Transfer of Development Rights (TDR) programs use market forces to simultaneously promote conservation in high value natural, agricultural, and open space areas while encouraging smart growth in developed and developing sections of a community. Successful TDR programs have been in place throughout the country since 1980, and have protected tens of thousands of acres of farmland and open space.

Description

In a TDR program, a community identifies an area within its boundaries which it would like to see protected from development (the sending zone) and another area where the community desires more urban style development (the receiving zone). Landowners in the sending zone are allocated a number of development credits which can be sold to developers, speculators, or the community itself.

In return for selling their development credits, the landowner in the sending zone agrees to place a permanent conservation easement on his or her land. Meanwhile, the purchaser of the development credits can apply them to develop at a higher density than otherwise allowed on property within the receiving zone.

Considerations

TDR programs have the advantage of using free market mechanisms to create the funding needed to protect valuable farmland, natural areas, and other open space. However, many people find TDR programs complex and administratively challenging, requiring the local unit of government to make a strong commitment to administering a potentially complicated program and educating its citizens and potential developers. TDR programs must be combined with strong comprehensive planning and local controls in order to be successful.

Where it is Working

Boulder County, Colorado has one of the more extensive TDR-related pages on the World Wide Web. The Boulder County TDR page, includes sections on general definitions, non-urban planned unit developments and TDRs, sending sites, receiving sites, and the TDR exchange process.

Montgomery County, Maryland, near fast growing Washington, D.C. , established its TDR program in 1980. By the end of fiscal year 1997, the TDR program had protected 39,180 acres (out of a total sending area of 89,000 acres) under protective easement.

Prior to 1980, the county lost an average of 3,500 acres of farmland per year to development. In the first decade following the establishment of the TDR program, the county lost a total of 3,000 acres to development, a drop of approximately 92%.

The New Jersey Pinelands, an environmentally unique and sensitive area of about one million acres, was targeted for protection through The New Jersey Pinelands Protection Act of 1979. The Pinelands Commission, the regional land use authority, established a TDR program in 1980 which had protected 5,300 acres by 1991.

The website maintained by the New Jersey Pinelands Commission includes an article describing the history of the Commission's TDR program, as well as answers to many program-related questions (such as what are the benefits and costs of a TDR program). See additional comments about Pinelands.