preserved and also in number of development

opportunities realized in receiving areas.

Chapter 12

 

372
Resource Perceived as Valuable

In all three cases the resource targeted for preservation is valued. The real question is to
what degree is the resource valued and whether this translates into action within the TDR market.
In Manheim and Montgomery the resource in question is agricultural land and open space. In
both cases this land is valued for both economic and aesthetic reasons. In both cases when the
TDR program was initiated the emphasis was on the economic value of agricultural lands.
Currently it appears that the residents of Manheim value rural character more than agricultural,
whereas in Montgomery County the economic value of agricultural lands still dominates. The
limited use of TDR in Manheim and the success of TDR in Montgomery may be partly attributed
to this difference. The farming community may be better organized and more motivated to make
the TDR program work than stakeholders interested in preserving open space. For the
agricultural community, the protected land represents their livelihood. The Pinelands offers a
contrast, because the resource was perceived as valuable from the top down. Both the federal and
state legislative bodies felt the resource was valuable enough for protection. The slow start of the

PDC program indicates that initially Pinelands citizens may not have been in agreement.

Rapidly Growing Area

Both Manheim and Montgomery County, because of their proximity to urban centers,
were rapidly growing areas, whereas the Pinelands contains areas with high growth pressure and
vast areas where development pressure is low. Because there are alternative areas for growth, the
growth pressure in the Pinelands receiving areas is masked. The growth of the program area must
be considered within the regional context in order to appropriately design a TDR program. While
Manheim is still experiencing growth, surrounding townships are experiencing stronger growth.
TDRs will be most marketable in areas where the growth rate is greatest. Given the Townships
decrease in growth rate, the township may have to consider additional incentives for TDR use

beyond increased density. Unlike Manheim, the development pressure in Montgomery County
Chapter 12

 

 

 

373
has remained high since the 19505. Ironically, the County’s success in preserving agricultural

land has contributed to the growth pressure that threatens the farmlands and the farming
community. Because Montgomery County has been successfirl in accommodating growth and
protecting agricultural lands, it continues to be a desirable place to live. Consequently, it is an

ideal community for a TDR program.

Understanding of Development Demands and Patterns

Manheim Township’s housing market was dominated by single family detached. This
trend combined with the availability of undeveloped land in the township (thirty-six percent) may
be another reason why Manheim Township is having difficulty in marketing TDRs to developers.
Montgomery County understood the threat of development and the pattern of development when
it initiated its TDR program. The county locates receiving areas and establishes base and bonus
densities through the master plan process, which requires development patterns to be considered
and understood. Thus decisions are made by those who understand the policy area’s development
demands and patterns. Additionally, Montgomery County used a pilot program to fiirther
understand development demands and the role of TDRs in the development market. In the
Pinelands, a study was conducted in the late 19705 and early 19805 on development demand,
indicating the predominant form of development was residential. It appears that although the
Pinelands did have a good understanding of the development demands and pattems it did not
design and implement a TDR program that recognized this understanding. For example, the base
densities in the Pinelands receiving areas were set too high, and therefore weakened any incentive

to use TDRs.

Viable Receiving Areas
There were viable receiving areas in all three cases. Yet only one, Montgomery County,
has seen extensive transfers of development into receiving areas. Virtually all of Manheim

Chapter 12

 

 

374

Township has available public water and sewer service with sufficient capacity to accommodate
additional growth. While this means that receiving areas are physically feasible, it also means
that preserving low densities is more challenging. Additionally, it appears that densities achieved
under base zoning and with the cluster option are sufficiently high to meet housing-market
demand. While maintaining high base densities avoids any receiving-area controversy, it
weakens the TDR market. The question remains whether Manheim’s receiving areas are viable
from a market standpoint. The lack of TDR sales to developers suggests that they may not be
viable. In Montgomery County the receiving areas are identified in adopted and approved master
plans and therefore are consistent with environmental, transportation, housing and population
guidelines, i.e. viable receiving areas. The receiving-area identification process yields politically
acceptable and physically feasible receiving sites. The Pinelands encompasses a diverse real-
estate market and therefore allows developers to use TDRs for a variety of development projects.
However, the limited number of PDC certificate redemptions in the Pinelands indicates that
viable receiving areas have not been established. In the late 19805 it was determined that base
densities were too high, resulting in minimal PDC transfer to receiving areas. Furthermore, the

regional growth areas did not offer prime development opportunities due to lack of infrastructure.

Public Support

The explanatory case studies revealed that three issues associated with public support that
must be considered: timing, education, and stakeholder groups. Regarding timing, in the
Pinelands, because the program was initiated through state and federal legislation, public support
was less evident during the initial program years. However once the program was implemented
public support was critical. In Manheim public support was critical in achieving TDR program
adoption and was de-emphasized once the program was started. This is directly related to the
lack of TDR sales and transfers. Montgomery County has relied on public support from the

conception of the TDR program through today. Administrators of the Montgomery County TDR
Chapter 12

 

375
program are well aware that its success depends on the same public support required to

implement the program. The county has made a commitment to achieving public support from
landowners in both the sending and receiving areas. This is evidenced by the active roles of both
the Office of Economic Development and the Planning Department in the TDR program. While
the primary responsibility of the former is to gain agricultural community support and educate
that community regarding TDR, the latter’s primary responsibility is the growth side, educating
potential receiving-area landowners and developers on the benefits of TDR and how to
participate. Another indication that Montgomery County, and to some degree Pinelands,
program administrators are concerned with public support is found in the conscious decision to
not sell publicly acquired TDRs, recognizing that this direct competition with sending-area
landowners could result in less public support. In both these programs, concern with public

support is also evidenced by an extensive education effort.

There is a direct correlation between public education and public acceptance, without
which a TDR program can not succeed. Acceptance is dependent on the public understanding the
TDR concept and program elements. A TDR program needs a component, body or agency that
can educate developers and sending landowners on the process and its costs and benefits. In
Manheim Township this responsibility is left to an overworked planning department; in
Montgomery County, two well staffed offices share this responsibility; and in the Pinelands, the

PDC bank and Pinelands Commission combine their efforts.

Regarding stakeholder groups, in each program area the stakeholder groups and their
support of the program differed. When the Pinelands program was initiated, none of the
stakeholders supported it; the development community, the farming community and municipal
officials all opposed it. This lack of support made implementing a TDR program much more of a

challenge. Due to federal and state legislation, the Pinelands Commission was forced to deal with

Chapter 12

 

 

376
the opposition. In Manheim Township the builders and developers did not oppose the

downzoning or TDR program. In Montgomery County builders were indifferent; they did not
care where they built, as long as they could. The real-estate developers initially focused on the
reduction of the number of homes that could be built in the agricultural areas. Once they realized
that the program did not diminish the number of homes in the county and only redistributed them,
they accepted the program. In Manheim Township, the agricultural landowners initially opposed
the downzoning and this opposition introduced the TDR concept. Public support for the program
increased when farmers learned that TDRs were an alternative, or option, and meant a return
without having to sell the land. In Montgomery County the farming community is now a strong
proponent of the program; however, initially they were leery of “yet another promised
agricultural preservation program.” Program administrators realized that this was a critical group

to consider, and that there was a distinction between active and retired farmers.

In all cases, part of the farming community opposition was based on the belief that the
TDR program would affect its ability to borrow money. In Montgomery and in the Pinelands this
fear was unsubstantiated. Farmers feared that land values were going to be driven down and that
lenders would not lend money. Business lenders lend money on the basis of the businessperson’s
ability to repay the loan. The collateral is a last resort. The lender examines the farmer’s ability
to repay the loan; this ability is based on the income the farming business generates, not on the
speculative value. No lender would lend in excess of what is needed to operate the farm, i.e. no
more than what the farm is worth in agricultural use. In both Montgomery County and in New

Jersey, once the TDR program was explained to lending institutions, this issue was disarmed.

Political Leadership
The importance of political leadership is evident in all three explanatory cases. Political

leadership and commitment are particularly important in the inaugural years of a program. This

Chapter 12

 

 

377
leadership may be directly related to the TDR program or to program goals. An example of the

latter is found in Manheim Township, which has exhibited political leadership and the
willingness to preserve agricultural lands. The Board of Commissioners was the first to exhibit
this leadership, committing itself to an agricultural district in 1990. The township has also played
an active leadership role in working with a developer to utilize the technique to direct growth to
receiving areas. Because the township’s planning office has numerous responsibilities beyond

TDR, its leadership role in educating the community has been limited.

In Montgomery County and in the Pinelands, political leadership is more evident and has
resulted in greater TDR activity. The political leadership in Montgomery was willing to move
forward despite the absence of state enabling legislation. In part this was because the alternative
to not moving forward was viewed as more detrimental. Another illustration of county leadership
was the establishment of the TDR firnd. Although never used, it demonstrated that the County
was ready and willing to take a leadership role. In the Pinelands, the Commission and PDC bank
were forced to take a leadership role by the state and federal legislation. The PDC bank has taken
the lead in the PDC program, acting as facilitator, educator and program monitor. Because the
Pinelands Commission administers the overall Pinelands Protection program, of which the PDC

program is only a part, its ability to lead in the PDC program is limited.

Mandatory versus Voluntary

Because by definition mandatory programs require downzoning, each of the three
explanatory programs is mandatory on the sending side. It is interesting that each also claims to
be voluntary because sending-area and receiving-area landowners are not forced to transfer
development rights. In Pennsylvania, the legislation that enables TDR use requires “voluntary
use of TDRs.” In each case the only way a landowner can realize a return is through the sale of

TDRs. Thus, in this study any program that involves downzoning is defined as mandatory. On
Chapter 12

 

 

378
the receiving side, Manheim is mandatory while Montgomery County and the Pinelands are

voluntary. Manheim Township was creative in its program design and implementation, blurring
the line between mandatory and voluntary to its advantage. Because downzoning was not part of
the 1991 TDR ordinance, it is by definition voluntary. By promoting the program as voluntary
the township minimized opposition. However, the sending area was downzoned through the
previous 1989 zoning ordinance, and therefore the program is a de facto mandatory program.
Similarly, the receiving area had been substantially downzoned prior to TDR program adoption,
such that development rights transfer resulted in basically a continuation of pre-TDR
development densities. Again, this served to minimize any sort of NIMBYism. In Montgomery
County the agricultural reserve was downzoned and thus the program is mandatory on the
sending side. On the receiving side the program is voluntary. Receiving-area landowners can
develop at base zoning densities or seek a rezoning to allow a higher density without any TDRs.
The Pinelands program is mandatory on the sending side and voluntary on the receiving side.
Properties were effectively downzoned within the preservation and agricultural areas. In the
receiving areas, the program is voluntary, because TDR bonuses are typically higher than the
normal (base density) development intensity was in 1980. However, base densities were set at
levels which roughly approximated the type and intensity of development that had been occurring
in the region. Only when there is an interest in higher-density development will TDRs be used.
TDRs would be not the rule, but the exception. This was a conscious decision, made to minimize
opposition. Furthermore, Pinelands officials feared that if the receiving areas were downzoned
and the TDR program did not work, the areas would be developed at a lower density. Thus the
housing demand would not be accommodated and would result in greater development pressure

in the conservation areas.

Chapter 12

379
TDR Bank

Each of the three explanatory cases represents a different type of level of public bank.
Although Manheim Township does not have a formal TDR bank, it has a line item in its budget to
purchase development rights. Township officials felt they could not implement a formal TDR
bank because they have neither the legislative authority nor the staff for such an endeavor. In
Montgomery County, because the TDR concept was unfamiliar, public acceptability and
confidence were viewed as critical. To assist in achieving both of these objectives, a TDR bank
was established in 1982 and became operational in 1985. It was established to provide a degree
of financial stability, to alleviate farmers’ concerns, to act as a lender and buyer of last resort, and
to guarantee TDR values. However, due to the strength of the private sector, public firnds were
never utilized. The bank firnctioned only as a facilitator, putting buyers and sellers together.
Despite its lack of use, the bank was absolutely necessary because it represented a commitment to
the farming community. The bank was eliminated in 1990 due to a sunset clause. In the
Pinelands, the PDC bank is much more than a firnding agency. Aside from purchasing PDCs, the
bank performs a number of important roles including facilitator, administrator and educator. It
maintains all PDC transfer and potential transfer information, including a list of people interested
in buying PDCs, a list of potential sellers, a registry of people who have severed PDCs and

received PDC certificates, and a list of all PDC sales and prices.

PDR/TDR Linkages

A purchase-of-development right alternative exists in each of the explanatory case areas.
The level of PDR activity or the compatibility between PDR and TDR differs from case to case.
Although Manheim Township does not have a municipal PDR program, discussions of the
possibility of retiring township-purchased TDRs indicates a township PDR program may be in
the firture. Additionally, a county PDR program does exist, and the township does coordinate its

TDR efforts with the county’s PDR efforts to maximize agricultural preservation. In
Chapter 12

380
Montgomery County, the TDR program was designed to work in coordination with other state

and county agricultural preservation programs. The County Agricultural Easement Program
(AEP) gives the county the ability to purchase agricultural land preservation easements. With the
AEP, specific preservation properties can be targeted. Thus the purchase of development
program can complement and add structure and strategy to a TDR program. For example, the
majority of AEP firnds, ninety percent, have been used to purchase easements a half-mile back
from the agricultural reserve boundary line, creating a buffer zone. Within the Pinelands, PDR
has had a negative effect. The state conservation easement program sees little activity within the
Pinelands. Because purchasing funds are distributed to counties, they decide what areas to target
for conservation easements. Many of the counties have targeted their efforts outside the
Pinelands, for three reasons. First, the area outside the Pinelands is where the farms are under
greatest threat. Second, the counties take into account that the Pinelands has TDR And third,
some counties view easements in the Pinelands as worthless because they are not extinguishing
development rights. Currently there is some discussion on preserving lands within the Pinelands
using the farmland preservation program. In addition to the farmland preservation program, there
is the DEP land acquisition program. Although it is a fee simple acquisition, at times easements

have been purchased. That program works in tandem with the TDR program.

Simple and Cost-Efficient

All three explanatory case studies concurred that simplicity is a key element for success.
Each has addressed different program elements in order to achieve simplicity. While the
Manheim TDR program has been successfirl in keeping the program simple, making it easy to
understand and administer, it is also the least successful. Manheim utilized familiar planning
concepts, thereby eliminating some of the complexity of TDR programming; for example, the use
of the agricultural district as the sending area and all R-1 and R—2 zones as receiving areas. An

indication that Montgomery County made a concerted effort to keep the program simple is the

Chapter 12

381

integration of the transfer process into the familiar subdivision approval process. Additionally,
the sending-area locations are based on the former rural zone and the TDR allocation rate treats
all land the same, based on the previous zoning of one TDR per every five acres. The Pinelands
program is one of the most complex TDR programs in existence, due to its regulatory origins, its
inclusion of multiple jurisdictions, its preservation goals, its allocation method, and its concept of
credits and rights. The Pinelands’ lack of simplicity is the major reason cited for the activity
levels in this nearly twenty year-old TDR program. Due to the PDC program’s inherent
complexity the program has been slow in establishing. The Pinelands Commission and the PDC
bank have been instrumental in reducing the complexity through education and outreach efforts.

The result has been activity in TDR allocation, severance and therefore land preservation.

Simulation Model Findings

In developing a TDR simulation model and running the model, several findings were
revealed. To accommodate the projected 2010 population 1,302.5 acres were converted to
residential use. Agriculture to residential contributed 322.5 acres, while orchards accounted for
137.5 acres. The number of non-forested acres converted was 417.5 and the number of forested
acres converted was 1062.5 acres. To serve the additional 2020 population 1,005 additional acres
were urbanized. The number of agricultural acres lost to accommodate this population was
357.5, while 205 acres of orchards were converted. Non-forested acres totaled 315. During this
second time period the number of forested acres converted to residential use was 127.5. Given
that one of the driving variables was distance to forest, it is not surprising that during the first
time period the conversion of forested lands dominated the simulation run, whereas in the second
run forested lands were the smallest percentage. The decline in the number of forested cells
converted in time period two may be attributed to the diminishing forests and their location. The
increase in agricultural lands, and particularly orchard, from 2010 to 2020 time periods is

noteworthy. Currently Alpine Township considers its agricultural resources protected fi'om the
Chapter 12

 

382

threat of development. The model simulation runs indicate that rate of agricultural land loss may

 

increase with time. The model should be applied to subsequent time periods to analyze the rate of
the loss over a longer period of time. In total over both time periods 2307.5 acres were converted
from agricultural and open space use to residential use. Agricultural acres totaled 680 and
orchards totaled 342.5 acres. These losses indicate that additional agricultural preservation
techniques may be usefirl as Alpine tries to retain its agricultural economy and fanning-

community character.

Using the model to analyze sending and receiving options illuminated the difficulties
associated with identifying receiving areas, the practical differences in addressing individual or
multiple preservation goals, and the complexities associated with achieving a balance between

receiving and sending TDR opportunities.

Regarding the difficulties associated with identifying receiving areas, the model
illustrated that a host of variables are involved in identifying viable receiving areas. Those

variables were distance to roads, highways, rivers and streams, lakes, forested areas and other

 

residential areas, slope, planning cost, sewer, water and land use. With respect to the model,
viable receiving areas were those that were physically most appropriate for residential
development from both a buyer’s perspective and a developer’s perspective. Other than using
zoning, political viability was not considered. Decisions on what variable to include and the
weight each of these should carry in the analysis are the same decisions TDR program designers
must address when identifying potential receiving areas. Using the model it is apparent that
assumptions must be made in order to move forward. As in TDR programming, the model needs
to be flexible in order to consider additional variables, change weights, or eliminate variables.
TDR programming must also be flexible. If identified receiving sites are not having TDRs

transferred in, the program needs to be evaluated and changed.

Chapter 12

383

By examining four sending area options, the practical differences in addressing individual
or multiple preservation goals was addressed. Under option one, only prime farmland in
agricultural zoning was included in the 7,285-acre sending area. Under option two prime and
prime-if-drained farmland in agricultural zoning was included, resulting in a 10,357.5-acre
sending area. Under option three, only land that was in orchard use and designated prime
farmland in the agricultural zone was included in the 2812.5-acre sending area. Under option
four, land that was either prime or in orchard use was included, resulting in a 10,060 acre sending
area. Options one and three represent a TDR program that is focused on agricultural
preservation, but has the primary goal of preserving prime farmland or even more specifically
under option three prime farmland in orchard use. Options two and four represent a broader TDR
program, addressing more than one agricultural preservation goal. Because the number of acres
in the sending area is less under options one and three, these may be more politically acceptable.
Additionally, by decreasing the acreage in the sending area, those farmers would have less
competition in the TDR market. More importantly, their competition would be solely with

farmers with the same agricultural land values.

Using the model to compare sending to receiving opportunities, it is evident that there are
complexities associated with achieving a balance between receiving and sending TDR
opportunities. Even if the assumptions associated with identification of receiving and sending
areas are accepted, determining the number of TDR opportunities to be associated with each area
requires additional assumptions to be made. This is true not only in model development, but
more importantly in TDR program design. The model first determined the number of receiving
TDR opportunities. In turn this number was used to determine the number of TDRs to be
allocated in the sending area. The case-study analysis revealed that many TDR programs that

went in the reverse direction — determining the number of TDRs to be allocated in the sending

Chapter 12

384
area first - resulting in a limited number of transfers. If a TDR program goal is to be a market-

driven policy, then it is critical that TDRs be in demand. The success of TDR programs may be
misunderstood, if the only sales of TDRs are to public banks and the TDRs are never utilized for

development; in essence these programs are successfirl PDR programs.

The model used the Alpine Township 1998 draft master plan to identify the maximum
densities in the identified receiving areas. Decision rules were then developed to determine how
much of this density was to be achieved as a zoning right and how much was to be achieved
through TDR transfers. Two receiving options were examined. Under the first option, in all
districts except rural agricultural the maximum allowable density as defined in the plan could be
achieved only through TDR utilization; the base density was set slightly below. In the rural
agricultural zone, the plan density represented the base density, and with TDR use the density
could be slightly increased. Under the second receiving area option, in all districts the maximum
allowable density as defined in the plan could be achieved only through TDR use, and the base
densities were set slightly below. The case studies revealed that drastic changes between base
and bonus densities did not increase TDR use; rather, they created opposition and resulted in less
TDR activity. The number of TDR opportunities determined was 717.5 under receiving-area
option one and 679 under receiving-area option two. Using these figures the number of TDRs to

be allocated in the sending area was calculated.

To calculate the number of TDRs to be allocated in the sending area, the model used
three ratios, two to one, one to one and 1.5 to one. In each case, under each of the four sending
area options, the TDR allocation rates are either close to the current agricultural zoning or higher.
With a TDR program designed to provide a two to one receiving to sending ratio, under receiving
area option one, 358.75 rights must be allocated in the sending area; under option two, 339.5

rights must allocated. Under this ratio, the amount of acreage needed for a development right is

Chapter 12

385
highest. However, even though highest, with the majority of allocation rates between one right

per twenty acres to one right per thirty acres, this represents a slight downzoning from the current
density. Although only a slight downzoning, given Alpine Township’s already strict agricultural
zoning, this may be politically unacceptable. With a TDR program designed to provide a one to
one receiving to sending ratio, under receiving area option one, 717.5 rights must be allocated in
the sending area; under option two, 679 rights must allocated. Under this ratio, the amount of
acreage needed for a development right is lowest. When rights are allocated only to prime
farmland in agricultural zoning, the allocation rate is similar to the current zoning, one right per
ten acres. When only prime farmland under orchard production is included in the sending area,
the allocation rates are below current rates, with one TDR for every four acres. These allocation
rates provide an incentive for sending-area landowners. Agricultural property owners are
allocated more TDRs than the number of splits they are allowed under the sliding-scale zoning.
Additionally, by keeping these allocation rates at least in line with current zoning, the TDR
concept has a greater chance of being accepted by the agricultural community. Opportunities are

not being taken; rather, alternatives are being offered.

Integration of Findings

The findings from the exploratory, explanatory and TDR simulation model indicate that
transfer of development rights may be an appropriate growth management and land preservation
technique for communities to address the issue of sprawl and its effects on open space and
agricultural lands. Additionally, the findings indicate that the complexity associated with TDR
can be reduced through tangible examples and simulation modeling. The TDR index provides a
framework for addressing program characteristics in order to understand their role within a
particular program-area context. Although these elements were identified as characteristics of a

TDR program that can be used to indicate success or failure, they can be applied to other growth

Chapter 12

386

management or land preservation techniques. For example, the index element discussing viability
of receiving areas is applicable to communities investigating urban growth boundaries. The
sense-of-place index element is applicable to any program area, and lessons learned from the
exploratory and explanatory case studies may prove useful to other communities trying to
determine if a sense of place exists or how to create one. The element of public support,
including an education and outreach element, is applicable to any community interested in

identifying appropriate agencies and activities for public education.

The study findings that were evident in all three study parts are particularly enlightening.
A TDR program or resource protection program must have a strong regard for the resource
targeted for protection. This regard must be strong enough to warrant action. Alpine Township
has demonstrated through strict agricultural zoning that it does value its agricultural lands. The
case studies demonstrated that the program area needs to be experiencing growth pressure.
Although Alpine Township’s land use policies are dealing adequately with the growth pressure,
using population projections the model indicates that it may only be a matter of time before its
valued agricultural land and orchards come under enough pressure to result in land conversion to
residential use. Additionally, because the pressure is currently relatively low, it may be an
opportune time to attempt a voluntary TDR program. Unlike most of the programs explored in
the case studies, Alpine Township has strict agricultural zoning and limits development in its
agricultural zone to such an extent that downzoning would not be necessary in a TDR program.
TDR could be implemented without any change to the current agricultural zoning, and thus offer
farmers another alternative without taking away opportunities. The current agricultural zoning
provides a regulatory framework in which TDR can firnction. Additionally, development options
are already limited through Alpine’s sliding-scale agricultural zone, therefore setting the stage for

offering TDRs as an incentive.

Chapter 12

387
The case-study findings and legal literature review indicate that TDR enabling legislation

need not be a precursor to TDR program initiation. Furthermore, bold communities such as
Montgomery County that moved forward despite the absence of enabling legislation are
responsible for the formulation of enabling legislation. Because PDR has been passed in
Michigan and the TDR portions of the bills were eliminated, it is highly probable that TDR
legislation will not be passed. However, the case law suggests that TDR has fallen under the
police power and specifically under the power to zone. The legal precedents have not been well
established, although the use of TDRs has been upheld. A number of the case studies have faced
legal challenges and have been upheld, e.g. Montgomery County and the New Jersey Pinelands.
For these reasons, and the need to address preservation goals and guide growth with limited
public firnds, Michigan communities may be forced to move forward with TDR enabling

legislation just as Peninsula Township is doing.

With the exception of the Pinelands program, TDR programs initiated by citizens in the
community have seen the greatest success. Citizen involvement in initiating and designing a
TDR program coupled with municipal commitment results in TDR transfers. The case studies
demonstrated that both groups are needed. Alpine Township has demonstrated commitment to
agricultural preservation, and the citizens have demonstrated their support with widespread
attendance at land use meetings. Alpine is an active member of the North Kent Township
Association, which provides land use leadership at a regional level. The case-study findings
indicated that a TDR program should be based on a primary resource objective and that the
sending area should be based on this same primary resource. The model indicated a vast
difference in the number of acres under the sending area options that included multiple resource
objectives versus the single resource objective of preserving prime farmland in orchard use.
Further work must be done to determine how the primary TDR program goal can be determined

and what that primary goal is.
Chapter 12

388

Each study section indicated that receiving-area identification and setting of base and
bonus densities is one of the most challenging aspects of TDR programming. This is firrther
supported by the TDR case law. The case studies showed that identification of viable receiving
areas is critical to TDR transfers and that viability included both a physical and a political aspect.
The model addressed only the physical aspect and demonstrated that a number of variables must
be considered and that the variables must be weighted differently. Simply identifying potential
receiving areas is a difficult task, and is firrther complicated by the necessity to set base and
bonus densities. The TDR model demonstrated only two receiving-area options, both very
similar. The lesson learned from the exploratory and explanatory case studies was to not vary
base and bonus densities so much as to change the development type. Further research should be
done by lowering the base densities even further and determining how many TDRs could be

accommodated.

Across the board, the findings also suggested that the balance between TDR opportunities
in the receiving area and the number of TDRs allocated in the sending area is at the heart of a
successful TDR program. This study has begun to look at this, using ratios suggested in the
theoretical TDR literature and ratios utilized in existing programs. The model shows how base
and bonus densities and the acreage included in both the receiving and sending areas affect the
balance. While the theoretic literature suggests a two to one receiving-to-sending ratio, most of
the case study programs could not achieve that, fearing a NIMBY response to extensive receiving
areas. With a better understanding of market trends and patterns, a one to one ratio may actually
achieve the needed balance. However, a program must be flexible and an evaluation component
must be built into the TDR program so that the balance can be assessed and, if necessary, sending
and receiving opportunities can be altered. It should be noted that changing allocation rates

would undermine the regulatory integrity of the TDR program. The TDR model suggests that the
Chapter 12

 

389

difference between allocation rates using various ratios may not be that great and therefore

program designers should decide what ratio will be political acceptable.

The most dominant finding across the three study parts is that simplicity is critical.
Although the model permits a multitude of permutations and variations, the complexity examined
did not contribute dramatic TDR program changes. The model examined only two receiving
options and four sending area options under three allocation ratios. The differences were minimal
and the confiision was great, and this was a simulation model! Introducing this complexity into a
real-world TDR program would be detrimental. In all exploratory and explanatory cases, the
general finding was the simplicity was paramount to a successfirl TDR program. While this is
true for many policies, it is particular true for this policy, which has seen limited use and is
currently misunderstood. A TDR program must be simplified as much as possible in order to be
understood and accepted. Complexity can be reintroduced once the TDR program is accepted

and its viability proven; until then all study findings indicate that simplicity is crucial.

Recommendations for Future Research

The exploratory and explanatory case findings indicate that development right transfers
will occur only if the program is well conceived and based on a thorough understanding of the
development market. This is an area for firrther research that must be integrated into the model.
Housing and land costs must be examined in a spatial context to determine what types of housing
are in demand, where, and at what price. On the sending side, agricultural land values need to be
examined and acceptable TDR prices need to be estimated. This study has located potential
sending and receiving areas, so that the analysis of economic data can be limited to those areas.
Furthermore this analysis should begin with sending area options one and three, because the

model results indicated that TDR allocation rates would be similar or below the current zoning;

Chapter 12

 

 

390
thus they are potentially more politically acceptable. Additionally, these options are based on the

 

primary goal of prime farmland preservation and orchard preservation.

Another area to be researched is the regional effects associated with a TDR program.
The simulation model must be expanded to include more than one township to reflect regiorml
growth patterns and trends. The Manheim Township case illustrated the problems associated
with a township TDR program in an area that has regional growth trends. Developers have told
Alpine Township officials that rather than contend with Alpine’s regulations, they will continue
to build in neighboring Plainfield Township, a pro-growth community. A day will come when
Plainfield is built up and Alpine’s agricultural fields and orchards will be enticing enough to
contend with the regulations. Additionally, because these neighboring townships have two
different perspectives on growth, modeling a TDR program across jurisdictional boundaries may

highlight the advantages to regional planning.

Transfer of development rights programming is a private-market alternative to managing
community growth and preserving resources. This study has examined the use of TDR to protect
open space and agricultural land. It is important because communities today are contending with
the loss of economically, socially and environmentally valuable lands at the hands of uncontrolled
development. As communities increase in population and residential density requirements
continue to rise, growth and urbanization will result in fiirther degradation of the landscape.
While development must continue, sprawl need not. An understanding of TDR and its concepts
can offer an alternative to communities facing this pressing land use issue. This study assists
communities in making an educated decision on whether TDR or elements of TDR are an

appropriate altemative for their community.

Chapter 12

 

 

APPENDIX

 

APPENDIX A

Interview Questions

Background Planning Issues:

0 Has a municipal/regional vision been established in a comprehensive Plan or through any
other processes?

0 Document planning history leading up to TDR and post TDR

- Has build out analysis been done?

0 Was there commitment to growth management, if so how was this exemplified?

0 Has infrastructure planning been an integral part of the vision or comprehensive plan?

0 Does the program area have cluster development option?

0 Is cluster development a familiar concept?

0 Does the TDR program complement or compete with cluster development option?

0 Enabling legislation in place? What legislation provides statutory authority for TDR?

Overall Program issues:

0 What were the original goals and objectives of the program?

0 Have these goals changed?

0 Is there a sense of place in the program area?

0 If so was the sense of place evident at the onset of the program?

0 Who were the main proponents of the program? Who posed the most opposition?
(List stakeholders, indicate if they were perceived as proponents or opponents and rank
them.)

391

 

 

392
PROPON EN T OPPONENT

FARMING COMMUNITY

LANDOWNERS IN PRESERVATION AREAS
LANDOWNERS IN GROWTH AREAS
BUILDERS

ATTORNEYS

REAL-ESTATE PROFESSIONALS (BROKERS)
DEVELOPERS

BANKERS (MORTGAGE LENDERS)
PLANNERS

LAND CONSERVANCIES AND TRUSTS
OTHER

OTHER

 

 

Was opposition overcome?

If so, how?

Is there a market for development in municipality?

What types of development are most in demand? (at what density)

Given what types of development are most in demand, do the receiving areas (the areas that
need to purchase TDRs) correspond? (i.e. if large lot is in demand, should it be large lot that
is permitted in receiving areas, but only with TDR?)

Was an economic analysis done prior to program adoption?

Was a public education program part of the TDR program?

If so, what were the critical aspects of the education program and how successfirl was it?
Has a public bank been established?

If not, why not?

If so, how has it helped/hindered the program?

Where do bank fimds come from, initial and ongoing?

Is there a complementary PDR program?

How do they work together?

What are the advantages and disadvantages of mandatory and voluntary programs?

Sending Area Issues:

What are the values to be preserved in the sending area?
What was the motivation to preserve the sending area values?

Who initiated the movement?

Appendix A

393
0 Was there any opposition to preserving the sending area?
0 Who presented this opposition?
0 What is the spatial extent of the sending area?
0 What percentage of program area is in sending areas?
0 What is the spatial distribution?
0 What was the methodology for making extent and distribution decisions? (Method and
timing)
(Check any variables that were utilized.)

SOIL QUALITY

POPULATION DENSITY

TYPE OF CROP

LAND OWNERSHIP

LOCATION

SIZE

LAND VALUES

EXISTENCE OF INFRASTRUCTURE
OTHER

0 What is the zoning of the sending area(s)?

- Was down zoning utilized?

0 If land is preserved for environmental reasons, does it mean that all economic viable use has
been taken away? IS it now a PDR or eminent domain issue?

0 Did any court cases arise?

o How are rights allocated?

o What methodology was utilized to determine this allocation?

(Check any variables that were considered in the allocation method.)

GROSS ACREAGE
CURRENT ZONING (VOL)

PREVIOUS ZONING (MANDATORY)

LAND CHARACTERISTICS, Ex SOIL QUALITY

SUITABILITY FOR DEVELOPMENT (DEGREE OF DEVELOPMENT
PRESSURE)

LOCATION

DEVELOPMENT VALUE

OTHER

0 Of the criteria not considered, why weren’t they considered?

Appendix A

 

 

394
o How many rights are needed for “bonus” in receiving area?
0 How is TDR price determined?
0 Open market, bank?
0 What is the process for landowners in sending area to receive rights for sale?
0 What incentive exists for sellers to sell?
0 What landowners in sending area are most interested in selling TDRs?

o How can they be characterized?

Receiving Area Issues:

0 How were receiving areas identified?

0 Was there any Opposition to the location of receiving areas?

0 Who presented this opposition?

- What is the spatial extent of the receiving area?

0 What percentage of program area is in receiving areas?

a What is the ratio Of receiving area capacity to sending area potential?

0 What is the spatial distribution?

0 What was the methodology for making extent and distribution decisions? (Method and
timing)

0 What is the relationship between receiving areas and areas with sewer/water service?

0 What is the zoning of the receiving area(s)?

0 What was prior base zoning of receiving area?

0 What incentive exists for developers to buy? What Opportunities do TDRs Offer? (variances
or bonus densities)

o Are there legal ramifications to programs such as Thurston’s, where the new TDR ordinance
allows developers to build 5—7 units per acres, but requires the purchase of development
rights to build at the lowest (4 du/acre) and highest (8 du/acre) permissible (under TDR
densities)?

o What are the bonus densities?

0 DO they change from one receiving area to another?

0 Have density bonuses been used to target particular receiving sites for TDR utilization, ex.
infill areas?

0 If variances can be achieved through purchase of TDRs, how often is this option utilized?

Appendix A

 

395
o What is the process for landowners in receiving area to purchase rights?
0 What landowners in receiving area are most interested in buying TDRs?

- How can they be characterized?

Political and Economic Acceptability:

o Lender uncertainty?
0 Bank/ Mortgage companies acceptability Of program, has this been achieved and if so how?
0 Is the program coordinated with municipal zoning ordinances?

0 Robin Sherman states that enabling legislation is necessary because TDR programs have
ramifications for land title recording, real and personal property taxation and security

interests in restricted land, such as mortgages, judgements and liens. Could you expand on
this?

Appendix A

 

BIBLIOGRAPHY

Bibliography

Alig, R.J., and Healy RG. 1987. Urban and Built-up Land Area Changes in the United States:
An empirical investigation of determinants. Ecological Geography, 63 (3).

American Farmland Trust. 1997. Draft of TDR Chapter.

Americana Foundation. 1992. Managing Growth: New Directions Toward Integrated Land Use
Planning. Novi, MI: Americana Foundation.

Baker, W. 1989. “A Review of models of Landscape Change”. Landscape Ecology, 2 (2).
Barlowe, Raleigh. 1978. Land Resource Economics. Prentice Hall , Englewood Cliffs, NJ.

Bateman, Worth. 1975 “Ihe Need for Further Experimentation.” Transferable Development
Rights. Planning Advisory Service Report #304. Chicago: APA.

Bingham, G., R Bishop, M. Brody, D. Bromley, E. Clark, W. Cooper, R. Costanza, T. Hale, G
Hayden, S. Kellert, R Norgaard, B. Norton, J. Payne, C. Russell and G. Suter. 1995. “Issues
in Ecosystem Valuation: Improving information for decision making”. Ecological
Economics, 14.

Boume, LS. 1967. Physical Adjustment Processes and Land Use Succession: A conceptual
review and central city example. Economic Geography, 47.

Bowen, Greg. Calvert County Planning. Phone Interview August 1997.
Bowers, Deborah. 1997. Phone Interview August 1997.

Bowers, Deborah. 1995. “After 20 Years. TDR sees varied levels of activity nationwide.”
Farmland Preservation Report. March.

Brandywine Conservancy. 1997. Can Transfer of Development Rights Work in Pennsylvaniz? A
case study analysis. Draft Report. Chadds Ford, PA: Brandywine Conservancy,
Environmental Management Center.

Brinkman, Teny. 1997. Presentation at Michigan State Land Use Forum entitled Farmland
Preservation.

Burchell, Robert W. 1996. Presentation at Michigan State Land Use Forum entitled Economic
and Fiscal Impacts of Alternative Land Use Patterns.

396

397

Burgess, E.W. 1928. “Residential Segregation in American Cities”. The Annals of the American
Academy of Political and Social Science. November.

Burrough, P.A. 1986. Principles of Geographic Information Systems for Land Resource
Assessment. Oxford: Clarendon Press.

Canavan, Denis. 1997. Interview August 1997
Capra, Fritjof. 1982. The Turning Point. Toronto: Bantam Books.

Carmichael, Donald M. 1975. “Early American Precedents.” in Rose, Jerome G. ed. The
Transfer of Development Rights: A New Technique of Land Use Regulation. New
Brunswick, NJ: Center for Urban Policy Research, Rutgers University.

. 1975. “Legal Precedents for Adoption of a TDR System: Colorado.” Transferable
Development Rights. Planning Advisory Service Report #304. Chicago: APA.

Chavooshian, B. Budd, Thomas Norman and George H. Nieswand. 1973. “Transfer of
Development Rights: A New Concept in Land-Use Management.” Urban Land 32.

Checkland, Peter. 1981. Systems Thinking, Systems Practice. John Wiley & Sons.

Chesterfield Township. 1997. Chesterfield Township 1997Master Plan. Trenton, NJ:
Chesterfield Township.

Cook, Edward and Hubert van Lier. 1994. “Landscape Planing and Ecological Networks: An
Introduction.” In Landscape Planning and Ecological Networks, eds. E.A. Cook and H.N
Van Lier. New York: Elsevier.

Cortes, Dean. 1998 Presentation at the Michigan State Land Use Forum entitled Property Rights.

Costanza, R., F Sklar and M. White. 1990. Modeling Coastal Landscape Dynamics. BioScience,
vol. 40, #2.

Costonis. 1972. “Formula Found to Preserve the Past.” Planning. December.

. 1974. Space Adrift: Landmark Preservation and the Marketplace. Charnpaign, IL:
University of Illinois Press.

Coughlin, Robert E. 1981. ‘The Transfer Of Development Rights: Buckingham Township and
other Experiences.” Discussion Paper in National Agricultural Lands Study: Case Studies on
State and Local Programs to Protect Farmland. Amherst, MA: Regional Science Research
Institute.

Criss, Jeremy 1997. Interview August 1997
Dale, V., O’Neill, R., Pedlowski, M. and Southworth, F. 1993. Causes and Effects of Land Use
Change in Central Rondonia, Brazil. Photogrammetric Engineering and Remote Sensing,

59(6).

Daniels, Tom and Deborah Bowers. 1997. Holding Our Ground. Washington DC: Island Press.
Bibliography

 

398

Daniels, Tom. 1991. “The Purchase of Development Rights: Preserving Agricultural Land and
Open Space”. APA Journal. Autumn.

Dansereau, P. 1957. Biogeography: An Ecological Perspective. New York: Ronald Press.

Davidson, Donald A. 1992. The Evaluation of Land Resources. Essex England: Longman
Scientific and Technical.

Degrove, John M. 1996. Presentation at Michigan State Land Use Forum entitled State Growth
Management Systems that Integrate and Coordinate Land Use Planning.

Department of Natural Resources. 1988. Wetland Protection Guidebook. Michigan Department
Of Natural Resources.

Downs, Anthony. 1996. Presentation at Michigan State Land Use Forum entitled Key Land Use
in Future Metropolitan Growth.

Dramstad, Wenche E., James D. Olson and Richard T.T. Forman. 1996. Landscape Ecology
Principles in Landscape Architecture and Land- Use Planning. Washington DC: Island
Press.

Eckbo, G. 1975. The Landscape We See. New York: McGraw-Hill.

Edington, John M. and M. Ann Edington. 1977. Ecology and Environmental Planning. London:
Chapman and Hall.

Fabos, Gy. Julius. 1979. Planning the Total Landscape: A Guide to Intelligent Land Use.
Boulder, Co.: Westview Press.

Fabos, Gy. Julius. 1985. Land-Use Planning: From Global to Local Change. New York:
Chapman and Hall.

Foglesong, Richard E. 1986. Planning the Capitalist City: The Colonial Era to the 1920s.
Princeton, NJ: Princeton University Press.

Fluharty, Marlene. 1997. Presentation at Michigan State Land Use Forum entitled Physical
Impacts of Sprawl .

Foin, TC. 1976. Ecological Systems and the Environment. Boston: Houghton Mifflin.

Forman, Richard T.T and Michel Godron. 1986. Landscape Ecology. New York: John Wiley &
Sons.

Forman, Richard T.T. 1995. Land Mosaics: The Ecology of Landscapes and Regions.
Cambridge: Cambridge University Press.

Fridgen, Cynthia. 1996. Lecture on Sustainable Development, MSU, Department of Resource
Development.

Bibliography

399

Gans, Ellis. 1975. “Economic Effects of a TDR System: Marin County, California”.
Transferable Development Rights. Flaming Advisory Service Report #304. Chicago: APA.

Geddes, Patrick. 1915. Cities of Evolution. London: Ernest Bonn Ltd.
Golley, F. 1987. “Introducing Landscape Ecology”. Landscape Ecology, vol.l #1.

Gottsegen, Amanda Jones. 1992. Planning for Transfer of Development Rights: A handbook for
New Jersey Municipalities. Burlington County, NJ: Burlington County Board of Chosen
Freeholders.

Hagman, Donald G. and Julian Conrad Juergensmeyer. 1986. Urban Planning and Land
Development Control Law. St. Paul MN: West Publishing CO.

Hansson, L. and P. Angelstam. 1991. “Landscape Ecology as a Theoretical Basis for Nature
Conservation.” Landscape Ecology. Vol. 5.

Harris, Marshall. 1953. Origin of Land Tenure System in the United States. The Iowa St. College
Press, Ames, Iowa.

Heeter, David G. 1975. “Six Basic Requirements for a TDR System.” Transferable Development
Rights. Planning Advisory Service Report #304. Chicago: APA.

Heiberg, Dana E. 1991. “ The Reality of TDR” Urban Land. September.

Hembroff, Larry A. 1995. “Land Use Views and Priorities of Michigan Residents: Results of
the Trend Future Surveys, 1994-1995”. Planning and Zoning News. Lansing MI: Planning
and Zoning Center.

Hills, G. Angus. 1961. The Ecological Basis of Land Use Planning. Research Report 46,
Toronto: Ontario Department of Lands and Forests.

Hills, G. Angus. 1976. An integrated iterative holistic approach to ecosystem classification. In
Procedings of the First Meeting of the Canadian Commission on Ecological Land
C Iassification. Petawawa, Ontario.

Hite, James. 1979. Room and Situation: The Political Economy of Land Use Policy. Chicago:
Nelson-Hall.

Hosford, Karl Reynold. 1978. Evolution of the Organizational Structuring and [and Resource
Responsibilities of the Department of Natural Resources in Michigan 1 785-1978. Michigan
State University, East Lansing, MI.

Houghton, RA. 1994 The World Wide Extent of Land-Use Change. Bioscience 44(5).

Howard, Ebenezer. 1965. Garden Cities of T o-Morrow, Cambridge MA: MIT Press.

Jacobs, Jane. 1961. The Death and Life of Great American Cites. New York: Random House.

Kelly, Eric Damian. 1998. Presentation at Michigan State Land Use Forum entitled 0n the
Urban Fringe: Land Use Change in Michigan.

Bibliography

400

Kettman, Jacqueline. Thurston County Planning. Phone Interview August 1997 and February
1998.

Koches, John. 1997. Presentation to North Kent Township Association February Meeting.

Koches, John and Amy Toering. 1996. A Kent County 2020 Project Report: A Study of Land
Use Change, Kent County, Michigan. Allendale, MI: Grand Valley State University, Water
Resources Institute.

Landis, John D. 1995. “Imagining Land Use Futures”. J. of the American Planning Association,
v. 61, #4.

Leopold, Luna. 1974. Water: A Primer. San Francisco: W.H. Freeman and Co.

Lewis, PF. 1983. “The Galactic Metropolis”. In Beyond the Urban Fringe. Ed. RH. Flat and
G. Macinko. Minneapolis: University of Minnesota Press.

Lillesand, Thomas M. and Kiefer, Ralph W. 1996. Remote Sensing and Image Interpretation.
John Wiley and Sons, New York.

Lloyd, Gerald. 1961. Transferable Density in connection with Zoning. Technical bulletin #40.
Washington DC: Urban Land Institute.

Locke, John 1690. The Second Treatise of Government, ed. Thomas P. Pearddon (New York:
Bobbs-Merrill Col, Inc., 1952), Chapter 5, “Of Property.”

Lovejoy, Derek. Ed. 1979. Land Use and Landscape Planning. Glasgow: Leonard Hill.
Lovelock, J .E. 1980. Gaia: A New Look at Life on Earth. New York: Oxford University Press.
Lowry, Ira S. 1964. A Model of Metropolis, RM-4035-RC. Santa Monica: Rand Corporation.

Lucas, P.H.C. 1992. Protected Landscapes: A Guide for Policy Makers and Planners. London:
Chapman and Hall.

Lyle, John Tillman. 1985. Design for Human Ecosystems. New York: Van Nostrand Reinhold
CO.

Lynch, Kevin. 1960. Image of the City. Cambridge: MIT Press.

Maabs-Zeno, Carl C. 1981. “Design of Programs using Transferable Development Rights to
Preserve Farmland in the Northeast.” Journal of the Northeastern Agricultural Economics
Council, #10, v.2.

MacKaye, Benton. 1962. The New Exploration: A Philosophy of Regional Planning. Urbana,
Illinois: University of Illinois Press.

Mandelker, Daniel R. and Roger A. Cunningham. 1990. Planning and Control Of Land
Development. Charlottesville, VA: The Michie CO.

Manheim Township. 1995. Manheim Township 1995 Comprehensive Plan.
Bibliography

401

Manheim Township. 1990. October/November/December Newsletter.

Marsh, William. 1989. “Water Quality, Stormwater Management, and Development Planning on
the Urban Fringe”. J. of Urban and Contemporary Law. Vol. 35.

Marshall, Catherine and Gretchen B. Rossman. 1989. Designing Qualitative Research.
Newbury Park, CA: Sage.

Maryland-National Capital Park & Planning Commission. 1980. Preservation of Agriculture &
Rural Open Space Functional Master Plan. MNCPPC: Silver Spring, MD.

Maryland-National Capital Park & Planning Commission. 1992. The Transferable Development
Rights Program for the Preservation of Agriculture and Open Space July 1992 Status Report.
MNCPPC: Silver Spring, MD.

Maryland-National Capital Park & Planning Commission. 1997. Draft: The Transferable
Development Rights Program 1997 Status Report. MNCPPC: Silver Spring, MD.

Mayer, David N. 1994. The Constitutional Thought of Thomas Jefferson. Charlottesville:
University Press of Virginia.

McHarg, Ian. 1969. Design with Nature. Garden City, New York: Natural History Press.

Medley, K., Okey, B.W., Barrett, G.W., Lucas, MR, and Renwick, W.H. 1995. Landscape
Change with Agricultural Intensification in a Rural Watershed, Southwestern Ohio, USA.
Landscape Ecology 10(3).

Meyer, William B. and Turner, BL. 1994. Changes in Land Use and Land Cover: A global
perspective. Cambidge: University Press.

Michigan Department Of Natural Resources. 1995. Saginaw Bay Watershed Restoration
Prioritization Process.

Michigan Department of Natural Resources. 1993. Historical Wetlands of the Saginaw Bay
Watershed. Michigan Natural Features Inventory Program.

Michigan Department of Natural Resources. 1992. Michigan Relative Risk Analysis Project.
Lansing, MI: State of Michigan.

Michigan Farmland and Agricultural Development Task Force. 1994. Policy Recommendations
and Options for the Future of Michigan Agriculture. Lansing, MI: State of Michigan.
December.

Michigan Society Of Planning Officials. 1995. Institutional Structure for Land Use Decision
Making in Michigan. Working Paper. Lansing MI: Planning and Zoning Center.

Michigan United Conservation Commission. 1993. Saginaw Bay Watershed Land Use & Zoning
Study. , Lansing, MI: Planning and Zoning Center.

Bibliography

402
Miles, Mathew B. and A. Michael Huberman. 1984. Qualitative Data Analysis: A Sourcebook of
New Methods. Newbury Park, CA: Sage.

Montgomery County Executive Regulation on Agricultural Land Preservation Districts and
Easement Purchases, Regulation Number 66-91.

Moore, Audrey. 1975. “As a Primary System of Land Use Regulation: The Fairfax County
Virginia Proposal.” in Rose, Jerome G. ed. The Transfer of Development Rights: A New
Technique of Land Use Regulation. New Brunswick, NJ: Center for Urban Policy Research,
Rutgers University.

Mumford, Lewis. 1956. “The National History of Urbanization.” In Man’s Role in Changing the
Face of the Earth. William L. Thomas ed. Chicago: University of Chicago Press.

. 1961. The City in History: Its Origins, Its Transformation and Its Prospects. New York:
Harcourt, Brace and World.

Naveh, Z. and AS. Lieberman. 1984. Landscape Ecology: Theory and Application. New York:
Springer Verlag.

Nelson, Arthur C. 1992. "Elements of Effective State Land Use Planning Policy." Journal of
Urban Planning and Development, vol. 118, #3

Norris, Patricia. 1997. Presentation to Washtenaw Agricultural lands Task Force.
Odum, ER 1969. “The Strategy of Ecosystem Development.” Science. 164, April 18.

Olson, James M. 1996 “Calming the Storm of Regulatory Takings Law: Local Land Use and
Environmental Regulations after Lucas and Nordhouse.” Planning and Zoning News.
Lansing MI: Planning and Zoning Center.

O’Neill, R.V., D.L. DeAngelis, J.B. Waide and T.F.H. Allen. 1986. A Hierarchical Concept of
Ecosystems. Princeton: Princeton University Press.

Pijanowski, B.C., Machemer, T., Gage, Sand Long, D. 1996. A Spatially Explicit Land Use
Change Model: A conceptual and analytic framework. In Reveiw: Ecological Modeling.

Pizor, Peter J. 1986. “Making TDR Work: A Study of Program Implementation.” APA Journal.
Spring.

. 1978. “A Review of Transfer of Development Rights”. Appraisal Journal 46.

Poore, D. and Poore, J. 1987. “Protecting Landscapes: The UK. Experience,” Summary
Proceedings on an International Symposium on Protected Landscapes. Lake District, U.K.

Redman/Johnson Associates. 1994. Transfer of Development Rights Feasibility Study. Prepared
for Thurston County Regional Planning Council. May.

Richards, J. 1990. Land Transformation. In: Earth as Transformed by Human Action: Global
and regional changes in the biosphere over the past 300 years, B.L. Turner eds. Cambridge
University Press with Clark University Press.

Bibliography

 

403

Roddewig, Richard J. and Cheryl A. Inghram. 1987. Transferable Development Rights: T DRs
and the Real Estate Marketplace. Planning Advisory Service Report #401. Chicago: APA.

Rory, Martin J. 1975. “Encouraging Redevelopment through a TDR System: Georgetown
Waterfront, DC.” Transferable Development Rights. Planning Advisory Service Report
#304. Chicago: APA.

Rose, Jerome G. 1975. “British and Recent American Precedents: A proposal for the separation

and marketability Of development rights as a technique to preserve open space.” in Rose,
Jerome G. ed. The Transfer of Development Rights: A New Technique of Land Use
Regulation. New Brunswick, NJ: Center for Urban Policy Research, Rutgers University.

Rustem, William. 1996. Presentation at Michigan State Land Use Forum entitled Land Issues
and Policies in Michigan.

. 1997. Presentation at Michigan State Land Use Forum.

Ruzicka, Milan and Miklos Ladislav. 1982. “Examples of Simplified Method of Landscape-
Ecological Plannng (LANDEP) of Settlement Formation”. Ekologia. Vol. 1 #4.

. 1982. “Methodology of ecological landscape evaluation for optimal development of
territory”. In Perspectives in Landscape Ecology. Ed. S.P. Tjallingi and AA. de Veer, Pudoc,
Wageningen.

. 1990. “Basic premises and methods in landscape ecological planning and optimization.”
In 1.8. Zonneveld and R.T.T. Forman eds. Changing Landscapes: An Ecological Perspective.
New York: Springer-Verlag.

Salter, Leonard. 1948. Ch.2 “The Development Of Rural Land Economics in the United States.”
A Critical Review of Research in Land Resource Economics. University Of Wisconsin Press,
Madison, WI.

Sauer, CO. 1963. The morphology Of landscape. In Leighty, J ., ed., Land and Life: A Selection
from writings of Carl Ortura Sauer. Berkeley: University of California Press.

Schiff, Stanley D. Real World Experience with TDRs — An Update. Warrenton, VA: Peidmont
Environmental Council.

Schultink, Gerhardus and Richard van Vliet. 1997. Wetland Identification and Protection: North
American and European Policy Perspectives. Research Report #554. E. Lansing: Michigan
Agricultural Experiment Station, MSU.

Schultink, G. 1992. “Integrated Remote Sensing, Spatial Information Systems and Applied
Models in Resource Assessment, Economic Development and Policy Analysis”.
Photogrammetric Engineering and Remote Sensing. Vol. 58, #8.

. 1992. “Evaluation of Sustainable Development Alternatives: Relevant Concepts,

Resource Assessment Approaches and Comparative Spatial Indicators”. Intern. J
Environmental Studies. Vol. 41.

Bibliography

404
Scio Township. 1996. Executive Summary of Cost of Community Services Study.

Siemon, Larsen and Marsh. 1996. Transferable Development Rights Report: Analysis of Issues
and Opportunties and the Application of Transferable Development Rights Technique.
Prepared for Lexington Fayette Urban County Government. April.

Skjaerlund, David. 1997. Presentation at Farmland Preservation Workshop at Saginaw Valley
State University. Sponsored by the Farm Bureau.

Spim, AW. 1984. The Granite Garden: Urban Nature and Human Design. New York: Basic
Books.

Stake, Robert E. 1995. The Art of Case Study Research. Thousand Oaks, CA: Sage.
Steiner, Frederick. 1990.

. 1991. The Living Landscape: An Ecological Approach to Landscape Planning. New
York: McGraw Hill.

Steinitz, C. 1979. “Simulating Altemative Policies for lrnplementing the Massachusetts Scenic
and Recretional Rivers Act: The North River Demonstration Project ” Landscape Planning.
6.

Stokes, John. 1997. Interview August 1997

Teilhard de Chardin, P. 1966. Man ’s Place in Nature. London: Collings.

Thurston County, WA. 1996. Transfer of Development Rights Program Information Kit.
Troll, C. 1939. Luftbildplan und Okologische Bodenforschung. Z. Ges Erdkunde.

Troll, 1971. G. 1971. “Landscape ecology (gee-ecology) and bio-cecnology - a terminology
study.” Geoforum 8.

Turner, B.L., RH. Moss and D.L. Stole, eds. 1993. Relating land use and global land cover
change: A proposal for an IGBP-HDP core project. Report fi'om the IGBP-HDP Working
Group on Land Use/Land Cover Change. Joint publication of the International Geosphere-
Biosphere Programme (Report #24) and the Human Dimensions of Global Environmental
Change Programme (Report #5). Stockholm: Royal Swedish Academy of Sciences.

Turner, MG. 1989. Landscape Changes in Nine Rural Counties in Georgia. Photogrammetric
Engineering and Remote Sensing, 56 (3).

Turner, M.G., ed. 1987. Landscape Heterogeneity and Disturbance. New York: Springer-
Verlag.

Turner, MG. and RH. Gardner, eds. 1991. Qualitative Methods in Landscape Ecology: The
Analysis and Interpretation of Landscape Heterogeneity. New York: Springer-Verlag.

Tustian, Richard E. 1983. “Preserving Farming through Transferable Development Rights: A
case study of Montogmery County, Maryland.” American Land Forum. Summer.

Bibliography

405

van den Brink, Adri. 1997. “Land Use Planning in the United States.” Planning and Zoning
News. June

Van Langevelde, Frank. 1994. “Conceptual Integration of Landscape Planning and Landscape
Ecology,with a Focus on the Netherlands.” In Landscape Planning and Ecological Networks,
eds. E.A. Cook and H.N Van Lier. New York: Elsevier.

Vander Veen, Richard. 1996. Presentation to North Kent Township Association December
Meeting.

Vesterby, M. and Heimlich, R. 1991. Land Use and Demographic Change: Results from fast
growing counties. Land Economics. 67 (3).

Vink, A.P.A. 1980. Landschapsecologie en Landgebruik. Boh, Scheltema and Holkema,
Utrecht, Netherlands. (1983, translation Landscape Ecology and Land Use. London:
Longman.)

Vink, A.P.A. 1983. Landscape Ecology and Land Use. New York: Longman.

Vos, CC. and P. Opdam, eds. 1992. Landscape Ecology of a Stressed Environment. London:
Chapman and Hall.

Warbach, John and Mark A. Wyckoff. 1995. Growth Management Tools and Techniques.
Michigan Department Of Natural Resources.

Wenz, Peter S. 1988. Environmental Justice. State University of New York , Albany.

Wilder, MG. 1985. Site and Situation Determinations of Land Use Change: An empirical
example. Economic Geography 61.

Willis, Sidney. 1975. “New Jersey Proposal: Preserving Essential Open Space.” T ransferable
Development Rights. Planning Advisory Service Report #304. Chicago: APA.

Woebse, H.H. 1975. Landschaflsokologie und Landschaftplanung. RB. Verlag, Graz.

Wyckoff Mark A. 1997. “Michigan’s Trend Future Review.” An Overview of the Land Use
Decision Making Process in Michigan. January 14, 1997 Presentation at the Kellogg Center,
MSU.

Wyckoff , Mark A. 1995 Institutional Structure for Land Use Decision Making in Mchigan
Working Paper. Planning and Zoning Center, Inc., Lansing.

Yin, R. 1994. Case Study Research: Design and Methods. Newbury Park, CA: Sage.

Yonguan Yin, Pierce, J. 1993. Integrated Resource Assessment and Sustainable Land Use.
Environmental Management, vol. 17, #3.

Zonneveld, 1.8. and Richard T.T. Forman. 1990. Changing Landscapes: An Ecological
Perspective. New York: Springer-Verlag.

Bibliography

 

406

Zonneveld, IS. 1979. Land Evaluation and Landscape Science. Enschede, The Netherlands:
International Training Center.

. 1988. “Landscape Ecology and Its Application.” In Landscape Ecology and
Management: Procedings of the First Symposium of the Canadian Society of Landscape
Ecology and Management, University of Guelph, May 1987. Ed. By Michael Moss.
Montreal: Polyscience Publication Inc.

. 1994. “Landscape Ecology and Ecological Networks.” In Landscape Planning and
Ecological Networks, eds. E.A. Cook and H.N Van Lier. New York: Elsevier.

Zube, E.H., RO. Brush, and J .G. Fabos, eds. 1975. Landscape Assessment: Values, Perception
and Resources. Stroudsberg, Pennsylvania: Dowden, Hutchinson, and Ross.

Bibliography