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This is to certify that the
thesis entitled

WHERE IS TDR WORKING AND HOW WOULD WE KNOW:
RESULTS FROM A NATIONWIDE STUDY OF TDR PROGRAM
COMPONENTS AND OUTCOMES

presented by

Matthew Henson Brinkley

has been accepted towards fulﬁllment
of the requirements for the

Masters degree in Urban and Regional Planning__

 

 

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WHERE IS TDR WORKING AND HOW WOULD WE KNOW:
RESULTS FROM A NATIONWIDE STUDY OF TDR PROGRAM COMPONENTS
AND OUTCOMES

By

Matthew Henson Brinkley

A THESIS

Submitted to
Michigan State University
in partial fulfillment of the requirements
for the degree of
MASTER OF SCIENCE
DEPARTMENT OF URBAN AND REGIONAL PLANNING

2007

ABSTRACT

WHERE IS TDR WORKING AND HOW WOULD WE KNOW:
RESULTS FROM A NATIONWIDE STUDY OF TDR PROGRAM COMPONENTS
AND OUTCOMES

By

Matthew Henson Brinkley

Although transfer of development rights or transferable development rights (or TDR as it
will be referred to throughout this study) was developed nearly 40 years ago, it has
recently become a topic of greater interest among planners, members of the development
and conservation communities, citizens, and scholars. As many as 181 TDR programs
may exist in some sense as laws or regulations that have been formally adopted by
legislative and administrative entities, but the program features and performance of many
them remain largely unknown. Relatively few comprehensive, empirical investigations
of TDR have ever been conducted. Current empirical research has had much to say about
individual programs and very small samples of individual programs, and little to say
about the performance and viability of TDR in a broader sense. Based primarily on data
from recent interviews with program administrators representing TDR programs from
across the United States, this study establishes several indicators for measuring TDR
program performance and analyzes core TDR program factors including mandatory
versus voluntary programs; programs with TDR banks; public involvement in
implementing TDR; programmatic goals of TDR programs. Implications for further

research and policy are discussed.

Copyright by
Matthew Henson Brinkley
2007

ACKNOWLEDGEMENTS

I wish to thank the members of my committee for their advice and guidance, and in
particular my committee chair, Dr. Patricia Machemer. Her encouragement and insight
has been constant; without it this paper simply would not have been a thesis. Dr. Peilei
Fan was gracious enough to undertake the responsibilities of reading this paper on short
notice, and 1 am grateful for her commitment to this endeavor and the many useful
comments she provided. I would like to thank Dr. Mark Wilson for his participation in
this project, and for his support of my academic pursuits as an MURP graduate student at
Michigan State University. Finally, I would like to thank Dr. Michael Kaplowitz for
reading this paper and supporting the work that lies at its foundation.

I would like to thank all of the participants in the 2007 survey of TDR programs who
took the time answer questions. I would especially like to acknowledge those who
provided more than was required. Juan Du from CStat at Michigan State University
provided excellent advice concerning the statistical methods used in this research.

Most importantly, I would like to thank my family. My parents, Dr. Ellen Brinkley
and Paul Brinkley, have been unwavering in their support of my choice to pursue a
graduate degree. For this, their unconditional love, and so much else, they have my
deepest gratitude. And of course I must thank the one person who has by my side
through this entire journey: for perseverance and faith in what has seemed at times
improbable, for love and encouragement, and for doing the dishes much more often than
she should have had to, a most heartfelt and affectionate THANK YOU is exclusively

reserved for Nikki.

iv

TABLE OF CONTENTS

 

 

 

 

 

 

LIST OF TABLES ................ -- - ...... - - - ---vii
LIST OF FIGURES __ - - - - - ..... - viii
1 INTRODUCTION ..... - -- - l
1.] HISTORY ................................................................................................................ I
1.2 PROGRAM COMPONENTS ....................................................................................... 6
Sending areas ....................................................................................................... 6
Receiving areas .................................................................................................... 7

TDR transactions .................................................................................................. 9
Mandatory vs. voluntary programs .................................................................... 10

TDR banks .......................................................................................................... 12

1.3 THEORETICAL ASPECTS ....................................................................................... 13
Challenges to TDR ............................................................................................. 14

1.4 CONCLUSION ....................................................................................................... 17

2 MEASURING SUCCESS ......... - - -- -- - 20
2.1 EVALUATING GROWTH MANAGEMENT ................................................................ 20
2.2 EVALUATING TDR .............................................................................................. 26
Case studies ........................................................................................................ 27

2.3 CONCLUSION ....................................................................................................... 36

3 METHODS - - -- - 38
3.1 RESEARCH OVERVIEW ......................................................................................... 38
3.2 SURVEY INSTRUMENT ......................................................................................... 41
3.3 STATISTICAL ANALYSIS ...................................................................................... 43

4 FINDINGS 44
4.1 RESPONSE RATE .................................................................................................. 44
4.2 INDICATORS OF SUCCESS ..................................................................................... 44
Number of transfers and transactions ................................................................ 44

Assets preserved ................................................................................................. 45
Diﬁ‘erences between local and county administration ....................................... 47
Normalizing acres preserved ............................................................................. 4 7
Normalized by sending area ............................................................................... 48
Normalized by total land .................................................................................... 49
Program administrator opinion ......................................................................... 50

Level ................................................................................................................... 51

 

 

 

Mandatory vs. volimtarv .................................................................................... 52

Total land area ................................................................................................... 53
Purchase of development rights ......................................................................... 53

TDR bank ............................................................................................................ 54

Number of initiators ........................................................................................... 54
Programmatic goals ........................................................................................... 54

5 DISCUSSION - - -- - -- ..... . 57
5.1 HOW IS TDR SUCCESS BEST MEASURED? ............................................................ 57
Percentage of total [and area preserved ............................................................ 59
Percentage of sending area preserved ............................................................... 61
Program administrator opinion ......................................................................... 63

5.2 WHAT MAKES A PROGRAM SUCCESSFUL? ............................................................ 65
Level ................................................................................................................... 65
Mandatory vs. voluntary .................................................................................... 67
Purchase of Development Rights ....................................................................... 68

TDR bank ............................................................................................................ 70

Number of initiators ........................................................................................... 72

Age of program ................................................................................................... 73

6 CONCLUSIONS - - -74
6.1 KEY FINDINGS ..................................................................................................... 75
What deﬁnes TDR success? ................................................................................ 75

What makes a program successful? ................................................................... 76

6.3 POLICY IMPLICATIONS ......................................................................................... 78
6.4 FURTHER RESEARCH ........................................................................................... 79
Limitations of this study ..................................................................................... 79
Leadership and institutional capacity ................................................................ 79
Comparisons with other techniques ................................................................... 80

6.5 PRESERVING TDR ............................................................................................... 80
APPENDIX -- 82
WORKS CITED 95

 

Vi

LIST OF TABLES

TABLE 1: MINIMUM RESPONSE RATE ................................................................................. 44

Vii

LIST OF FIGURES

FIGURE 1: HISTOGRAM SHOWING DISTRIBUTION OF ACRES PRESERVED BY TDR ............... 46

FIGURE 2: HISTOGRAM SHOWING DISTRIBUTION OF ACRES PRESERVED EXPRESSED As
PERCENTAGES OF SENDING AREAS. ............................................................................. 48

FIGURE 3: HISTOGRAM SHOWING THE DISTRIBUTION OF ACRES PRESERVED EXPRESSED As
PERCENTAGES OF THE TOTAL LAND MASS ................................................................... 49

FIGURE 4: SCATIERPLOT OF TOTAL LAND AREATO PERCENTAGES OF TOTAL LAND AREA
PRESERVED BY TDR ................................................................................................... 61

viii

1 Introduction
This chapter describes the historical development of TDR as a technique for land

preservation and other urban and regional planning objectives. Key components of TDR
programs are identified and deﬁned, and issues related to these components are discussed
in general terms. The author introduces theoretical concepts related to TDR, and

concludes with a brief discussion of the current state of the TDR programs.

1.1 History
Although transfer of development rights or transferable development rights (or TDR

as it will be referred to throughout this study) was developed nearly 40 years ago, it has
recently become a topic of greater interest among planners, members of the development
and conservation communities, citizens, and scholars.

Johnson and Madison (1997) suggest that some of the recent interest in TDR
emanates from recent legal decisions and a political environment that are increasingly
hostile toward land use regulations that adversely affect property values of regulated
lands. In a legal environment where courts are more likely to uphold the primacy of
private property rights over land use regulation that serve the public interest, local
governments have a tremendous incentive to ﬁnd policy solutions that “make such
noncompensable regulations partly or wholly compensable” (p. 365). For local
governments concerned with avoiding takings claims, and protecting the equity of
landowners while preserving an array of public amenities, TDR would seem an attractive
approach to resolving conﬂicts between these goals. Indeed, anecdotal evidence and
limited empirical research suggest that TDR can avoid “complete wipeouts” of land
values for owners of regulated lands (Beaton 1991), and case studies of a limited number
of venerated TDR programs document impressive gains made in the preservation of

agricultural and environmentally significant/sensitive land.

The recent increase in the number of programs Should not be interpreted as an
acknowledgement of the practice’s ascendancy, but as an acknowledgement of its appeal
relative to other programs and their deficiencies. TDR is not always seen as a perfect
solution to the many dilemmas involved in protecting land from development, but as the
only alternative to approaches that may be untenable. Pizor (1986) summarizes common
motivations for implementing TDR in a 1986 study of TDR in Montgomery County,
Maryland and the New Jersey Pinelands: purchase of development rights or fee interest
can be too expensive, and restrictive downzoning can be unfair to landowners. More than
merely relieving property owners of regulatory burden and ensuing lost economic value,
some of the appeal surrounding TDR lies in the perception that it can transform such
conditions into opportunities for progress. Barrese (I983) avers that TDR and similar
programs have become more popular due to the belief that changes in land values
affected by regulation can be used to “achieve positive goals” (p. 235).

Originally designed to compensate landowners who were restricted from
redeveloping historically Signiﬁcant sites in New York City, TDR programs have evolved
to address different development issues in very different development contexts (Pruetz
2007 and 2003; American Farmland Trust, 2001; Johnston and Madison, 1997). Pruetz
(2007) identifies 5 distinct areas where TDR is currently used: environmental protection,
farmland preservation, historic preservation, community revitalization, and economic
development. While some of these goal areas overlap in some programs (Montgomery
County’s agricultural preservation program is housed within the economic development

division), they do describe distinct sets of goals commonly found among TDR programs.

From the most urbanized and densely populated regions in the United States, TDR
has been reinterpreted to meet the needs of rural and urban communities throughout the
United States. As more rural communities face increasing development pressures and
existing natural and working landscapes become ever more threatened by urbanization,
the search for innovative land management techniques has led many of them to TDR.
Brabec and Smith (2002) included TDR in a set of “three dominant” land use tools used
to preserve agricultural land. Scanning recent studies, it becomes apparent that many of
greatest TDR successes have been achieved in the context of agricultural preservation in
rural and developing communities (McConnell, Kopits, and Walls 2003; Kopits,
McConnell and Walls 2005; Brabec and Smith 2002; Machemer and Kaplowitz 2003;
American Farmland Trust, 2001). McConnell and Walls (2007) suggest that although
TDR can theoretically be used to achieve a variety of goals, throughout much of its
history TDR has primarily been used to protect agricultural land and open space.

This may be changing for many rural communities on the urban fringe. Pruetz (2003)
identiﬁed a growing number of programs devoted not only to the preservation of
agricultural land and open space, but to the protection of environmentally sensitive and
unique lands. Even programs that were originally designed as farmland preservation
strategies have grown to include environmental concerns that are unrelated to original
program goals. Even programs that have not yet directly espoused environmental goals
may be capable of addressing land use related issues. Walls et a]. (2004) consider the
effects of land use patterns and market-based land use policies on the pollution in the
Chesapeake Bay. Comparing purchase of development rights (PDR), TDR, and

development impact fees the researchers conclude that TDR could be used to reduce

pollution by reducing the amount of land surrounding the Chesapeake Bay that might
otherwise be converted to higher intensity urban uses. With such ﬂexibility, it would
seem that TDR can be adapted to address any number of land use challenges.
Development rights markets have not only evolved to address new landscapes, they
have also been used to redeﬁne how communities are planned. Ezio (2002) investigated
the use of development rights approaches in land use planning in Italy. Municipalities
there have used development rights markets to address extemalities in much the same
way that governments around the world have experimented (somewhat successfully) with
external markets to protect the environment. In describing the procedures through which
development rights are created and marketed, it becomes apparent that development
rights markets in Italy play a role that is more central to land use planning than in the
United States where TDR is often grafted onto existing regulations and comprehensive
land use plans. To begin with, the development rights trading schemes discussed in this
study are usually not concerned with protecting a particular class of land use. Rather,
they are concerned more with improving the allocation of land for various uses. While
the difference between this and the understanding of transferable development rights
common in the United States may seem merely a matter of degree, the distinction goes
further: the development rights markets in Italy are used as a tool for comprehensive
planning and not just as tools that supplement regulatory approaches and/or correct
inequalities caused by them. The goal of this system is to ensure an allocation of rights
such that the legal classification of land coincides with its economic attributes, and costs
and beneﬁts of land use planning and regulation are shared throughout a community

between private and public parties. TDR in the United States is often an ancillary

technique used to achieve relatively narrow objectives. In Italy property rights markets
compensates landowners so that public land use planning may take place in a coherent,
comprehensive, non—ad hoe manner. The idea is not merely to secure a certain outcome
for one classiﬁcation of land (for example preserving agricultural land on the urban
fringe) but to obtain equitable outcomes across land uses and throughout the geographic
extent of a given regulatory regime or unit of government. So protecting open space on
the urban fringe by assembling land for a “green belt” is not only a means to preserve
open space, but also a part of an effort to redevelop existing urban land that has fallen
into disuse or obsolescence. In the United States, TDR is seldom designed or conceived
of as a comprehensive planning tool that addresses urban and rural land use issues
simultaneously. Though it is beyond the scope of the research presented here, anecdotal
evidence gleaned from interviewing administrators of TDR programs across the United
States suggests that TDR needs to be understood in a more wholistic manner—as an
instrument of land use policy capable of addressing the challenges of disparate urban and
rural landscapes and an instrument that can be more effective when it is used in such a
way.

Although the practice was first implemented in New York City in 1968, the number
of TDR programs operating in urban areas today is relatively small when compared
alongside the number programs attempting to preserve agricultural and environmentally
sensitive lands, natural resources, and open space. As discussed in greater detail below,
many urban TDR programs continue to focus on the preservation of historical resources.
But several urban programs have found new applications for development rights. Such is

the case for Clearwater, Florida where TDR has been applied to achieve economic

development goals, and Portland Oregon where TDR works to incentivize practices like
preservation of urban open space and the preservation of historic structures.
1.2 Program components

TDR has been used in different communities for many different purposes, and the
means by which these programs have been implemented varies accordingly. Several
researchers have suggested that such variability is evidence of the ﬂexibility of TDR as a
land use tool (Pruetz 2003). Research has nevertheless been interested to identify
practices common to development rights and similar programs—particularly the practices
and programmatic characteristics that make some programs succeed and others fail. The

following presents a general discussion of components common to many programs.

Sending areas
As discussed above, most TDR programs work to preserve or protect land or some

other spatially deﬁned resource (e.g. an historically significant building). These
resources are often deﬁned spatially as occupying or being located in a geographic area
or zone known as a sending area. Development rights are removed from sending areas
and “sent” to receiving areas where they can be used. Once development rights are
removed, those rights can no longer be used in the sending area and the land or building
from they were removed can no longer be developed as it might have been before the
transfer.

Different programs do operate in different ways and in very different geographic and
policy contexts and the operation and the deﬁnition of sending areas can vary greatly.
Machemer and Kaplowitz (2002) observe that TDR can be designed to facilitate or direct

transfers of rights between (I) adjacent parcels, (2) within a designated district, (3) from

non-urban to urban areas within a jurisdiction, or (4) from non-urban to urban areas
within a region between jurisdictions. Despite these variations, transfers falling into the
last 2 categories are more prevalent precisely because most TDR programs address
environmental and other land conservation issues (p. 776).

Researchers argue that sending area characteristics and the way sending areas are
selected can inﬂuence program success. Pruetz (2007) suggests that sending areas I)
should not be in the direct path of development, 2) should have necessary urban
infrastructure in place, and 3) should be identiﬁed as preservation areas within a
comprehensive plan. Some TDR programs do not differentiate between sending and
receiving areas, allowing development rights to be transferred between parcels in
immediate proximity to one another, and between parcels with the same characteristics.
In one such case McConnell et al. (2003) find that the program has successfully
preserved agricultural land. In any case, finding viable sending areas can be difﬁcult in
communities where agricultural land has already become fragmented (American
Farmland Trust, 2001), and building support among sending area landowners is important
for program success (Pruetz, 2003; Machemer and Kaplowitz, 2002).

Receiving areas

Development rights “sent” from sending areas are used or converted into
development in receiving areas. Some researchers contend that effective siting of
receiving areas is even more important than the siting of sending areas because demand
for development rights emanates from receiving areas. At least one writer on the subject
contends that selecting viable receiving areas is the most difﬁcult aspect of designing a

TDR program (Tustian, 1983).

Demand for development in receiving areas makes the market for development rights
or in the words of Richard Tustian “the economic value of transferable development
rights is conditioned, not by Where they transfer from, but by where they transfer to” (p.
67). Reflecting on TDR successes in Montgomery County, Maryland, Pizor (1986)
argues that the ability or opportunity to achieve higher densities in receiving areas is “the
linchpin” of TDR (p. 209). Demand must exist for higher intensity/density development
(usually residential) and that intensity/density must be able to be accommodated
physically, socially, and politically.

Not all receiving areas are created equal, and some programs probably succeed
because demand in receiving areas achieves some kind of equilibrium with the supply of
development rights transferred from sending areas. Conversely, some programs likely
suffer from poorly selected or designed receiving areas that fail to generate demand for
development rights. The imbalance of supply and demand can cause development rights
markets and programs to fail (McConnell, 2003; Thorsnes and Simon, 1999; Barrese,
1983). Some of the root causes—anomalies in local real estate markets for instance—are
beyond the grasp of program administrators to correct through the alteration of program
features. But Pruetz (2007, 2003) emphasizes that program design, and in this case the
selection of receiving areas and the structuring of incentives, inﬂuences program success.
Among other things, Pruetz recommends that receiving areas be located close to existing
urban amenities and services; that baseline zoning remain (or become) low enough in
receiving areas for developers to benefit from the acquisition and use of development
rights; that means of circumventing TDR be removed. TDR Should be the only means of

adding density beyond that allowed by right at receiver sites. Finally, proﬁtability is a

factor that motivates both sellers and buyers of TDRS, and understanding market forces
that determine proﬁtability for both parties should be a priority for communities
implementing TDR. Finding a balance between the developers’ and landowners’ proﬁt
expectations can help communities derive transfer ratios that incentivize the purchase and

sale of development rights.

TDR transactions
As will be shown in much greater detail throughout this study, TDR has come to be

used in many different contexts, and programs have been fitted to unique circumstances
accordingly. In its most basic formulation, however, a TDR transaction proceeds as
follows:

1. A landowner severs the right to develop her land rather than selling the land
outright to a developer or land speculator. This action is recorded at some point
during the transaction and runs with the land into perpetuity—usually.

2. A party interested in developing land elsewhere purchases the severed
development right(s) and uses them to develop at greater density (in the case of
residential land uses) or intensity (in the case of commercial land uses) than
would otherwise have been possible given underlying land use restrictions.

3. The landowner retains ownership of her land and is free to sell it at a later time,
albeit With the newly acquired encumbrance that prevents any future owner from
developing the land in whatever manner is described by the restriction.

In this situation, TDR would appear to beneﬁt current landowners who get to “sell their
land twice”, land developers who are still able to develop, and the surrounding

community that enjoys the benefits achieved through conservation of a public amenity.

A farmer, for example, receives the financial benefit from selling development rights, and
is (usually) able to benefit from the sale of the land and any remaining economic value in
the land at a later time. The developer who purchases the development rights can use
them to develop land elsewhere, and all members of the community in which the
transaction takes place (including those who will come to live there in future) beneﬁt
from the preservation of prime agricultural land and the rural character of their
community.

It should be noted that transactions are seldom as Simple as that just presented.
Different institutions are often involved in transactions and those institutions often
function according to very different rules. As suggested in the ﬁndings presented below,
programs themselves vary widely in their structure and means by which they operate.
These factors introduce greater complexity to TDR transactions, which can appear
conceptually quite simple.

Mandatory vs. voluntary programs

The voluntary nature of participation in TDR is often praised as one of the aspects
TDR that makes it superior to conventional, regulatory techniques. TDR, for example,
provides relief in situations where restrictive, open space, cluster development or large
lot/agricultural downzoning alone would diminish the development potential and
consequent economic value of the affected land. In this case, TDR appears to make an
otherwise “mandatory” regulation more “voluntary” by providing an alternative to
suffering the economic effects of regulation. But TDR and zoning (restrictive and
otherwise) work in concert with one another. They are not two unrelated policies to be

compared but rather they are two techniques that together can constitute effective land

10

use management policy and need to be discussed accordingly. TDR does not salvage
equity by easing mandatory regulations that is placed on landowners through zoning.
Instead TDR (if it is implemented carefully) enhances mandatory approaches like zoning
by making it easier for stakeholders to “do the right thing” and work toward public
interests delineated in a community’s comprehensive plan and implemented through its
zoning, development, and subdivision codes.

TDR programs differ from one another in their degree of “voluntary-ness” or
“mandatory-ness.” Some programs are more voluntary and others more mandatory.
Where a particular programs fall on the continuum depends on how zoning and other
mandatory regulations are used in relation to the transfer of rights from land in sending
areas and the vesting and use of those rights in receiving areas. Programs do not force
landowners to sell development rights, but the development potential of a parcel may be
so constrained by regulatory restrictions and natural limitations that a landowner may feel
that She has no other choice but to sell the development rights from the land in order to
realize some economic return. A sending area may be downzoned from 1 dwelling
unit/acre to l dwelling/40 acres signiﬁcantly reducing development potential and
economic value. The sentiments of the effected landowner notwithstanding, a TDR
program may still be considered “voluntary” when it has not downzoned sending areas in
order to Strengthen incentives. When development disincentives are imposed or exist in
these areas the program becomes “mandatory” although participation in the program is
not mandatory per se.

The mandatory/voluntary dichotomy is also derived from the way receiving areas are

regulated. If density in receiving areas may only be increased through the use of TDR,

ll

the program can reasonably be described as mandatory. If, on the other hand, developers
in receiving areas are able to circumvent the use of TDR by adding density through
variances, special land use, rezoning or other administrative procedure, the program
cannot be described as mandatory. Of the two, sending areas are more often restrictively
regulated as a part of TDR implementation. Whether one or other, or both areas become
restrictively regulated does not ensure that the new regulations complement one another.
As Pruetz (2003) ﬁnds, some communities have difficulty achieving a balance that
generates incentives to development in receiving areas using development rights
transferred from sending areas.

Looking at three case studies, Machemer and Kaplowitz (2002) observe that
“mandatory” programs were more successful than “voluntary” ones. Of the three case
study areas, none promote their TDR programs as “mandatory” although all of them
engaged in some form of downzoning at some point during or prior to implementation of
their programs. For Tustian (1983), who was actually the director of planning for
Montgomery County, Maryland during the early years of that program, signiﬁcant
development restrictions on rural sending area land were essential for success.

TDR banks

TDR banks, Machemer and Kaplowitz reports, perform a variety of functions
including facilitating transactions, acting as a buyer of last resort, and strengthening
program credibility with banking institutions (p. 789). The highly successful
Montgomery County program used a TDR bank to facilitate transactions, matching

potential buyers and sellers. In the New Jersey Pinelands, two TDR banks play very

12

prominent roles in the administration, marketing, and implementation of the Pinelands
TDR program.

McConnell et al. (2006, 2003) find that government participation can be important for
successful TDR programs. In Calvert County, Maryland, the county began to act as a
conduit for accurate market information. Publicizing prices, transactions details, and
TDR availability helped to stabilize TDR prices as buyers and sellers were able to enter
the market with greater conﬁdence in the value of their investments (p. 642). The County
also began to buy and retire TDRS each year. Its announcement of the prices it will pay
for TDRS sends signals that further support market stability.

Discussing the highly successful Montgomery County, Maryland TDR program, both
Pizor (1986) and Tustian (1983) emphasize the beneﬁts of the TDR bank in that case.
For Tustian, a development rights or credits bank endows a TDR program with
institutional credibility: in programs where a bank acts as an intermediary in all
development rights transactions, buyers and sellers beneﬁt from consistency. Even in
programs where TDR banks may play a more peripheral role, buyers and sellers know
that the TDR bank can always act as buyer of last resort.

1.3 Theoretical aspects

Despite criticism that the technique is too complex to be embraced by developers and
landowners alike, TDR is conceptually quite simple. It allows communities to shift or
transfer development from places where development is less desired by a community to
places where development is more desirable (Pruetz 2003; AFT 2001). Like traditional
land management techniques such as zoning, and more innovative techniques like cluster

development, TDR programs are primarily concerned with locating different land uses in

13

a desirable spatial arrangement. By incentivizing certain development decisions, TDR
facilitates Shifts from one type of development or land use to another without completely
foregoing an alternative. Although landowners or developers may not be able to realize a
particular land use in a particular location, TDR allows these groups to realize
development or investment objectives in another location or to recoup equity that would
have been lost entirely. Because development carries its own costs, TDR allows
landowners to realize some of the potential development value of their land while
avoiding or reducing the costs of development (Pruetz 2007).

This contrasts starkly with traditional land use management techniques that use
regulations to restrict certain land uses in some locations while allowing those same land
uses in others. The difference being, zoning and similar land use controls do not
accommodate the alternative (be it an opportunity to develop elsewhere or receive
compensation) because they do not allow landowners or developers to transfer the
opportunity to develop from one location to another. Transferring development, rather
than outright prohibition or restriction, enables larger public interests (often preservation
of a community asset or amenity) to be served while protecting the vested rights of a land
owner to enjoy private property without undue interference by the state.

Challenges to TDR

Researchers have identified several theoretical ﬂaws that could undermine the
operation of transactions. McConnell et al. in a 2003 study of TDR in Calvert County,
Maryland address several theoretical concerns. They suggest that two potential problems
or economic inefficiencies can arise from this policy: 1) adverse selection can occur

when farms, which are not under immanent pressure to convert, are able to participate in

14

the TDR program thus creating a new cost to preserve agricultural land that would have
been “preserved” by market conditions favoring development in other parts of the county;
2) adverse selection can also create additional net development, then, as land that would
not have been developed generates new development rights that are used in other
locations (p.6).

Thin markets, another theoretical problem affecting the success of TDR programs,
arise when markets lack consistent pricing or when buyers or sellers wield monopsony
buying power over one another (McConnell et al., 2003). Under these circumstances,
transaction costs are artificially raised and “some mutually beneficial trades may not take
place” (p. 7). McConnell et al. suggest that TDR banks and direct government
intervention may help to correct these conditions by sending Stable pricing signals to
buyers and sellers and reducing the affect of the one-time nature of development
decisions.

Aside from theoretical problems with the operation of the system, scholars have
identified theoretical problems arising from the effects and outcomes of properly
functioning programs. Barrese (1983) assesses TDR for efﬁciency and equity, ﬁnding
that when land in sending and receiving areas is restricted, landowners do suffer
“wipeouts” (p. 236). Only landowners in sending areas are subsequently compensated
through TDR. Reaching Pareto optimality where losses to landowners in sending and
receiving areas can be recaptured or “internalized” as net beneﬁts is, according the
author, difﬁcult to justify theoretically. Barrese is also skeptical that TDR can distribute

benefits of preservation fairly. Landowners in sending areas may face eroding land

15

values after the imposition of restrictions, and other groups of losers and gainers are not
even addressed by TDR—yet their losses and gains are quite (theoretically) real.
Thorsnes and Simons (1999) assert that economists’ criticism that TDR fails to
efficiently allocate resources has been supported by the performance (or lack thereof) of
TDR programs, and they propose a theoretical alternative to “highly administered,
zoning—based TDR programs” (p. 257). In this system, development rights are
“equitably” distributed across landowners and the market, rather than any regulatory
scheme like zoning, is allowed to decide which land will be developed and which land
will be preserved. Such an approach is not altogether unlike that used in places like
Calvert County where development rights can be used to development the same rural,
agricultural lands that generate the development rights in the first place. But even
programs like this one function within a regulatory scheme that directs development and
preservation albeit to a lesser degree than other programs. No TDR program in the
United States operates as a purely “cap-and-trade” system akin to various emissions
trading schemes operating in the US. and Europe (Walls and McConnell, 2007, p. 22).
The real difference between TDR and MDR from a theoretical perspective is that
TDR is highly administered and regulation (zoning) based. The authors quip
“All that [traditional or conventional TDR programs require] is that the zoning
authority gather the information necessary to allocate land across uses efﬁciently;
analyze that information properly; convince elected officials that the analysis is
accurate; adopt a zoning map and ordinance; choose, implement, and collect the

optimal tax; monitor and enforce the whole system; and alter as necessary with

changing conditions. Piece of cake.” ( Thorsnes and Simon, 1999, p. 260)
In the opinion of these researchers, the aforementioned elements when taken together add

cost to transactions and make allocation less efficient and less equitable. For smaller

16

units of government and communities which may lack the resources to adequately
perform these tasks, the consequences are especially acute. TDR could be, theoretically
Speaking, too cumbersome to effectively and justly administer. But given the
distributional beneﬁts of development rights markets, the researchers conclude that “it is
likely that some form of MDR program is necessary for effective open—space
preservation” (p. 266). Whatever exact form the MDR program takes, it would have to
require little administration and avoid the use of zoning except as an instrument to correct
market failures.

Other institutions exert significant inﬂuence upon the operation of TDR programs and
resulting performance. The exigencies imposed by local real estate markets and other
economic conditions are important factors affecting program function and performance.
Barrows and Prengruber (1975) suggest that market demand characteristics signiﬁcantly
inﬂuence program success because market strength largely determines the incentive for
landowners to participate in development rights markets. While markets will often
change, TDR programs might not, and the ensuing chasm between emerging market
conditions and existing program policies and objectives may undermine the future
effectiveness of the program. Local market conditions determine whether or not
development rights act as an incentive for landowners to participate in market-based land
preservation (Walls and McConnell, 2007).

1.4 Conclusion

One of the foremost experts on TDR in the United States, Rick Pruetz, reported in

2007 that altogether 181 TDR programs in 33 states have protected more than 300,000

acres of Open space, and agricultural and environmentally sensitive lands (p. 3). Walls

17

and McConnell (2007) estimate that 140 programs operate in the US. and that some have
protected up to 49,000 acres (p. 8). According to the American Farmland Trust (2001)
the number of programs has grown substantially through 19805 and 19905 as many local
governments began formalizing the practice in ordinances. The same report mentions
that the growing number of programs was not related to signiﬁcant gains in farmland
preservation—a conundrum central to the work presented by this author. Walls and
McConnell (2004) contend that TDRS “have met with only limited success [. . .] only a
handful have had active markets with numerous trades of development rights each year
and a signiﬁcant amount of preserved acreage” (p. 13).

Described by some as “creative, innovative, and even experimental” (Pruetz, 2007),
many questions concerning the Operation and overall effectiveness of TDR as a land use
(and economic development) tool remain open to investigation and critique. Exactly how
many TDR programs are in fact functional is unknown (and one of the questions
examined in the research presented herein). For despite its growing use among
communities for various purposes, McConnell et al. (2006) contend that

Whatever the stated goals, in practice, few TDR programs have been successful in

meeting those goals. In fact, many programs are ‘on the books’ but remain inactive,

i.e. few development rights have been transferred. (p. 632)
While 181 TDR programs may exist in some sense as laws or regulations that have been
formally adopted by legislative and administrative entities, this number does not mean
that more communities are successfully meeting their land use (and economic
development) goals through TDR.

Despite its shortcomings—both theoretical and empirical—more than a few

communities have managed to implement TDR programs that have enabled them to

18

protect Vital resources and public amenities while accommodating and even supporting
growth—urban, economic, and otherwise. Perhaps the most successful programs have
accomplished this by recognizing that these goals need not conﬂict, but can provide
conditions necessary for functioning TDR markets (Machemer and Kaplowitz, 2002;
Pruetz 2003). Whatever the case, further investigation is required to determine what

factors contribute to success and when success has in fact been achieved.

19

2 Measuring success
This chapter departs from the historical, conceptual, and theoretical aspects of the first

chapter as it provides a comprehensive discussion of current empirical research
concerning TDR and related practices including purchase of development rights and
other growth management techniques and Strategies. Common themes and areas of
inquiry addressed by past research are identiﬁed and discussed, and connections are made
between research into TDR and Similar land use programs.

Having surveyed this body of knowledge, the author recommends a direction for
additional research. Speciﬁcally, this chapter probes the shortcomings and limits of
previous research in order to derive research objectives that frame the remainder of this
study. These objectives address the limitations of previous methodologies, most notably
case studies and other approaches that have proscribed research to the examination of a
limited number of renowned programs.

Research objectives also address areas of inquiry that have not been explored in a
systematic and comprehensive manner by previous investigations of TDR programs.
These areas of inquiry can be roughly delineated in two groups: success factors and
success indicators. It is the aim of this chapter to bring some of these to the foreground.
2.1 Evaluating growth management

TDR, at least in most of its iterations, attempts to guide or manage the development
of urban and rural areas and is one of many techniques falling under the umbrella of
growth management policy. Indeed, most analyses of TDR have sought to place it
among other growth management techniques (particularly land preservation techniques),

often emphasizing the desirability of programs that use multiple techniques including

20

TDR in complementary and mutually supportive relationships (McConnell et al. 2007,
2003; Brabec and Smith, 2002; Brody et al. 2006). A brief survey of research devoted to
the evaluation of growth management and land preservation techniques should, therefore,
provide some context for the examination of TDR.

From a policy standpoint, understanding the effects of growth management policies
as implemented under conditions imposed by real communities and real landscapes
would seem to be an important priority for researchers. While such research could prove
valuable for practitioners who administer growth management programs, relatively little
effort has been devoted to devising empirical measures of program outcomes. Reﬂecting
on existing growth management research, many authors have called attention to the
paucity of empirical Study into growth management program outcomes (Bengston et al.,
2003; Daniels and Lapping, 2005; Wassmer, 2006). Daniels and Lapping (2005) survey
land preservation and smart growth research, looking for existing connections between
these two planning practices and recommending ways that smart growth might beneﬁt
from greater integration of land preservation strategies into comprehensive approaches
for combating urban sprawl and directing development toward beneﬁcial ends. The
researchers discuss Studies of a variety of land preservation techniques including TDR.
They find that land preservation research has been largely disconnected from growth
management research noting that “planners have been slow to recognize the power of
land preservation as a planning tool, and planning academics have generally avoided the
topic” (p. 325). Because of this, there is a need for studies that investigate the ways land

preservation programs affect growth management.

21

Some research has, nevertheless, attempted to explore growth management program
outcomes and the connection between growth management and land preservation.
Examining what he describes as “two of the most blunt land—use planning instruments
contained in the Smart Growth toolkit”, Wassmer (2006) conducts multivariate
regression to measure the effects of statewide growth management and urban
containment policies on the land area of 452 US. Census Bureau defined urban areas
(UA’S) in the United States. His regression model includes factors that, according to
previous research, account for the growth of urban areas into surrounding rural
communities—urban decentralization. Factors taken into account include functions for
“natural evolution”, “ﬂight from blight”, “ﬁscalization of land use”, “regional variation”,
and growth management programs. Growth management programs are defined by
several program features and placed into categories: strong and weak containment
programs that either restrict or accommodate growth; programs in states with statewide
growth management that require vertically, horizontally, and/or internally integrated
urban containment. Controlling for factors like “ﬂight from blight” and “natural
evolution”, Wassmer observes that local programs in states where vertically and
horizontally integrated growth management is required achieve substantial, statistically
signiﬁcant reductions in square miles of their urban area (p. 54).

Wassmer also finds that time can affect the performance of urban containment
programs. For states like Florida which require vertically, horizontally, and internally
consistent growth management, a “IO-percent increase in the number of years on the plan
is expected to reduce the [size of a UA] by 0.4 percent [. . .] from What they would have

been without the state-imposed growth management regime” (p. 56). Wassmer continues

22

to state that for the “typical U.S. UA in year 2000, every lO—percent increase in the years
[a restrictive form of local urban containment] is present is expected to decrease the
urban area’s size by -0.12 percent” (p. 56).

Other researchers have employed different methods for measuring the performance of
growth management techniques. Conway and Lathrop (2005) address whether or not the
ever increasing number of growth management schemes implemented throughout the
United States actually achieve their purported “ecological” objectives. Echoing the
observations above, these researchers contend that although theoretical modeling
(primarily economic models) has been able to identify conditions conducive to the
successful implementation of growth management policies, such accounts have not
empirically assessed actual outcomes of those policies. Rather than use hedonic pricing
or regression, Conway and Lathrop employ a spatial constraints model to project the
potential effectiveness of four growth management techniques (downzoning, cluster
development, wetlands/water buffers, and open space protection) in two study areas. The
modeled outcomes of alternative development scenarios are then compared using four
metrics to capture the impacts of development on ecosystems in the study areas. Metrics
are percent of total area preserved, number of patches, mean patch size, and perimeter-
area ratio (p. 284). The researchers conclude that this approach successfully identiﬁes
land uses most likely to undergo urban conversion as well as the location of those parcels.
Based on their ﬁndings, Conway and Lathrop are able to determine which of the four
conservation strategies would best avoid landscape fragmentation, preserve pristine
natural lands, enhance water quality, and preserve Open space (Conway and Lathrop,

2005, pp. 287 — 289).

23

 

Using a case study, a common research methodology in land preservation literature,
Daniels (1999) examines farmland preservation programs in Lancaster County,
Pennsylvania and brieﬂy explores the possibility of implementing Similar programs in
other States. He delineates 5 measures of success: 1) protection of a critical mass of
agricultural land, 2) maintenance of affordable land prices, 3) long-term reliability, 4)
cost-effectiveness, and 5) sustained social and political capital (p. 263). Affordable land
prices, for example, contribute to the success of preservation programs by enabling
farmers to acquire additional land thereby improving proﬁtability and long-term
commitments to use the land for agricultural purposes. Sustained social and political
capital, or public support and political leadership, could be construed as success factors
as well. Only the first measure, critical mass, gets at an objective measure of program
performance that is a terminal objective—it is one of the ﬁnal goals of agricultural
preservation. Here Daniels observes that

“Lancaster County has made good progress toward the protection of a critical mass of

farmland [...] As of 1997, 320,000 acres of farmland were zoned for agricultural use

[...] From 1983 through 1998, nearly 30,000 acres of farmland were preserved for
farming” (p. pp. 265-266).

On its face, 30,000 acres would appear to be a significant amount of preservation. But, as
Daniels notes, this represents only 7 percent of farmland in Lancaster County (p. 268).
Unfortunately, Daniels does not attempt to explain why 7 percent is sufﬁcient. He does
not justify a threshold beyond which performance (in this case the number of acres
protected) can be deemed “successful.”

As mentioned before, many analyses of growth management have explored the

mechanisms and circumstances surrounding or contributing to the successful

24

 

implementation of growth management policy. In the course of studying the effects of
state mandated growth management policy on local planning for natural hazard
mitigation, Burby and May (1997) evaluated comprehensive plans of eighty eight
communities in California, Florida, and North Carolina. Their intent is to test the
proposition that state mandates promulgate more, higher quality local comprehensive
plans than are found in states without mandates. Similarly, Brody et al. analyze “factors
contributing to the adoption of local sprawl-reduction policies” implemented by local
governments in Florida (p.297). These studies have certainly contributed valuable
information to the investigation of growth management policy, particularly its
institutional facets, but often avoid discussion of the outcomes of the policies that are
implemented. Paraphrasing a 2002 study published by Hollis and Fulton, research and
evaluation of growth management techniques “[tend] to focus on describing instruments
and programs rather than evaluating their impacts” (Bengston et al., 2003, p. 280).

The reasons for this are varied. They include “lack of knowledge of the
counterfactual,” and the lag between implementation of growth management techniques
and expected outcomes (Bengston et al., 2003, p. 280). The former can and has been
addressed through econometric (Beaton, 1991) and other methods including spatial
constraints modeling (Conway and Lathrop, 2005). Whatever the reason, Bengston et al.
exhort that “there is a need for careful ex post evaluation of the effectiveness and impacts
of growth management efforts” (p. 280, italics in original). Post hoc evaluation is not
without its problems, and is by no means a deﬁnitive measure of program success and
failure. Nevertheless, the call for more empirical study of growth management programs

seems to be reasonable given the prominence of the growth management in planning

25

practice and the lack of understanding surrounding the measurement of outcomes. Given
the attention currently paid to TDR as a growth management strategy, developing an

empirical account of program outcomes and success factors is of great interest.

2.2 Evaluating TDR
Although TDR is but one of many growth management strategies, its unique features

and currency set it apart and complicate attempts to evaluate its outcomes. Perhaps
because TDR has been used to balance and protect the competing economic and other
interests, expectations of its capacity to create win-win outcomes have been unreasonably
inﬂated. After a 1997 conference devoted to the practice, Robert Lane, director of the
Regional Design Program at the Regional Plan Association, reported that
It became clear during the conference that the perceived success or failure of TDR
programs was colored by excessive expectations. The notion that a TDR program
would, by itself, protect open space, preserve activities such as farming, help create

appealing Village centers, and do all of this Simply by offering a mechanism for

moving development around is Simply not realistic. (p. 2)
Apart from being unrealistic, such expectations obscure the fact that TDR is not a
panacea for land use conﬂicts but rather one means of incentivizing certain land use
decisions that support the public interest and distributing the cost of those decisions
across a wider geographic area and across a wider portion of a community (and perhaps
even over a longer period of time).

Within the context of hyperbole and misunderstanding there is a need for broad,
empirical study of the factors that lead TDR programs toward success or failure, and
metrics by which program success might be judged. Machemer et al. (in press) note that

“previous published literature is unclear on how widely TDR programs have been

26

embraced or adopted by communities. Nor has the literature empirically evaluated TDR
program implementation or success” (p. 2).

While research has tended to examine theoretical issues related to land economics and
issues of equity surrounding TDR (Beaton 1991; Barrows and Prenguber, 1975; Barrese,
1983; Thorsnes and Simons 1999), other studies have investigated empirical program
outcomes. Brabec and Smith (2002) compared the effects of “three dominant” land
preservation tools on farmland fragmentation in three communities in the United States.
Much like the research of Conway and Lathrop (2005), effectiveness was measured by
the number of acres preserved, average parcel size protected, contiguity of protected
lands, and level of post—protection agricultural activity. The researchers were able to
observe that TDR and PDR programs protected farmland more effectively in terms of
acres preserved (p. 262). This held true for other indicators like parcel size and
contiguity as well.

Studies like these are very helpful as they examine or model the real world impacts of
TDR (often alongside other land conservation techniques). Such research raises
important issues and can help to frame questions for further investigation. Case studies
that examine individual programs or compare several at a time add even greater depth to
this discussion.

Case studies

As is true for much of the literature that examines other growth management and land
preservation techniques, much of what has been learned about the empirical performance
of TDR programs comes from qualitative approaches—especially case study. Perhaps

the most well-known study of TDR is that presented in Rick Pruetz’s Beyond Takings

27

and Givings (2003). In addition to discussions of theoretical issues related to TDR,
Pruetz provides briefs case studies of 142 TDR programs. Each proﬁle examines any
number of issues and does so in great detail. But programs are not compared against one
another using a single standard or set of standards. This is true for much of the academic
research devoted to TDR.

In an early case study of two TDR programs, Pizor (1986) identifies 7 success factors
including receiving areas “well sited for immediate development”, comprehensive and
mandatory development restrictions, TDR banks, and neutral parties to facilitate
transactions between buyers and sellers and provide unbiased, accurate transaction
information (p. 210). In concluding his discussion of TDR in Montgomery County and
the New Jersey Pinelands, Pizor comments that the performance of those two programs
demonstrates “that such programs are capable of preserving large areas of open space
with a minim of public expenditure” (p. 209).

McConnell et al. (2003) assess several indicators of program success for TDR in
Calvert County, Maryland, including 1) the number of acres preserved, 2) the location of
properties preserved, 3) prices over time, 4) Short-run changes in quantities of TDRS sold,
5) and thinness of markets and transactions costs (p. 17). They report that the Calvert
County program appears to be achieving its goal of preserving agricultural land located in
its most restrictively zoned areas with 79 percent of all land entering APD status and 73
percent of permanently preserved land located inside “Farm Community” and “Resource
Preservation Districts” (p. 20). The researchers do not attempt to predict the likelihood
that the program will achieve its long term goal to preserve 40,000 acres of agricultural

land by 2020.

28

Against this backdrop of measured outcomes, McConnell (2003) assess the
effectiveness of program components. Data Show that the cumulative number of acres in
the protected agricultural area has continued to grow faster than the cumulative number
of permanently preserved acres suggesting that some landowners are conﬁdent in upward
price movements—thanks in part perhaps to price stabilizing interventions by Calvert
County. Such calculations on the part Of current landowners would seem to be supported
by market trends that began in the early 19905 and accelerated in 1999 after substantial
downzoning took place. Since 1993, the researchers document approximately 51 TDR
transactions a year. Aside from initiatives taken by the County to create conditions that
are optimal for TDR success, McConnell et al. also note that market conditions enable the
program to be successful: there is enough demand for higher (Slightly higher) density to
encourage developers to purchase TDRS and enough economic beneﬁt in agriculture to
encourage continued farming (p. 27).

But the researchers leave a lot of questions unanswered. As mentioned just above,
they imply that market forces and government policy in Calvert County have somehow
achieved economically optimality. The authors, however, do not supply readers with
any objective criteria by which the effectiveness of program outcomes might be judged,
nor do they describe a model—economic, statistical, or otherwise—that might
scientiﬁcally justify this conclusion and enable extrapolation of results from Calvert
County to other communities. Assuming local real estate market conditions, single zone
sending and receiving areas, a TDR bank, etc. have made TDR successful in Calvert
County, can that knowledge be applied to other cases? Are these success factors at all

universal, or strictly parochial?

29

Standardizing TDR program features and establishing a standard for the evaluation of
program performance begins to address the challenges posed by these unanswered
questions. With this in mind, Machemer and Kaplowitz (2002) examine three short case
studies. The first case study area is Mannheim Township, Pennsylvania. This
community has long considered its agricultural land to be very valuable, as expressed by
its 1987 comprehensive plan. The second case study is Montgomery County, Maryland.
Montgomery County, too, has long recognized the value of preserving agricultural land
and has worked toward that end through many policy actions throughout its storied
history of land preservation. The last case study area is the New Jersey Pinelands, which
has had a TDR program Since implementation of the Pinelands Comprehensive
Management Plan in 1980. These three case studies are analyzed through the prism of 13
program elements that the authors suggest are common features.l

Machemer and Kaplowitz assess the three case study programs against several
measures of success including the number of development rights transactions and the
number of acres preserved for each program (p. 780). Montgomery County’s TDR
program is considered successful; Pinelands and Mannheim register as moderately or less
successful because they fail to meet the same set of criteria. But as the authors
themselves are well aware, the question of ascertaining a single, quantitative indicator of
program success is left open to further investigation. And 3 cases are insufﬁcient to
establish the statistical characteristics of an entire population of TDR programs.

One of the cases selected by Machemer and Kaplowitz happens to be one that is
widely regarded as one, if not the, most successful TDR program—ever. It can

reasonably be argued that the literature devoted to the Montgomery County, Maryland

 

’ Aspects of some of these same variables are discussed below in “Chapter 3: Methodolgy’

30

program alone constitutes a substantial percentage of the scholarly TDR research.
Tustian (1983) writes a detailed case history of a nascent Montgomery County, Maryland
program. The account follows the program from its earliest implementation as a “TDR
trial balloon [. . .] in the form of a staff draft master plan for a local area in the wedges
around a satellite village called Olney” to a fully realized, highly successful county-wide
program (p. 68). Tustian delineates program components, explaining the functions of
each and reasons why certain components were included in the program. A TDR bank,
for example, was proposed to bolster public conﬁdence in the program and the
institutional Viability of a private development rights market (p. 68). In addition, Tustian
describes program successes of the first ﬁve years of operation including more than 400
DRs sold and 2,000 acres preserved, reduced development costs in receiving areas,
reduced costs of agricultural land to be used for farming, and reduced costs for public
acquisition of land to preserve as Open space (p. 64).

Alongside Montgomery County, Walls and McConnell (2007) provide case studies of
9 other TDR programs in Maryland, Florida, California, Washington, and New Jersey.
The study describes programmatic goals, design, and performance. The researchers
argue that program success/failure should not be determined comparatively. In others
words, success and failure are relative for Walls and McConnell—relative to the stated
goals of each program. Discussions of program design and performance are, therefore,
conﬁned to each program and little attempt is made establish statistical characteristics of
all 10 programs. Nevertheless, Walls and McConnell do make several general
observations about TDR based on their experiences with these 10 programs. Among

them, the problem of adding density to receiving areas is one of the most pressing. Many

31

programs are unable to add density in receiving areas due to public opposition and
underlying real estate market dynamics that Simply do not favor the densities envisioned
within a receiving area (124). Aside from this challenge, programs may also create
barriers to program usage by adding procedures that create uncertainty for developers or
conversely by enabling developers to circumvent TDR by adding density through other
procedures and programs.

As is the case with growth management research (Brody et al., 2006; Burby and May,
1997), empirical research into TDR programs has focused more on program features and
mechanisms than program outcomes. While many case studies have primarily concerned
themselves with program features, some research strives to examine both program
features and outcomes of multiple programs. Recent research by Machemer et al. takes
the evaluation Of program features beyond individual cases and toward an examination of
TDR as a widespread practice with features that are common to a number of programs.
They comment that “While there are several well-known TDR programs, there is no
central repository of information on TDR programs” (in press, p. 9). Nor have there
been attempts to create a broadly applicable rubric for classifying program components
before adding them to a “central repository.” Accordingly, the researchers develop an
“evaluative framewor ” in order to systematically identify components of multiple
programs. They hypothesize that “programmatic characteristics and elements of TDR
programmes [can] be identiﬁed, that TDR programmes characteristics could be used to
structure a TDR programme evaluative framework and [. . .] that a TDR evaluative
framework would be useful for measuring the relative success of individual TDR

programmes” (p. 776). Fourteen programs are analyzed in order to derive the list of

32

programmatic characteristics and elements, while three case studies (mentioned above)
were isolated to test the appropriateness and utility of the framework for evaluating TDR
at regional, county, and local levels. The authors find that “the evaluative framework and
the comparative analysis of the three TDR programmes illustrate the usefulness of a TDR
evaluative framework” (p. 791).

Common program elements or components can be identified and analyzed in a
systematic manner potentially opening TDR to more comprehensive study. Their most
recent research that builds on this ﬁnding and the foundation provided by the evaluative
framework. Machemer et al. (in press) apply the evaluative framework to 52 operating
TDR programs looking for evidence of relationships between program outcomes and
contributing factors. The investigators advance 7 hypotheses:

l) TDR programs in communities with PDR programs are more successful

2) TDR programs that use development rights banks are more successful

3) TDR programs in states with legislation that enables TDR are more successful

4) “It matters” how many parties or interest groups initiate TDR programs

5) “It matters” how many goals guide the creation of a TDR program

6) Demand for housing stock is important for success

7) Conducting studies of local conditions “matters” for TDR success

Data collected were based on the opinions of individuals administering TDR programs in
communities throughout the United States. Of the 7 seven hypotheses, Machemer et al.
(in press) ﬁnd several statistically signiﬁcant relationships between success factors and

indicators of success. Among them, TDR programs were more successful in

DJ
'9.)

communities with PDR; the presence of TDR banks was associated with successful
programs; state enabling legislation was not found to be significantly associated with
program success; the number of stakeholder groups responsible for initiating TDR was
related to success; the number of programmatic goals was not related to success;
successful programs were more statistically more likely to have conducted studies prior
to implementation.

While the findings correspond to those of many case studies, the indicator of success
that is used in this study makes the application of ﬁndings somewhat problematic. For
one, the metric used to qualify a program as successful is based solely on respondent
opinion. Elsewhere in the Study, Machemer et al. suggest using acres preserved and
number of transfers as indicators of success but avoid using either in this study for
several reasons. Acres preserved, they argue, is not an appropriate measure for programs
due to the difference in program types: urban programs might not typically operate to
preserve land in the way programs might in rural areas where the preservation of
agricultural land is the primary or only program goal. They also note that because
different programs use rights in different ways, the number of rights transferred may
mean very different things from one program to another (p. 14). In a program that has
allocated only 1 development per 40 acre parcel, transferring 1 right preserves 1 acre of
land versus a program that allocates 1 right per 5 acres of land where such a transfer of 1
right preserves 5 acres. This is an oversimpliﬁcation, but even such a simple formulation
demonstrates just how difficult it could be to use “number of rights transferred” as a

measure of program success. The problem with using “rights transferred” and “acres

34

preserved” is that neither has been standardized in such a way as to make them a
universally applicable measure of program success.

Avoiding both of these metrics for the reasons just mentioned, Kaplowitz and
Machemer (in press) instead choose “respondent opinion of program success” as the sole
success indicator because “Virtually every respondent answered the survey question about
how their program was working” (p. 14). Nearly 40% of respondents reported that their
programs were successful. Exactly what is meant by “success” is not discussed further or
deﬁned in the paper opening this measure to some question. Without such a discussion,
one is left to wonder how the opinions of program administrators could provide a
reliable, and valid indication of program success or failure. This is of particular concern
in the context of what has already been discussed above: success and failure of TDR
programs seems to rise and fall with perceptions of its potential to address conﬂicts
arising from land use decisions. For example, if a program administrator believes that
TDR is not meeting expectations that were based on overly optimistic estimations of its
capabilities, she may be inclined to discredit modest program gains made by program that
is actually performing. Likewise, if a program administrator is initially skeptical of the
merits of TDR, she may be impressed by and overestimate the value of modest gains
made by an underperforming program. Finally, if an administrator was involved in the
design of the program and had foreknowledge of concepts like those being developed by
the research presented here, the presence or absence of institutional features that she may
believe are associated with success may skew the self assessment. Whatever the case
may be, more study of the relationship between administrator perception of program

success and other objective indicators needs to be pursued.

35

Despite the shortcomings of their research, Machemer et al. (in press) move research
into TDR forward quite substantially. Before, research had not established a set of
programmatic components to be investigated, nor had it analyzed the characteristics of
such a large sample of programs. The sample, moreover, included a range of programs in
geographic and programmatic terms. This is, perhaps, the first study to have collected
data from programs operating in strictly urban contexts. Geographically speaking, this
study includes programs from across the United States. Both of these innovations
contribute much to a body of knowledge that had largely restricted itself to the
investigation of TDR that preserves agricultural land in rural communities at the urban
fringe in a handful of different states.

2.3 Conclusion

Relatively few comprehensive, empirical investigations of growth management and
TDR have been conducted. Of the empirical research that has been performed, much of
it has tended to examine program components but not program performance. Case study
approaches, which have dominated the research, have allowed investigators to identify
some relationships between the characteristics of program components and programmatic
outcomes. Perhaps due to the pervasive belief that “every program is different,”
measures of programmatic success/failure have not been developed across multiple cases.
This limits the validity of generalizations drawn from existing empirical research. For
the most part, current empirical research has had much to say about individual programs
and very small samples of individual programs, and little to say about the performance

and Viability of TDR in a broader sense.

Theoretical analysis of TDR (presented in Chapter 1) is primarily concerned with the
broader implications of the technique. Several of those accounts (Barrese, I983;
Thorsnes and Simons, 1999; Barrows and Prenguber, 1975) question the potential
efﬁcacy of TDR to address its stated goals while protecting the equity concerns of
various stakeholders. These same analyses also scrutinize the ability of TDR to create
markets that efﬁciently allocate land and resources. Thorsnes and Simons capture the
position of much of the theoretical and economic analyses of TDR saying “Not
surprisingly, the economists who have studied conventional zoning-based TDR programs
ﬁnd little to applaud” (p. 257). Case studies can address theoretical concerns (Wall and
McConnell), but only in that instance.

With 140 to 181 programs operating throughout the United States, and more
communities considering implementation of the TDR every year, there is a need for
comprehensive and systematic analysis of core TDR program factors and measures of
success. Among factors these factors, several of particular interest emerge from the
literature: mandatory versus voluntary programs; programs with TDR banks; public
involvement in implementing TDR; programmatic goals of TDR programs. Without
such analysis, lessons learned in one community are of questionable value for others.
This is not to diminish the contribution of case study research: those studies have
revealed much about operation and performance of TDR in specific instances. But case
studies do not consider whether or not comparisons can be made between TDR programs
in the ﬁrst place, and nor do they attempt to develop the objective grounds upon which

comparisons and valid inference might be based.

37

3 Methods

3.1 Research overview
In the gaps between existing empirical investigation and theoretical treatments of

TDR many questions concerning the function and performance of TDR programs remain
unanswered. Existing empirical research has mostly involved case studies of a limited
number of TDR programs and has not attempted to collect data from a large number of
programs and analyze programmatic performance on a broad scale.

Case studies and other empirical research have contributed Signiﬁcantly to the
understanding of the operation and performance of individual programs but questions
about the relationship between program characteristics and outcomes over a larger
sample of TDR programs remain unanswered. As such, the relationships between
program characteristics (success factors) and program performance (indicators of
success) can only be implied but not scientiﬁcally inferred beyond individual cases. A
consensus seems to have emerged around the well studied successes of TDR in places
like Calvert and Montgomery County, Maryland or the New Jersey Pinelands. But this
consensus cannot replace an understanding of TDR that is based on a systematic
comparison of characteristics and outcomes from a larger number of programs
representing different types of communities. While scholarship lauds programs in
Montgomery County, Maryland it has had little to say about the implications of those
successes for programs in other communities.

Because so few attempts have been made to study TDR in such a manner, research is
needed to identify methods capable of achieving comprehensive, objective assessment of
the state Of the art. The prevalence of various program components and related

conditions (e.g. the existence of TDR banks, the age of programs, number of goals, etc.)

38

needs to be established as does their effect on the performance of TDR programs.

While previous research has described the program characteristics of a limited number of
programs in great depth, it has not explored success factors and indicators of success
across a large number of programs. The statistical characteristics of the 181 TDR
programs that may be operating have not been established. Whether or not 181 TDR
programs are working actively to preserve agricultural and environmentally sensitive land
and protect historically signiﬁcant sites, remains open to investigation.

One of the objectives of the research presented here is to establish some definition of
program success—albeit a provisional one that will require more testing before it can be
broadly applied. In order to establish any provisional criteria, however, the
characteristics of a large sample of programs need to be analyzed. Only after identifying
the characteristics of distributions of possible indicators of success, can success factors be
tested for associations with those indicators.

This study attempts to compile data from a large number of programs, many of them
operating at and within different units and levels of government; with different purposes;
and within vastly different geographic, ecological, and socioeconomic contexts. By
including as many programs as possible, it is hoped that a set of program features
(discussed below) will emerge that contribute to or may even predict successful outcomes
for TDR programs more generally.

Therefore, the author has collected data from through a nationwide survey of TDR
programs and presents a quantitative analysis of that data. In subsequent sections, the
author will

1. Present descriptive statistics for success factors and indicators

39

2. Suggest a metric for assessing program success
3. Identify program features or success factors that are statistically related to
program success as described in the following hypotheses:
a. The level of the unit of government administering a TDR program
inﬂuences program performance
b. So-called “mandatory” TDR programs are more successful than voluntary
programs
c. The geographic extent or size of a community/political jurisdiction does
not inﬂuence program performance
d. TDR programs that operate in the presence of a purchase of development
rights program are more likely to be successful than those that do not
e. TDR programs that use TDR banks are more likely to be successful than
those that do not
f. TDR programs with higher numbers of program initiators are more likely
to be successful than those with fewer program initiators
g. TDR programs with more programmatic goals are more likely to be
successful than those with fewer objectives
h. Programs that have been operating longer are more likely to be successful

than those that have been operate for Shorter periods of time.

40

3.2 Survey Instrument
Interviews of planning practitioners have been used to collect data from TDR

programs in previous studies. Interviews form the core of qualitative, case study research
that predominates the recent academic study of TDR, land preservation, and growth
management. But earlier in its history, study of TDR did not include the observations of
program administrators and program participants. Writing in 1986, Pizor comments that
“no study exists in which those who actually have participated in the buying, selling, and
brokering of TDRS have been consulted” (p. 203). To address this gap, Pizor interviewed
84 planners, developers, real estate professionals, bankers, attorneys, and landowners
involved in the administration and execution of Montgomery County, Maryland and New
Jersey Pinelands TDR programs. Pizor used both oral and written (mail-in surveys) to
interview these “key informants.”

The survey developed for research presented here is based on a survey of key
informants conducted by Machemer and Kaplowitz in 2002. In that case the survey was
a self-administered, mail survey consisting of open and closed-ended questions. A
multiple-method approach was used to design and pretest the survey. Initial review of
literature, interviews with planning practitioners and scholars identiﬁed “key gaps in
knowledge” concerning the operation of TDR programs. The survey divided 56
questions into six sections including 1) program orientation, 2) sending and 3) receiving
areas, 4) market history, 5) program components, and 6) identiﬁcation of TDR programs
(p. 10). A maximum of 5 attempts were allowed for each respondent.

Data presented in this study was elicited from planners or government ofﬁcials

administering and operating transferable development rights programs in communities

41

throughout the United States based on a list of programs created by Pruetz in 1997, and
amended in 1998 by Machemer. An initial list of 142 programs was narrowed to 109
based. Three (3) new programs were discovered through interviews, and added to the list
giving a total of 112 programs. Again, no more than 5 attempts were made to contact
respondents. Telephone and email inquiries were made to 1) identify the individual or
individuals most capable of answering the survey questions. In some cases this proved
difficult because some programs had been inactive for so long that respondents were
completely unfamiliar with the TDR programs operating under their authority.

The survey (see Appendix) was altered over the course of the data collection period in
order to improve its performance. It was, initially, too long and failed to elicit responses
to questions concerning quantitative program outcomes. Interviewees were, in many
cases, unable to accurately recall detailed information. Email follow-ups were often used
in these cases to capture key information that a respondent was simply unable to
remember during an oral interview. Survey questions were not altered signiﬁcantly
during this process. The questions were grouped according to themes identified by areas
of inquiry.

Interviews were conducted by telephone, email, and emailed survey. Almost all of
the telephone surveys were recorded, but at this time have not been transcribed.
Interviews lasted anywhere from several minutes in the case of programs with little or no
activity to well over an hour. Interviewees voluntarily provided additional or
supplemental information consisting of planning documents and records, and third party
documents including reports prepared by consultants and external agencies. Survey

responses, including information from these other sources, were then entered into a

42

database. Responses were recoded to facilitate quantitative analysis. The recoding
process was iterative.
3.3 Statistical Analysis

Statistical analysis and further data manipulation were performed using SPSS®. In
order to create a more consistent dataset capable of generating valid results, non-urban
programs and urban programs were investigated separately. Due to limitations of this
paper, ﬁndings for the 6 “urban only” programs are not presented here.

Statistical tests were chosen based on the characteristics of data gathered through the
survey and other sources. For this study, distributions for variables acres preserved,
percentage of sending area preserved (PSAP), and percentage of total land preserved
(PTLP) are all non—normal (see Chapter 4: Findings). Nonparametric tests are
appropriate for non-normal distributions. Mann-Whitney U test allows for comparisons
of 2 samples of ratio data grouped by dichotomous values from a binomial variable.
Values from each sample are ranked, rankings are compared, the results of those
comparisons summed, and means calculated for the sums. The test then calculates the
probability for that each sample is drawn from the same distribution. The test calculates
significance levels for one and two-tailed tests and is therefore suited to hypothesis
testing of binomial/continuous and binomial/ordinal variables where the direction of
relationships is posited. Where two continuous variables were analyze, bivariate
correlation was performed to test association, direction, and strength of any linear

potential linear relationship.

43

4 Findings

In this chapter, the author presents results from a nationwide survey of TDR programs.
Descriptive statistics and statistical tests applied to indicators of success and success
factors are presented.
4.1 Response rate

American Association for Public Opinion Research (AAPOR) minimum response
rate (RRl) was calculated by dividing the number of completed interviews/survey by the
total number of potential respondents. Potential respondents include all complete and
incomplete interviews and surveys, refusal/non-responsive contacts, and unknown

ineligible cases. RRl for the survey instrument used in this study was 59.14 percent. (see

 

 

 

 

 

 

 

 

 

 

 

Table 1).
Table 1: Minimum Resmnse Rate

#
Interviews/survey attempted 70
Cases of unknown eligibility l6
Refusal/non contact 20
Known ineligible cases 13
Potential respondents 93
Completed Interviews/surveys 55

RR] 59.14%

4.2 Indicators of success

Number of transfers and transactions
The number of transfers and transactions can often be found throughout TDR

research as an indicator of program performance. TDR programs responding to this
survey used a variety of methods for documenting the number of development rights

transferred, and data was not recorded using a consistent unit of measurement. Programs

44

reported as few as 0 rights transferred and as many as 1,554 documented rights
transferred.

Programs seemed more likely to consistently document the number of transactions
that have occurred. Although the average number of transactions was 24.80, the median
indicates that 50 percent of the 35 programs reporting this information have had fewer
than 3 transactions. Twenty (20) percent of all the programs reported 0 transactions. The
distribution of number of transactions was very dispersed ranging from 0 to 280.

Assets preserved

Another indicator of program performance is the extent of preservation. This is
usually measured in square feet in the case of urban TDR programs, or in acres for
programs where tracts of land are preserved. For the majority of TDR programs which
are primarily concerned with preservation of land and other spatially deﬁned amenities
like historic buildings, this indicator is often used to document program performance.

Research presented here reveals several interesting aspects regarding this metric.
First, acres preserved as reported by 36 programs2 exhibits a highly dispersed distribution
ranging from 0 to 100,000 acres. Even with the high outlier case removed (100,000 acres
preserved in King County, Washington), the histogram in Figure 2 depicts a highly
dispersed, positively skewed distribution. The data cannot be described by a normal
distribution, especially with the preponderance of “0” data. Aside from the statistical
challenges that this poses for statistical analysis, the shape of the distribution also says a
lot about TDR program outcomes: the distribution is very skewed because (as was true

for the number of transactions) many programs have not preserved any land whatsoever.

 

2 To achieve greater consistency across data, only TDR programs that function primarily to preserve tracts
of land were considered here. Programs that operate within the boundaries of more heavily urbanized areas
to preserve historic buildings or direct economic redevelopment are not included.

45

In fact nearly one ﬁfth of the 36 programs that reported the number of acres preserved
indicated that their programs had not managed to preserve any land. This means that
within the lowest quartile, only one program preserved one acre—all others results in the
lowest quartile were 0. The total number of acres preserved by programs falling below
the median of 231 acres was 584.59. On the other hand, programs in the top quartile
have preserved 143,000 acres—the top 25 percent of programs preserved 99.6 percent of

total acres preserved by TDR programs considered in this study.

Acres Preserved: All Programs

 

 

 

 

 

  

 

 

 

3o—
20.:
>
o
C
0
3
U'
0
L-
IL
10-// H‘.
3 I I I I I
0. 30 5000.00 10000.00 15000.00 20030.00

Land preserved In acres

Figure 1: Histogram showing distribution of acres preserved by TDR for all local and county
programs, excluding outlier that has preserved 100.000 acres—more than 5 times that of the next
highest case.

46

Differences between local and county administration
As addressed in greater detail below, there is a Statistically significant difference

between the samples of acres preserved when grouped by level of government
administration. Locally administered and county administered programs have preserved
statistically different amounts land. Given this difference between these two groups,
characteristics of each are presented.

Each class contains 18 cases. The mean number of acres preserved by county
programs was nearly 10 times that of local programs (2738 versus 222 acres). Median
values for these two distributions were dispersed even further apart than the mean values:
the median value for counties was approximately 30 times that of local governments (651
versus 20 acres). Local TDR programs have preserved a total of 4003.37 acres, while
TDR administered by counties has preserved 149,276.39 acres.

Normalizing acres preserved

Even with programs divided into two categories, differences between individual cases
persist. As mentioned before, not all localities or counties are the same size, and
individual localities and counties may have very different goals for preservation.
Preservation can be represented in a way that accounts for land mass differences between
communities. Numbers of acres preserved counts can be normalized by calculating it as
the percentage of total land preserved per total land area for a given community or
political jurisdiction. Acres preserved could Similarly be calculated as the percentage of
total acres preserved divided per total sending area acreage. Alternatively, values for
total land area could be introduced into a statistical model as a covariant. If a signiﬁcant
relationship were found to exist between total land area and the response variable, total

land preserved, the inﬂuence of total land area could be controlled.

47

Normalized by sending area
Percentages of sending area preserved (PSAP) for the 22 cases reporting this

information ranged from 0 to 53.91 percent. The mean for this distribution is not very
meaningful due (once again) to a positively skewed distribution (see Figure 3). Given
this distribution, the median value of 7.425 of is probably the more meaningful statistic.
Dividing the distribution further into quartiles shows that the lowest 25 percent of cases
preserved 0 percent of their sending areas. Statistically, programs in the highest quartile
have preserved a little more than 25 percent of sending area land. Actual performance in
this quartile included programs where 31.23, 32.78, 46.15, 52.81, and 53.91 percent of
sending area land has been preserved.

Percentage of Sending Area Preserved

12"

 

Frequency

 

 

 

 

 

 

 

o. :0 10.00 20.00 30.00 40.00 50.00 60.00
% of send area land preserved

 

 

 

 

 

 

 

 

 

Figure 2: Histogram showing distribution of acres preserved expressed as percentages of sending areas.

48

Normalized by total land
Percentage of total land preserved (PTLP) ranged from 0 to 14.27 percent for 35

cases shown in Figure 3. The distribution was positively skewed (again) and the mean of
1.63 percent may not reveal as much about these outcomes as does the median of .16 of a
percent. Most programs have preserved less than 1 percent of their total land area

through TDR. In fact, only the top 25 percent reported preserving more than 1 percent of
their total land area through TDR. Within the top quartile, programs reported 1.10, 1.14,

3.18, 3.59, 5.13, 5.72, 7.09, 12.93, and 14.27 percent of total land area preserved.

Percentage of Total Land Preserved

 

 

 

 

   

 

 

 

 

 

30‘
20d ......
>
o
c
0
3
U'
0
5
II.
10‘
n . ., .. ..-;:i -‘ I I i I
v I I I I I I I I
0.00 2.00 4.00 6.00 3.00 10.00 12.00 14.00

'5 of land area preserved

Figure 3: Histogram showing the distribution of acres preserved expressed as percentages of the total land
mass of individual communﬂies/jurisdictions. The distribution does not include the outlier datapoint.

49

Program administrator opinion
In addition to the indicators of program performance described above, program

administrators were asked whether or not they believed that their TDR programs were
“working” (see Appendix, 2007 Nationwide Survey, Question 7.2). The majority of the
50 respondents believed that their programs were. In fact, 33 program administrators
responded “Yes” versus 17 who responded “No.”

Mann-Whitney was subsequently conducted to examine the relationship between
“yes” and “no” responses to the question “Is your program working?” and other
indicators of program performance. The ﬁrst was acres preserved. Acres preserved data
were placed into “yes” and “no” groups and the test was run. The results demonstrate a
statistical difference between the two groups (p < 0.001). “Working” programs where
“yes” was indicated have a much higher mean rank than “not-working” programs where
“no” was indicated (23.38 versus 8.75).

Next, Mann-Whitney was used to examine the relationship between these same two
groups of programs (working and not-working) and the percentage of sending area acres
preserved (PSAP). Results were similar to those of the previous test: there is a
statistically significant relationship between working/not-working programs and PSAP (p
< 0.001). Working programs had a higher mean rank than not-working programs (23.04
versus 8.33).

Another Mann-Whitney test was conducted to examine the relationship between
working/not-working and the percentage of total land preserved (PTLP). Results were
similar to those of the previous test: there is a statistically signiﬁcant relationship
between working/not-working programs and PSAP (p < 0.001). Working programs had a

higher mean rank than not-working programs (14.47 versus 5.14).

50

Finally, Mann-Whitney was used to examine the relationship between program
administrator opinion and the number of transactions. As is the case for indicators
related to the extent of preservation, the number of transactions is statistically related to
working/not-working programs. Speciﬁcally, working programs had a much higher
mean rank than not—working programs (23.91 versus 9.29, p < 0.001 ).

4.3 Success Factors

Success factors (conditions, practices, and policies contributing to or detracting from
TDR program performance) were evaluated against success indicators developed above.
Because percentage of total land preserved (PTLP) is the only quantitative indicator that
can be used to describe performance for most cases (see Chapter 5 for more discussion),
it was used as the response variable against which success factors were analyzed.

Level

Local/county classification was used to delineate two groups of programs: programs
administered by local governments in smaller jurisdictions, and programs administered
by county governments in larger jurisdictions. A Mann-Whitney test of number of acres
preserved by TDR programs operated by local governments (cities, townships, etc.) and
the number of acres preserved by programs operated by counties conﬁrms that there is a
statistically signiﬁcant difference between the two at p <.05 (See Appendix ).
This suggests that local programs do, on average, preserve fewer acres than county-wide
programs.

To determine whether programs operated at the local or county level inﬂuenced the
percentage of sending area preserved, PSAP was divided into classes based on local or
county administration and Mann—Whitney performed. The results of this test failed to

demonstrate any statistically signiﬁcant difference between PSAP for local and county

51

governments (p > 0.10). To determine whether programs operated at the local or county
level inﬂuence the percentage of total land area preserved, PTLP was divided into classes
based on local or county administration and Mann-Whitney performed. Again, the
results of this test failed to demonstrate any statistically significant difference between

PTLP for local and government governments (p > 0.10).

Mandatory vs. voluntary
TDR programs that are mandatory or voluntary are deﬁned loosely in the literature

(see Chapter 1: Introduction). For the purposes of this study, mandatory programs are
those which 1) will not allow developers to increase density without ﬁrst acquiring
development rights and 2) downzone sending areas. While nearly 60 percent of all
programs indicated that TDR was the only way to increase density in receiving areas,
36.2 percent reported that sending areas were downzoned, and only one third of the 36
programs responding to these questions programs were found to operate “mandatory”
programs according to deﬁnition used in this study.

Using Mann—Whitney, no statistically signiﬁcant difference was observed in
percentage of total land preserved by mandatory versus voluntary programs. A Mann-
Whitney test was also used to test the signiﬁcance of downzoning sending areas. No
signiﬁcant difference was observed between percent of total land preserved (PTLP) for
programs that downzoned sending areas and those that did not. The second, and ﬁnal,
component of the mandatory/voluntary variable was similarly tested. In this case,
however, the difference in PTLP for programs that only allowed added density in
receiving areas through the use of TDR and those that allowed added density through

other means was statistically Signiﬁcant at p < 0.10.

52

Total land area
TDR implementation varies considerably, and so do the characteristics of the places

where these programs operate. The geographic extent of communities with TDR
programs surveyed here range from 2,310.4 to 2,564,966.4 acres (see Figure 4).
Outcomes for smaller jurisdictions could reasonably be expected to diverge from those of
larger jurisdictions. After all, an urbanized township will likely have less developable
land to preserve through TDR than a large rural county.

Because both variables are continuous, the inﬂuence of total land area on PT LP and
PSAP was analyzed using bivariate correlation. First, the correlation between acres
preserved and total land area was conducted. Results of the test demonstrate almost no
correlation between these two variables (r = .004, p > 0.10 for two tail).

Correlation between percentage of sending area preserved and total land area
produces a very weak and statistically insigniﬁcant, positive correlation between the two
variables (PSAP) by TDR (r = 0.034, p > 0.10).

Purchase of development rights

Thirty-six percent of the 45 TDR programs responding to this question indicated that
a purchase of development rights program was operating within the same jurisdiction or
community. To analyze the affect of PDR on TDR program performance, the difference
between percentage of total land preserved (PTLP) for TDR programs with and without
PDR was examined using a Mann-Whitney test. The mean rank for TDR programs
without PDR was higher than TDR programs with PDR, and test results fail to

demonstrate any statistically significant difference between these two samples (p > 0.10).

53

TDR bank
Nearly 80 percent of the 48 programs responding to the question concerning TDR

banks did not indicate that their program used a TDR bank. The inﬂuence of TDR banks
on the PTLP was conducted using Mann-Whitney. The mean rank for TDR programs
with TDR banks was higher than TDR programs without TDR banks, but the difference
was not statistically signiﬁcant (p > 0.10).

Number of initiators

The number of initiators range from 1 to 5 (5 was the maximum possible). For the 44
programs responding to the question about initiators of TDR, the most frequent number
of initiators reported was 2, accounting for slightly more than 30 percent of all responses.
The second most frequent response was 1, and the least frequent was 5.

The inﬂuence of the number of initiators on the percentage of total land preserved
(PTLP) was analyzed using two different tests. Bivariate correlation failed to reveal a
statistically signiﬁcant relationship between the number of initiators and PTLP. The
second test using Mann-Whitney found a statistically signiﬁcant difference between the
number of initiators for programs where administrators indicated that their programs
were working. A higher mean rank for this group versus the not-working group implies
that larger numbers of initiators are related to programs that program administrators
consider to be working.

Programmatic goals

The number of programmatic goals ranged from 1 to 4 (5 was the maximum
possible). Possible responses to the goals question include 1) “Preserve the character of
rural communities, preserve agricultural land and open space”; 2) “Preserve historical

sites”; 3) “Protect wetlands, wildlife habitat, ground/surface water quality”; 4) “Direct

54

population growth toward existing urban communities, increase variety of residential
settings, achieve efﬁcient use of existing infrastructure, balancing development over an
entire jurisdiction/metro/region”; and 5) “Create affordable housing.” The most
frequently reported number of programmatic goals was 2, accounting for nearly 45
percent of responses. The next most frequent response was 3, accounting for 35 percent
of responses. Only 6 percent of respondents indicated that their TDR program addressed
4 goals, and no respondents indicated that their program pursued all 5.

The inﬂuence of the number of programmatic goals on the percentage of PTLP was
analyzed using the same procedure as the number of the initiators variable: bivariate
correlation was conducted to test the relationship between number of goals and PTLP,
and a Mann-Whitney test was conducted to detect any statistically signiﬁcant differences
between samples classiﬁed as working or not-working. The correlation did not yield any
statistically signiﬁcant relationship between the number of goals and PTLP. The Mann-
Whitney failed as well to identify any statistical difference between working and not-
working groups.

Age of program

For the 47 programs that provided the number of years their program had been in
existence, the mean number of years a TDR has operated is 18.23 and the median is
17.00. Bivariate correlation between number of years and percentage of total land
preserved (PTLP) did not yield any signiﬁcant relationship between these two variables.
The results of the Mann-Whitney test, however, demonstrated some evidence a
relationship between the age of programs and program administrator opinions of success

(p = 0.083). The working group exhibited higher mean rank than did the not-working

55

group suggesting that programs which administrators consider to be working are

associated with comparatively higher values for PTLP.

56

5 Discussion
In this chapter, the author interprets ﬁndings presented in Chapter 5: Findings, and

places them in the context of efforts to understand TDR success factors and indicators.
Establishing a reliable and meaningful variable or set of variables that capture the
performance characteristics of larger samples of TDR programs has been an elusive
endeavor. While many case studies use various indicators to describe the performance of
individual programs, researchers have not consistently applied indicators to larger
samples of cases. Several researchers, whose works are discussed above in Chapters 1
and 2, have even suggested that no single indicator or set of indicators can be
meaningfully or fairly applied across larger samples of TDR programs because programs
vary so greatly in their implementation (Walls and McConnell, 2007; Machemer and
Kaplowitz, 2002). The following addresses these concerns and identiﬁes key issues

emerging analysis of data collected for this study.

5.1 How is T DR success best measured?
Analysis of the distribution of the number of development rights transferred casts

doubt on the utility of the number of development rights transferred as an indicator of
success for larger samples of TDR programs is suspect. While it may be useful for
examining individual programs in isolation, wide variation between rates of transfer
between programs creates a very dispersed dataset and undermines the explanatory value
of this indicator across a larger number of cases. In fact, transfers may not be a reliable
indicator of anything other than program activity over time for a single program.

Even if number of rights transferred and number of transactions data measured the

same thing for all cases, they still might be of limited explanatory value because the

57

relationship between the number of development rights transferred or development rights
transactions and the number of acres preserved is not necessarily direct. McConnell et al.
(2003) observe that the number of transactions does not appear to have any direct, linear
relationship with the number of acres of agricultural land preserved in Calvert County in
a given year. In some Situations years with high numbers of transfers correspond with
years of relatively low levels of preservation. The number of rights severed from sending
areas varies and so does the lag between severance of rights and final recordation of
permanent conservation easements. In either case, TDR programs differ so much in their
implementation that it would be quite difﬁcult to generalize anything from the number of
rights severed from sending areas or the number of transactions.

Perhaps a better measure of success is provided by indicators that directly describe
progress made toward the primary objective of most TDR programs—preservation of
land, buildings, and the like. Indicators that enumerate the extent of preservation are
arguably the most telling measures of performance and possibly the most universal. As
discussed above in Chapter 2: Measuring Success, they appear very often in literature
devoted to growth management, land preservation, and TDR.

The 36 programs reported a total of 149,276 acres preserved. Those acres represent
land that presumably would not have been preserved any other way. For TDR programs
with very focused preservation goals (for the example Open space on a particular hill in
Greenville, South Carolina) preserving even a few acres can represent substantial
progress made in the pursuit of those goals. Looking strictly at absolute acreage
preserved, it appears that a few programs are performing well and preserving nearly 100

percent of all the land preserved, while the rest have preserved very little.

58

But looking at acres preserved as the measure of program success oversimpliﬁes
interpretation of these findings and obscures important differences between programs.
Acres preserved does not allow for fair comparisons between programs with different
land areas, and all of these programs have different land areas. How, for example, can
the performance of TDR in Morgan Hill, California (total land area 11.67 square miles)
be fairly compared with the performance of TDR in King County, Washington (total land
area 2126 square miles)? King County has more land to preserve, more choices of
sending and receiving areas, and thus more opportunities to ﬁnd optimal
sending/receiving area characteristics. Statistically, programs administered by localities
preserve fewer acres than do programs administered by counties—when preservation is
measured in absolute terms.

Percentage of total land area preserved

But programs vary widely in their programmatic goals and the land resources with
which they are endowed. Brabec and Smith (2002) deﬁne acres preserved in their Study
of land preservation techniques as the ratio of the mimber of acres protected versus the
number of acres targeted for protection (p. 261). This, they contended, allows
comparisons to be made between programs that work with different land resources. For
this study, percentage of total land preserved (PTLP) and percentage of sending area
preserved (PSAP) have been introduced to provide measures of program performance
that allow for comparisons between programs with different programmatic goals and
geographic characteristics. Looking at both of these normalized indicators, the apparent
advantage enjoyed by larger jurisdictions quickly dissipates: the local versus county

dichotomy has no statistical effect on the median PTLP or PSAP. This suggests that the

59

normalized indicators, PTLP and PSAP, could allow for comparisons to be made between
the performance of programs administered at different levels of government and across
disparate geographic contexts. To further test this conclusion, the author examined
bivariate correlations between total land area and normalized preservation indicators.
There are no statistical relationships between total land and PT LP or PSAP. While a
greater abundance of land can obviously increases the extent of preservation in absolute
terms, it does not appear to make programs more successful at preserving land.

Figure 4 depicts a scatterplot of total land area against PT LP for each of the 36
programs reporting this information (including the outlier). The Y-axis represents the
total land area of communities/jurisdictions administering TDR, and the X-axis
represents percentage of total land preserved for each program. The distribution of
datapoints clusters around coordinates 0,0 which speaks to a preponderance of inactive
and underperforming programs. More interesting, however, are the cases located near the
X-axis, extending from the Y-axis to the highest PTLP value—14.27%. Many of these
programs are administered locally by small cities, towns, and townships. For example,
the community that has protected the highest percentage of its land area is Claremont,
California having transferred development rights from 1200 of 8409.6 total acres. The
second highest PTLP belongs to the well—studied TDR program administered by Calvert
County, Maryland. Aside from this case, larger counties are underrepresented among
programs that have protected higher percentages of land. Some of the smallest
jurisdictions (geographically) have managed to protect greater portions of their land mass

than have the largest county administered programs.

60

Total Land Area and Percentage of Total Land Preserved
2700 7 77 777 7
2600 77 77 7777 7 77777 7
2500 77 7 77 7 777 7 7 7 7777 7777
2400 777 7 7 777 7 777777 77 7
2300 777 777 777 7 7 7 7 77
2200 777 77 77 77 7 77 77 77
2100 7 7 777 7 77 77
2000 77777 7 7777 77 77 7 7 777777 7 77777

1900 777 7777777 777777777 77

1800777 777 77 7

 

1700;77~ 77 777 777—77 7 77777 7 777

 

Land area In magmas of acres
1
1
1
1
1
1
1
1
1
1
1
1

 

 

 

 

 

 

 

 

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Percentage of total land preserved by TDFI in %

Figure 4:The X-axis represents total land area, the y-axis represents percentages of total land area
preserved by TDR. Smaller communitiesljurisdictions are plotted closer to the X-axis due to their smaller
land area while programs protecting smaller percentages of their total land area are plotted close to the Y-
axis.

Percentage of sending area preserved
In some ways, percentage of sending area preserved (PSAP) has much to offer as an

indicator of program success. For one, it addresses the fact that (for better or worse)
individual communities define their own measures of success when they formally
implement TDR and other land use management techniques through ordinances,

comprehensive plans, and other regulations. In an effort to draft laws and regulations that

61

reﬂect their public interest, it is assumed or hoped that communities will have undertaken
intensive research and public outreach in the process of crafting these policy instruments.
Local knowledge and technical resources can enable communities to establish and pursue
goals that make the most sense for in each case. So it is conceivable that when
communities deﬁne preservation and other goals, those goals may or may not coincide
with other indicators that may be useful for the purposes of evaluating TDR. Percentage
of total land preserved (PTLP) provides an indicator of program performance that can be
equally applied across many different geographic contexts, but its advantage in this
regard is also its ﬂaw for it does not take into consideration the validity of the goals that
have been deﬁned by individual communities. This is particularly a problem where TDR
is used to protect very speciﬁc resources. This is the case for communities like Morgan
Hill, California and Greenville County, South Carolina. Both have used TDR to protect
ridgelines and hillsides. Achieving these goals is, or was, important to these
communities, but the signiﬁcance of program success might be ignored by indicators that
use measures like PT LP. Measuring success as the percentage of sending area preserved
addresses this problem because sending areas are assumed to reﬂect community priorities
and values.

Nevertheless, there are several problems with this indicator. First and foremost, not
all programs designate sending areas. Second, even when respondents indicated that their
programs designated sending areas, some were not able to provide reliable data. The
effect of both of these conditions is that only 22 respondents reported the size of sending

areas.

62

Different programs designate different amounts of land for preservation. Not every
program designates 86% of its entire land area as eligible to transfer development rights
as is the case in Blue County, Minnesota where approximately 414,000 of 481,000 acres
are eligible to participate in the county’s TDR program. Using percent of sending area
preserved facilitates evaluation of progress toward individual program goals, but it does
not say as much about overall success of TDR as a land use management technique.

Normalizing preserved acreages by the total land area of the
community/administrative jurisdictions in which they are located cannot overcome the
problem of persistent 0’3, but it does relieve investigators from the need to collect
accurate measurements of sending areas. Data deﬁning the total land area of counties,
cities, and townships is readily available through the US. Census Bureau. Because the
data is collected using one methodology at one point in time (during the decennial
census), it represents the same information in all cases and allows for comparisons to be
made between a larger number of programs that design TDR to address different goals
around different expectations for future land use.

Program administrator opinion

Researchers have used the opinions of program administrators to measure program
success. Machemer et al. (in press) found that roughly 40 percent of respondents
indicated that they believed their programs were “working successful.” These
researchers do not elaborate on what exactly is meant by a TDR program that is working
successfully, and the reader is left wondering just exactly what has led these program
administrators to characterize their programs as successful or not successful, working or

not-working.

63

The same question was asked of respondents for the study undertaken here, but with
some different results. The author ﬁnds that two-thirds of program administrators believe
their programs are working. Several respondents stated that they believe their program to
be working but issued several caveats when asked to explain their answers. In almost 10
instances respondents qualiﬁed their answers by commenting on the pace at which their
programs were achieving goals. The sentiment seemed to be that TDR programs are
working slowly but surely, and several respondents felt that TDR could be more even
more successful if known deﬁciencies were addressed. Respondents from both groups,
those who indicated that their programs were working and those who indicated that their
programs were not working, identiﬁed a number of problems that either reduced the
efﬁcacy of TDR in their communities or prevented it from succeeding altogether.

Common themes include

Expanding sending and/or receiving areas in order to create more opportunities
for transferring and using deveIOpment rights
0 Identifying other programs and policies that compete with or allow
circumvention of TDR
0 Pursuing complementary preservation programs, especially purchase of
development rights
0 Creating a TDR bank for the purposes of tracking transactions and facilitating
marketing of the program
0 Enacting policies to discourage use of DR’s in sending areas
The information provided by respondents through the survey process is not doubt

illuminating and raises interesting questions concerning the operation of TDR programs

in communities throughout the United States. But as an indicator of program success, the
opinions of program administrators would seem to be highly subjective and potentially
unreliable. After all, program administrators may not themselves know how to accurately
assess the performance of the own programs. It is reasonable to suspect that some
administrators may not answer this question honestly. The results of statistical tests
described in Chapter 4: Findings offers evidence to the contrary. Comparing
working/not-working responses with four other success indicators (acres preserved,
percentage of total land preserved, percentage of sending area preserved, and
transactions), this study finds that in each instance program administrator opinion is
related to tangible measures of success. Program administrators who believe the TDR is
successfully achieving program goals are statistically more likely to be involved with
TDR programs that are preserving more land than programs where administrators do not
believe that TDR is achieving its goals. In short, there is evidence presented here that
administrator opinion appears to be a reliable indicator of program success and that

administrators are forming opinions based in the objective measures of program success.

5.2 What makes a program successful?

Level
As discussed above, a higher level of government is Signiﬁcantly associated with

higher median acres preserved when acres preserved is measured in absolute terms. But
this ﬁnding does not hold for either of the normalized indicators (percent of sending area
preserved and percent of land area preserved). This suggests that the inﬂuence of the
level at which TDR is administered has more to do with the geography typically
associated with these levels. County government, particularly those in the western

United States, administer programs over thousands of square miles compared to localities

65

which administer TDR for much smaller geographic extents. With more acres to protect,
it is not altogether surprising that county TDR programs have preserved more land than
localities.

To some, part of the appeal of TDR as an instrument of land use policy is its
ﬂexibility. Because programs can be tailored to the needs of the communities they serve,
Johnston and Madison (1997) note that TDR is “versatile”, able to accommodate
“complex or relatively Simple designs according to the sort of program needed (p. 376).
Other researchers have asserted that level of government responsible for administration
of TDR can affect program success. Barrow and Prenguber (1975) suggest that programs
administered at the county level would be at a disadvantage insofar as a county planning
would have to structure a TDR program around the exigencies and complexity of a very
large real estate market or markets. An effective program would require accurate
forecasting and land use planning and the difﬁculty involved in accurately interpreting
patterns in real estate markets and predicting the locations of future urbanization could
potentially thwart efforts to use TDR to channel development toward socially desirable
outcomes across large geographies.

While conducting interviews, some respondents suggested that, quite to the contrary,
TDR programs should be administered at the county level. As some researchers have
argued, TDR can be complex, requiring substantial organizational resources that may
simply be beyond the means of local governments with limited staff and technical
resources (Wassmer, 2005; Pizor, 1987). In addition, for TDR to achieve goals of
directing urbanization away from prime agricultural land or pristine wildlife habitat and

toward existing urban centers, it may have to operate across and between the boundaries

66

of local jurisdictions. A TDR program administered by a county has more options for
locating receiving areas.

Results of the research presented above suggest that it may not be critical for TDR to
be administered by counties. Acre for acre, locally administered TDR programs have
preserved higher percentages of their land mass than have many of their larger

counterparts.

Mandatory vs. voluntary
As discussed above, the distinction between mandatory and voluntary TDR programs

is more nuanced than the two terms might imply. Mandatory programs do not require
landowners to transfer development rights, but they do require developers to use them.
Development rights may be required for all development (usually residential), they may
be required to increase densities beyond that allowed by current zoning classiﬁcations, or
they may be required to certain types of development. The highly successful program in
Pitkin County, Colorado, for example, requires development rights for newly constructed
single family homes and additional development rights for construction beyond square
footage speciﬁed in their zoning and building codes.

Another aspect of mandatory programs is that they tend to downzone sending areas—
signiﬁcantly. Doing so does not force a landowner to sell development rights, but makes
doing so much more attractive to the landowner than it would have been before
downzoning. Although less than 40 percent of programs in this study reported that their
programs had downzoned sending areas in connection with their TDR programs, several

respondents emphasized the importance of downzoning.

67

Both of these factors were used to operationalize the mandatory/voluntary variable.
Programs had to have downzoned sending areas while requiring TDRS for added density
in receiving areas—density could not be added in receiving areas using any others means
except for affordable housing exceptions. Mandatory programs did not exhibit any
statistical inﬂuence on the percentage of total land preserved; neither did downzoning
sending areas when analyzed separately. Requiring TDRS for adding density in receiving
areas, however, did demonstrate a statistically signiﬁcant inﬂuence on the percentage of
total land areas preserved. This coincides with literature that has often emphasized the
importance of properly siting receiving areas in order to take advantage of local real
estate market conditions and designing incentives that encourage developers to shift their
attention toward receiving areas capable of developing or redeveloping at higher
densities.

Purchase of Development Rights

Purchase of development rights programs are common throughout the United States
as a land conservation technique (Daniels, 2000; Daniels and Lapping, 2005; Machemer
and Kaplowitz, 2002). As such, they can be used to complement TDR programs to
maximize land preservation outcomes:

By utilizing PDR funds Strategically (e.g. purchasing conservation easements in a

ring or buffer zone), communities may use limited PDR funds to help maximize their

efforts to preserve open space, agricultural lands, and historic areas. TDR, with its
use of private funds and market pressures, can strengthen communities’ land
preservation efforts by placing additional conservation easements throughout a TDR

sending area, perhaps strengthening or widening the ‘buffer’. (Machemer and

Kaplowitz, p. 790)

68

Montgomery County, for example, has used its PDR program to create a buffer around its
agricultural reserve boundary line (p. 790).

In the New Jersey pinelands, on the other hand, TDR and PDR programs have not
been used in an integrated manner: despite the success of the TDR to preserve nearly
30,000 acres, PDRs had not been used within pinelands sending areas (p. 790).
Commenting on land preservation programs in Montgomery County and Southampton,
New York, Brabec and Smith (2002) argue that multiple strategies working in concert
with one another can achieve much better results than one technique alone (p. 264).
More recently Machemer et al. (in press) ﬁnd a statistically signiﬁcant relationship
between TDR programs operating in areas with PDR and program administrator opinions
of success.

Results of quantitative analysis in this study find no such statistical evidence to
support the opinion that TDR benefits from the operation of PDR within the same
community/jurisdiction. Responding to a question regarding the effect of PDR on their
TDR program, some respondents did suggest that PDR can be beneficial for several
reasons. One program administrator stated that PDR “compliments [TDR] by achieving
open lands in areas where the [TDR] program is not operational or where land owners do
not desire to use development rights." In another case the respondent suggested that the
effect work in the opposite direction: the respondent indicated that TDR ﬁlled in where a
county PDR program alone was unable to complete a system of continuous greenways
and blueways. Despite comments like these, programs with PDR did not preserve more

land than TDR programs Without PDR—at least not Statistically. The relationship

69

between PDR and TDR is a matter of ongoing consideration in the literature and in this
study, remains ambiguous.
TDR bank

Case studies and other TDR research often speak of the beneficial role played by
TDR banks. TDR banks, according to Machemer and Kaplowitz (2002), perform a
variety of functions including facilitating transactions of TDRS, acting as a buyer of last
resort, and strengthening program credibility with banking institutions (p. 789). The
highly successful Montgomery County program used a TDR bank to facilitate
transactions, matching potential buyers and sellers. In the Pinelands, two TDR banks
play very prominent roles in the administration, marketing, and implementation of the
Pinelands TDR program.

Respondents to the survey presented here also believed that TDR banks were
important for successful program outcomes. In at least two cases, respondents indicated
that TDR banks facilitated the launch of their TDR programs. Both programs have
preserved signiﬁcant amounts of land, and in the case of King County, Washington the
success of the program is undeniable. Through the TDR bank there, approximately
100,000 acres of land have been preserved and it is hoped that the banked development
rights can be used to create a self-sustaining preservation program as rights are sold to
private buyers. Another respondent expressed the opinion that TDR banks also provide a
Single repository for unbiased TDR information.

These statements closely correspond to ideas found in TDR research. In one of their
Studies of the TDR program in Calvert County, Maryland, McConnell and Wall (2003)

observed a strong relationship between market activity measured in terms of numbers of

70

transactions, rights transferred, and acres preserved and the activities of the County to
acquire and bank development rights. Others have referred to this function of TDR banks
as “priming the pump.” For McConnell and Wall, priming the pump by acquiring
available development rights supports greater market ﬂuidity and by giving buyers and
sellers conﬁdence in market prices.

Given the comments made by interviewees regarding the beneﬁts of TDR banks, and
the importance accorded to it in scholarly literature, it came as some surprise to the
author of this study that no signiﬁcant statistical relationship was observed between
programs with TDR banks and higher levels of preservation. Indeed, only 7 of the 35
interviewees responding to this question (the outlier was not considered in this test)
reported having a TDR bank. Only 3 locally administered programs used a TDR bank,
but one of them does possess the second highest number of acres preserved (898), the
third highest percentage of sending area preserved (23.21%), and the second highest
percentage of total land area preserved (7.09%). What is more, this program located in
Warwick, Pennsylvania is relatively new compared with its peers. What it has
accomplished in 14 has taken some of the other programs much longer.

Among county programs, King County, Washington and Calvert County, Maryland
were ranked ﬁrst and second in number of acres preserved. As mentioned previously,
both programs have TDR banks. Two other county administered programs with TDR
banks (Summit County, Colorado and Burlington County, New Jersey) also occupied
positions among the 10 ten “acres preserved” programs. Given these successes, it
appears that the difﬁculty ascertaining the value of TDR banks across a large number of

cases is not so much that TDR banks have failed to achieve higher rates of preservation

71

where it has been used, but rather the fact that it simply has not been used very often at

all.

Number of initiators
Several researchers have emphasized the importance of public support for TDR and

its goals and objectives (Pruetz 2007, 2003; Machemer et al. 2007). The cooperation of
farmers and other sending area landowners is crucial if there is to be an adequate supply
of development rights made available to developers in receiving areas. As discussed
above, the public support for TDR among receiving area residents is just as important
(and challenging) as ﬁnding receiving areas capable of absorbing higher density.
Initiators are individuals and groups who advocate for, support, and in some cases even
implement policy. In their recent study of TDR nationwide TDR programs, Machemer et
al. (in press) observe that 42.1% of programs indicated that “farmers and ranchers” were
among iniitators; 42.1% indicated that “non-farm landowners and residents” were among
initiators; perhaps surprisingly, 49.1% reported that “developers and builders” were
among initiators; 57.9% reported that “preservationists and non-proﬁt organizations”
were among initiators. And, as might be expected, a high percentage of respondents
reported that “government agencies, officials, and planners” were among program
initiators (p. 13).

Using a chi-square, their research finds a statistical relationship between the
participation of preservationists and public agencies/ofﬁcials/planners and program
success (as measured by program administrator opinion of program success. They also
identify a relationship the number Of initiators and opinions of success. In this case, 273

initiators were found to be statistically related to program administrators’ opinions of

72

success. These results suggest that in the case of public participation, more is not always
better—in least in an unqualiﬁed sense.

Results of a Mann-Whitney presented here support these findings. Programs
considered to be working by program administrators were associated with higher
numbers of initiators than programs that were identiﬁed as not-workingAccording to
Machemer et al., public support is important for TDR both as an indicator the value of a
resource to be protected as well as the political support for actions taken to protect those
resources.

Age of program

In a 2006 study, Wassmer found that time can affect the performance of urban
containment programs. For states like Florida which require vertically, horizontally, and
internally consistent growth management, a “IO—percent increase in the number of years
on the plan is expected to reduce the [size of a UA] by 0.4 percent [. . .] from what they
would have been without the state-imposed growth management regime” (p. 56).
Wassmer continues to state that for the “typical U.S. UA in year 2000, every lO-percent
increase in the years [a restrictive form of local urban containment] is present is expected
to decrease the urban area’s size by -0.12 (p. 56).

In the case of TDR and the effect of the length of time that a program has been in
operation, research presented in this paper suggests that there is some statistical
difference in program tenure between programs that are working and those that are not.
The signiﬁcance level of this difference does not allow for too much to be inferred (0.10
< p <0.05), but given the correspondence between this ﬁnding and existing literature

there is reason to pursue further study of this factor.

73

6 Conclusions
Many observers have commented on the increasing number of TDR programs

throughout the United States. Rick Pruetz estimates that 181 TDR programs currently
operate in 33 states. Though there is some question concerning an exact number, TDR
has undoubtedly contributed to efforts to curtail unplanned exurban growth, protect
natural resources and working landscapes, and (in a few cases) stimulate economic
growth and redevelopment of urban areas.

Nevertheless many questions regarding the characteristics of TDR programs have
gone unanswered despite a growing body of case study research. This is likely due to the
fact that few if any comprehensive, empirical investigations of TDR have been
conducted. Case studies have thoroughly examined a limited number of programs, but
have not engaged broader issues surrounding TDR. Because existing research has
avoided evaluating a larger sample of programs, very little is known about the vast
majority of the 181 programs identiﬁed by Rick Pruetz and others. Little is known about
how these programs operate, and how successful they have been at achieving their goals.
Without a better understanding of the programmatic features and outcomes of these
programs, TDR is open to the criticism that some 30 years after its conception it remains
experimental, unproven, and unreliable.

This study has attempted to directly address some of these issues. It has collected an
analyzed data from a larger number of programs representing diverse institutional,
geographic, ecological, and socioeconomic contexts, than previously attempted. It has
also sought to assess and recommend new methods with which TDR and other growth

management programs might be evaluated.

74

6.1 Key ﬁndings

What deﬁnes TDR success?
One of the primary purposes of this research is to “identify program features or

success factors that are statistically related to program success.” To do this, success
indicators had to be derived. Five different indicators were analyzed. Acres preserved is
the most commonly used measure, but this study finds that there are advantages to
normalizing this metric. In the case Of percentage of total land preserved or PTLP,
normalization allows disparate programs to be comparatively evaluated. This means that
larger samples of programs can be fairly and objectively analyzed. Researchers might
ﬁnally be able to learn and apply the knowledge gathered from the experiences of highly
successful programs like those in Montgomery and Calvert County, Maryland.

Another normalized metric is of some interest too. Percentage of sending area
preserved (PSAP) offers a greater degree of sensitivity to local conditions, preferences,
and land use choices. Sending areas, after all, should reﬂect the priorities and values of
the communities that designate them—they are an indication of the value placed on a
given preservation resource. Measuring program success as percentage of sending area
land preserved can reveal a lot about progress made in the direction of achieving goals
founded on these values. Unfortunately, it is not always easy to obtain accurate
measurements of sending areas and not all TDR programs designate them in the ﬁrst
place. This limits the utility of PSAP as a measurement that can be applied as broadly as
the percentage of total land area preserved.

Finally, recent research has used program administrator opinion and perception of

program performance as an indicator of success. Replicating to some degree past

75

research by Machemer et al. (in press), research presented here ﬁnds some justification
for using this as an indicator of success. Based on its relationship to the quantitative
measures just described, there is reason to believe that program administrators are
accurately judging the performance of their programs.

What makes a program successful?

Results of this study found statistical relationships between success factors and
indicators in only several instances: the number of program initiators, whether a program
allows added density through mechanisms other than TDR, and the age of the program all
demonstrated relationships with the percentage of total land preserved or working/not-
working response variables.

The importance of public involvement in TDR success has been argued in many
previous studies of individual programs (Tustian, 1983; Pruetz, 2007, 2003), and the
number of program initiators has been identiﬁed as a signiﬁcant variable affecting
program administrators’ opinions of program success in studies of larger samples of TDR
programs (Machemer et al., in press). This study further documents that relationship by
examining it against a quantitative measure of program success—percentage of total land
preserved.

While the mandatory/voluntary variable was not shown to be Signiﬁcant, one of its
two components was. Echoing comments made by program administrators in this study,
and the ﬁndings of past research, ﬁndings presented here did reveal a signiﬁcant
relationship between programs that only allow increased density through TDR and higher

percentages of land preserved. The converse of this is equally important: programs with

76

permissive policies that allow TDR to be circumvented are less successful at preserving
land.

Age of program is a new variable in TDR research, but one that has been examined
before in the growth management literature (Wassmer, 2006). Machemer and Kaplowitz
(2002), Machemer et al. (in press), and Pruetz (2003) discuss different historical waves of
TDR but the effects of the number of years that a program has operated had not been
examined before. Although the relationship between the number of years and whether
(according to responding program administrators) a program is working was only
signiﬁcant at p < 0.10, it provides some evidence that older programs are more
successful. Understanding why this is will have to be taken up in future research.

To the surprise of the author, several success factors were not found to be signiﬁcant
contributors to the performance of TDR programs. Both TDR banks and purchase of
development rights programs (PDR) have been discussed extensively in existing case
studies of individual TDR programs, and they are thought to be important for program
success factors. Much of the sentiment expressed by respondents to the survey presented
here coincide with this, but the hypotheses that TDR programs with banks and active
PDR programs are more successful than their counterparts could not be substantiated in
this study. At least in the case of TDR banks, this may simply be a result of the fact that
relatively few programs surveyed actually use banks. Despite the lack of a statistically
signiﬁcant connection between TDR banks and program success, programs with banks

feature prominently among programs preserving the highest percentages of land.

77

6.3 Policy implications

Information gathered through the survey contains several lessons for policymakers

and communities interested in pursuing TDR.

First, the value public involvement in designing and implementing TDR should not
be underestimated by communities pursuing TDR as a part their land use policy.
Rick Pruetz (2003) has even suggested that comprehensive plans be designed around
TDR. Whether TDR is introduced to a community through the comprehensive
planning process or not, planners and other public ofﬁcials should strive to engage
and educate the public if they want to build consensus around the program. Greater
involvement means a greater likelihood that TDR will succeed when disagreement
does arise.

Second, TDR programs need to consider the consequences of conﬂicting as well as
complementary policies. Much of the literature has focused on identifying other land
use management techniques that complement TDR in mutually supportive
relationships. But aside from a few researchers, most notably Rick Pruetz,
investigations of TDR have not addressed the negative effects of policies that enable
TDR to be circumvented or simply reduce the incentive for stakeholders to use it.
When designing a TDR program, policy makers need to seriously consider potential
effects of existing policies on the performance of TDR. TDR is fundamentally about
choices, and some of those will be difﬁcult but necessary to make.

Third, communities need to ensure longevity of their TDR programs and consistency
of operation over time. Whatever the exact nature of the relationship between
success and program tenure, responses from interviewees suggest that the success of

a program cannot be left up to the actions of one individual. People come and go,

78

but programs like TDR stay in place. If institutional knowledge is not passed from
one program administrator to the next, it will likely be lost and with it any chance for
successful outcomes. In several cases, contact made with a government agency or
department revealed that key personnel who were instrumental in constructing a
TDR program had left, and in their absence no one was able to respond to questions
or advocate for the TDR program. TDR needs to be institutionalized in way that

guarantees coherent administration well into the future.

6.4 Further Research

Limitations of this study
Response variable data used in this study presented challenges for statistical analysis.

The distributions of acres preserved nand the other indicators based on that data were not
normal. More importantly, there is a preponderance of “zero” data that makes
multivariate regression problematic. Future research can and should address this issue by
using “zero-inﬂated” regression. The technique facilitate more robust statistical analysis
of the relationships between response variables (land preservation) and success factors.
Leadership and institutional capacity

One of the themes that emerged in several interviews was the need to understand the
impact leadership and institutional or organizational capacity on program performance.
Past research has occasionally alluded to the issue of institutional capacity through
discussions of the economic efﬁciency of TDR. There is, perhaps, a belief that TDR
requires greater resources than some communities are able or willing to provide. And
indeed, highly successful programs do devote staff and other resources to implementing

well-crafted programs that are produced through meaningful (and probably resource

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intensive) public outreach and education as well as thoughtful design based on thorough

investigation of local real estate markets, environmental conditions, etc. .

Comparisons with other techniques

Pizor (1986) observes that it is not that TDR is a superior technique on its face, but it
may be one of the more ﬂexible, capable of adjusting to conditions that would thwart
others. Regulatory approaches alone are insufﬁcient. Downzoning alone may run amuck
of state and federal constitutions that are increasingly interpreted to protect private
property rights at the expense of the public interest. Communities may not be able to
afford to purchase conservation easements for everything that they need to protect.
Studies that offer comparisons of program performance for a variety of different land use
management techniques (like that conducted by Brabec and Smith, 2002) could improve
understanding of conditions and program components that make one strategy better than
another for a given set of circumstances.

6.5 Preserving T DR

Without a better understanding of TDR and its function across different geographic,
social, political, and economic environments, it becomes all too easy to dismiss TDR as
an innovation that has been ineffective in many cases. This study certainly documents
some serious deﬁciencies, but to conclude from those deﬁciencies alone that TDR is
somehow fundamentally unable to achieve results would be premature. While many
programs remain inactive, a good number have accomplished signiﬁcant results. The
underperfonnance of these programs does not sully the accomplishments of many Others.
This study has found that 36 programs of 50 programs reported a total of 149,276 acres

preserved. The acres, furthermore, were preserved without incurring the costs associated

80

with PDR or fee simple acquisition. Placing these successes in context is also important:
for programs with fewer resources and little undeveloped land to protect, even modest
successes can be quite impressive—especially for the people who live in those
communities. In the ﬁnal calculation of program performance, the ultimate measure of
success is the extent to which any program or set of policies fulfills the expectations of

those individuals.

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APPENDIX

82

2007 NATIONWIDE TDR SURVEY

INTERVIEWER: Matthew Brinkley DATE: _ _
TIME: _ _

 

RESPONDANT:

 

PROGRAM NAME: _ _
LOCATION: _ _
INTRODUCTION AND INFORMED CONSENT
Thank you for taking the time to answer our questions.

We are really interested to learn more about programs that transfer
development rights to manage urban growth, and your answers will help
us to better understand programs across the United States.

Any personal information you provide will be protected and kept
confidential to the furthest degree provided for by the law. Please feel
free to provide 05 much information 08 you feel is necessary to thoroughly
answer the questions.

At any point, if you have questions about the study that I can’t answer adequately
or to your satisfaction, you can contact Dr. Michael Kaplowitz at (517) 355-0101.
If you have questions or concerns about your rights as a study participant, please
contact Peter Vasilenko, Ph.D., Director of Human Research Protections, by
phone at (517)355-2180 or e-mail at: irb@msu.edu. I have Dr. Vasilenko’s
fax number [fax (51 7)432-4503] or mailing address if you would like those
too [202 Olds Hall, Michigan State University, East Lansing, MI 48824-1047].

We really wont to get on accurate and detailed picture of your program.
We’ll start with some questions about how you track TDR/TDCs, then the
background of your program, then we’ll talk about how your community
implemented the program, its characteristics. and lost I’ll have 0 few
questions about the results of your program.

1 Tracking

How are transfers, TDR transactions, and preservation for (NAME OF
PROGRAM) tracked or recorded?

83

GIS database

 

Other electronic database (including spreadsheets and
similar programs)

 

Planning documents (like reports)

 

Publicly recorded documents (council resolutions,
amendments to a comprehensive plan, ordinances, etc.)

 

Only the conservation easement is recorded

 

Other (describe):

 

Contact Information for individual responsible for maintaining
electronic tracking

Name:
ﬁﬂe:
Phone#:

Email:

84

2 Background

2.2When did the program begin? Month Year?
(IS THAT WHEN THE PROGRAM WAS ADOPTED? OR THE DATE OF THE FIRST
TRANSFER? WHAT WAS THE DATE OF THE FIRST TRANSFER?)

2.3Was pressure to develop RESIDENTIAL / COMMERCIAL / AGRICULTURAL
land INCREASING? STEADY? DECREASING?

Now, I'd like to talk with you about how your community implemented the

program.

3 Implementation

3.2 Different communities use different legal or regulatory foundations for
TDR, a local ordinance, a comprehensive plan, state or regional
legislation, etc. How about your program?

85

3.3l’m learning that during the process of creating TDR programs, different
groups are often responsible for initiating TDR in their communities. I’m
going to mention the names of a few groups. Please let me know if
any or all of them were initiators.

Farmers/ranchers?

 

Land owners/residents?

 

Land developers/builders?

 

Environmentalists/preservationists/land conservationists?

 

Government agencies/officials/planners?

 

Was any one of these groups more responsible for initiating the
program than the others? Have we missed anybody?

86

(Implementation cont.)
3.4 Different communities sometimes use different kinds of studies to design
their TDR programs. Did your community use

Land use/land cover change, build-out analysis

 

Environmental assessment?

 

Community opinion surveys, focus groups?

 

Housing market forecasting, economic forecasts, demographic
forecasts?

 

Others?

 

3.5 (ONLY IF STUDIES WERE USED) And do you know who conducted these
studies?
PLANNING AGENCY STAFF ALONE/ PLANNING AGENCY STAFF AND
CONSULTANTS/CONSULTANTS ALONE

Anyone else?

87

(Implementation cont.)

3.6TDR programs are often intended to address all sorts of land use issues.
I'm going to mention a few sets of objectives or goals, let me know if
any these describe your program. Was your program intended to

Preserve the character of rural communities, preserve agricultural land
and open space?

 

Preserve historical sites?

 

Protect wetlands, wildlife habitat, ground/surface water quality?

 

Direct population growth toward existing urban communities, increase
variety of residential settings, achieve efficient use of existing
infrastructure, balancing development over an entire
jurisdiction/metro/region?

 

Create affordable housing?

 

Was one of these more important than the others?

 

3.7 (ONLY IF YOU HAVE INDICATED THAT YOUR COMMUNITY HAS A
COMPREHENSIVE LAND USE PLAN) Are any of these objectives
addressed in your community’s comprehensive land use plan? (If
possible, please Indicate in which section/chapter they might be
found)

88

(Implementation cont.)
3.8Is a TDR bank part of your TDR program? Y / N

3.9 How does the TDR bank work?

3.10 And in your opinion, what if anything is the impact of the TDR
bank on your program?

89

Now I’d like to talk a little about the characteristics of the areas where
your community transfers development rights from -- the sending area or
preservation zones.

4 Sending Area Characteristics

4.2What was the total size of the area designated as the sending area(s)
when the TDR program began? Acres
Square Feet

 

4.3Has your program determined total potential development rights for
each sending area?

NO, my program determines/allocates development rights/credits at
the request of a landowner/developer/etc.(SKIP TO 4.6)

4.4lf yes, how many development rights were originally allocated to these
sending area(s)?

 

4.5And do you know how the rights were allocated?

4.6To date, how many TDRs have been transferred? (HOW MANY
INDIVIDUAL TRANSFERS, HOW MANY UNITS OR RIGHTS)

# Rights or Units (please specifiy appropriate unit):

 

 

# Transactions:

4.7 And do you know how many acres/square feet have been preserved
in the sending area/preservation area?

4.8 How was the sending area zoned before your program began?

And after?

(Sending Area Characteristics cont.)

4.9(ONLY IF YOUR COMMUNITY HAS A COMPREHENSIVE PLAN) Is the
sending area or areas designated in your community’s comprehensive
land plan? (If possible, please indicate in which section/chapter they
might be found).

90

Now I’d like to talk a little about the characteristics of receiving areas in
your TDR program.
5 Receiving Area Characteristics
5.2When your program (began, what was the size of the receiving
area(s)?
# Acres:

 

# Square Feet:

 

5.3 How was/were the receiving areas zoned before your program
began?

And after it began?

5.4ls TDR the ONLY way for developers to obtain greater density? Please
explain.

5.5How many TDR development projects have been initiated/completed
in receiving areas using TDRs?

 

How many TDR rights or credits have been used in those projects?
/project
total

5.6 (ONLY IF YOUR COMMUNITY HAS A COMPREHENSIVE PLAN) Is the
receiving area or areas designated in your community’s
comprehensive land plan? (If possible, please indicate in which
section/chapter they might be found).

9]

Now that we’ve discussed a few of its characteristics, I’d like to ask you
about some of the features of your TDR program and other land
conservation/growth management programs in your community — like
PDR for instance.

6 Complementary Programs

6.2ln some communities, TDR programs accompany other programs that
preserve land by purchasing development rights. Is there any kind of
PDR (or purchase of development rights) program in (NAME OF
COMMUNITY)?

6.3 (IF YES) In your opinion, what if anything is the impact of the PDR
program on your TDR program?

92

O.k., we’re almost finished. Your comments have been really interesting: I
just have a couple more things I’d like to ask you about how your program
isdomg.

7 Measures of Success
7280 in your opinion, is your TDR program working?

Is there any one thing that you could change to improve the program.
what would it be?

That concludes the survey. Again, I’d like to thank you for taking time out
of your busy schedule to assist me with this research. Please include any
additional comments here.

Again thank you very much. When the results of our research are
published eventually, we will be happy to make a copy available to you.
If you think of anything else that you want to add, or have any questions.
don't hesitate to contact me at Brinklev@msu.edu or you can contact Dr.
Michael Kaplowitz at.

93

Works Cited

94

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