Criteria for a Successful TDR Program The Feasibility of Successful TDR programs report. ¹

Based on the findings from TDR Program Profiles in Maryland, New Jersey and Washington State, and an earlier draft of Measures of a Successful TDR Program reviewed and discussed by the principal investigators with the Technical Advisory Committee, the following key criteria were developed and used in evaluating the feasibility of successful TDR programs in selected Eastern Shore counties. A summary checklist of these criteria was developed, applied to each of the counties in the Eastern Shore assessment area and included as an attachment to each of the TDR Program Assessments. Three counties had existing TDR programs, Caroline, Queen Anne’s and Talbot, but Caroline’s has been revised and reenacted. These criteria could be used to help other counties evaluate ways to improve existing programs, or to help those counties that are designing new TDR programs avoid problems that have inhibited program performance in some Maryland counties. These criteria are listed generally in the order that the principle investigators believe are most important to TDR program success.  It is unlikely that any county will have a perfect program, or a 100% score when measuring their TDR program with these criteria.  However, those that cannot meet many of these performance measures are unlikely to have success, and some criteria tend to be more essential than others. 

I will tell you that the current TDR statute has some flaws that hinder its utility. The largest of these is the absence of a 'bank'. Currently, the seller of development rights and the buyer must proceed 'arm in arm' to the courthouse in order to complete the transaction. That, coupled with an extended approval process, can affect the value of the development right to the detriment of the buyer or sell. In addition, the receiving area must be 'up zoned' to allow for higher densities from the beginning of the process even before the first transaction occurs. In localities where voluntary proffers of facilities or cash are accepted, this initial zoning by the governing body for higher densities would prevent the acceptance of any proffers. Finally, there are general concerns about 'Not In My Backyard' where property owners may be concerned by a receiving area allowing for higher density development than what currently exists on adjacent tracts. The Commonwealth is well aware of these and other problems and the 2008 General Assembly has established a joint subcommittee headed by Delegate Lohr of Rockingham County to review the current law and to examine ways to make the program more attractive to local governments. As far as experts, I can give you the names of individuals to whom I have talked to in Maryland, but there are few, if any, Virginia sources. Ted McCormack, VACO

The Virginia Institute for Public Policy’s latest publication The Real Story of Eminent Domain in Virginia: The Rise, Fall, and Undetermined Future of Private Property Rights in the Commonwealth, details amazing abuses of Virginians’ property rights; exposes legislators who stop every effort at eminent domain reform while their law firms make hundreds of thousands of dollars from the state’s largest condemners; and recommends what must be done to protect the property of the citizens from the special interests and those who do their bidding in state and local government. Virginia Institute for Public Policy 7326 Early Marker Court • Gainesville, VA • 20155 (703) 753-5900 • Fax: (703) 753-1900 • JTaylor@VirginiaInstitute.org

Successful TDR Programs are characterized by the following features:

1. TDRs have sufficient value to buyers and sellers to sustain an active market to accomplish preservation goals. They are characterized by:
• A balance of supply and demand for TDRs has been created in the design of the TDR program.
• Receiver areas are large enough to absorb authorized TDRs.
• As-of-right base density in TDR receiving areas is zoned lower than the market demand for the type and density of housing that developers want to build.
• Developers in TDR receiver areas can achieve the desired market density only with TDRs.
• Density bonuses for using TDRs are sufficiently high to justify the increased cost of purchasing TDR.
• Buying TDRs is more profitable to developers than building to base density or alternative ways to achieve higher density in receiver areas.
• Purchasing TDRs and the public approval process of using them in receiver sites is faster and more predictable than alternative ways to achieve the desired density.
• Selling TDRs is reasonably competitive in value to landowners, considering the residual value of land restricted by TDR easements or covenants, with developing the sending site, selling an easement to other state or local PDR programs, or is the only alternative zoning allows.
• There is an active market for higher density housing types allowed with TDRs in receiver areas.
• The county takes steps to maintain TDR values that are attractive to buyers and sellers by adding TDR receiver capacity, purchasing TDRs, adjusting the TDR allocation rate (amount of TDR/acre or du/TDR), allowing TDRs for increases in non-residential floor area, or other means.
5. The County has strong Comprehensive Plan and Zoning policies that support use of TDRs
• The TDR program is established as part of a larger strategy to preserve land and redirect growth.
• Goals are established in the Plan for the types, location and amount of land to preserve.
• TDR sending areas are designated to protect the most valuable rural land, unique natural and historic resources, or other resources in the Plan’s protection goals. 
• TDRs are received only where the county and municipalities want development to occur.
• TDRs will not add new residences where they will contribute to the fragmentation of the best agricultural lands, conflict with existing farming operations or contribute to a sense of impermanence of farming in the community.
• TDRs help mitigate the perceived effects of downzoning, help gain support from landowners, and help avoid litigation over rezoning actions.
• Zoning limits or prohibits the use of development rights on the sending site, and reduces the as-of-right base density in receiver sites below the level of market demand.
• Zoning provides for additional density needed to accomplish comprehensive plan goals in receiver areas, only or primarily with the use of TDRs.
• The county adopts a policy that future increases in zoning density in receiving areas is allowed only with TDRs, until land preservation goals are met.
• County water and sewer plans anticipate and plan for development in receiving areas at the density needed to accommodate TDRs.
• Subdivision rules and procedures ensure that receiving area infrastructure is capable of absorbing development with TDR bonus density, including water and sewer service, septic systems, schools and roads.
4. Administration of TDRs is simple, efficient and predictable
• Buyers of TDR can obtain all approvals for their use in receiver sites with certainty and predictability, and can use TDRs for additional density as-of-right in receiver projects.
• Buyers and sellers of TDR are provided clear rules for use of TDRs in receiver areas and restrictions on using development rights on sending site.
• Buyers and sellers of TDR are informed about the current market values of TDRs.
• Receiver areas for TDR are designated and zoned for densities needed to absorb TDRs, without uncertain discretionary or conditional use review.
• TDRs are allowed on a gross land area basis; the number of TDRs authorized for sale is not reduced by environmental conditions for development on the sending parcel. 
• Arbitrary rules limiting the transfer or use of TDRs are avoided (e.g. distance between selling and receiver sites, use of TDRs in the same political districts, etc.).
• Special rules for development in receiver areas do not discriminate against TDR projects.
• Land records, mapping and administration of TDRs are complete, maintained and publicly accessible.
• Restrictions on TDR sending sites are permanent, recorded in land records, used in the subdivision and zoning approval process, and sending sites are monitored for compliance.
• Lengthy delays in recording and using TDRs are avoided.
• Local government monitors and modifies TDR program as needed to improve effectiveness and efficiency, and adds receiving areas or increases their TDR capacity as needed to maintain demand.
5. The TDR program has broad public support.
• Rural landowners are motivated to protect land and farming as an industry, more than by profit from selling land for development; and they support TDRs, easement purchase programs and zoning to preserve agricultural uses.
• Real estate developers support TDRs to obtain increased density in receiving areas, and as a flexible and expedient alternative to purchasing additional land.,
• Farming, community and environmental groups support TDRs as one means to protect more land.
• TDR receiving site communities accept or support the density, design quality and compatibility of development using TDRs.
• Elected government officials accept TDRs as a viable method to protect land with private funds, protect the equity of rural landowners, control the location and quality of growth and implement the comprehensive plan.