TRANSFERRING DENSITY AND DEVELOPMENT RIGHTS

PRINCE GEORGE’S COUNTY OVERVIEW Creating an effective TDR Program Creating an effective TDR Program Steps involved in setting up a TDR Program Steps involved in setting up a TDR Program

PRINCE GEORGE’S COUNTY AN EFFECTIVE TDR PROGRAM Separates the development value of land from the residual or farm value of land Separates the development value of land from the residual or farm value of land Uses private sector funds to preserve land Uses private sector funds to preserve land Redirects growth to places more suited to growth Redirects growth to places more suited to growth Helps protect critical farms and open space. Helps protect critical farms and open space. Low density zoning doesn’t preserve land! Low density zoning doesn’t preserve land!

PRINCE GEORGE’S COUNTY TDR PROGRAM Establishing a TDR Program involves the following steps: Establishing a TDR Program involves the following steps: Designate Sending and Receiving Areas Designate Sending and Receiving Areas Prepare a Market Study Prepare a Market Study Designate Transfer Ratios Designate Transfer Ratios Establish mechanisms for transferring development rights Establish mechanisms for transferring development rights Establish administrative procedures to track TDRs Establish administrative procedures to track TDRs Write implementing legislation Write implementing legislation

PRINCE GEORGE’S COUNTY SENDING AREAS Sending Area Size Sending Area Size If Sending Area is too large, there will be insufficient Receiving Areas to use the TDRs. If Sending Area is too large, there will be insufficient Receiving Areas to use the TDRs. If Sending Area is too small, Receiving Area developers may be discouraged from purchasing TDRs. If Sending Area is too small, Receiving Area developers may be discouraged from purchasing TDRs.

PRINCE GEORGE’S COUNTY RECEIVING AREAS Receiving Area Location and Size Receiving Area Location and Size Adequately sized to create an active market Adequately sized to create an active market Must have development potential Must have development potential Additional density must be compatible with neighborhood character Additional density must be compatible with neighborhood character Demand for higher density development Demand for higher density development

PRINCE GEORGE’S COUNTY MARKET STUDY Determines the value that TDRs will likely have, given local conditions and real estate markets Determines the value that TDRs will likely have, given local conditions and real estate markets Helps to determine viability of the program Helps to determine viability of the program Gives direction for establishing Sending and Receiving Areas Gives direction for establishing Sending and Receiving Areas

PRINCE GEORGE’S COUNTY MARKET VALUE Raw Land Value vs Lot Value Raw Land Value vs Lot Value RAW LAND value is a fraction of total Lot value RAW LAND value is a fraction of total Lot value Lot value includes engineering costs, development costs, carrying costs, risks and profits. Lot value includes engineering costs, development costs, carrying costs, risks and profits.

PRINCE GEORGE’S COUNTY TRANSFER RATIOS Transfer ratio is the amount of development that may occur on a Receiving Area site based on the purchase of a Development Right. Transfer ratio is the amount of development that may occur on a Receiving Area site based on the purchase of a Development Right. Example: 1 development right per 5 acres in Sending Area increases density in Receiving Area by 1 dwelling unit per acre. Example: 1 development right per 5 acres in Sending Area increases density in Receiving Area by 1 dwelling unit per acre. Development Right

PRINCE GEORGE’S COUNTY DESIGNATE TRANSFER RATIOS A 1:1 ratio is the simplest. A 1:1 ratio is the simplest. It is also least effective. It is also least effective. Most successful programs allow rights to transfer at a ratio greater than 1:1 to create an incentive in the Sending Areas. Most successful programs allow rights to transfer at a ratio greater than 1:1 to create an incentive in the Sending Areas.

PRINCE GEORGE’S COUNTY TRANSFER MECHANISMS Private Transactions Private Transactions Simultaneous sale and purchase of rights. Simultaneous sale and purchase of rights. Commodity-based TDR Systems Commodity-based TDR Systems County issues TDR certificates. Developers purchase at negotiated price. County issues TDR certificates. Developers purchase at negotiated price. TDR Bank with Public Purchases of TDR TDR Bank with Public Purchases of TDR County establishes bank. Bank provides a reliable market, simplifies developer’s task of finding transferable density. Creates revolving fund for future development right purchases. County establishes bank. Bank provides a reliable market, simplifies developer’s task of finding transferable density. Creates revolving fund for future development right purchases.

PRINCE GEORGE’S COUNTY Another Mechanism Density Transfer Charges. Sending Area landowners pay a fee in lieu of transferring development rights. Density Transfer Charges. Sending Area landowners pay a fee in lieu of transferring development rights. Fee is held in a separate fund and is used to purchase development rights in the Rural Tier. Fee is held in a separate fund and is used to purchase development rights in the Rural Tier. Technique provides flexibility but involves up front work to calculate fee amounts. Technique provides flexibility but involves up front work to calculate fee amounts.

PRINCE GEORGE’S COUNTY PROGRAM ADMNISTRATION Administration includes tracking and recording TDR sales, Sending Area restrictions and Receiving Area rights. Administration includes tracking and recording TDR sales, Sending Area restrictions and Receiving Area rights. MD law requires the County to designate zoning districts where TDRs can be used. MD law requires the County to designate zoning districts where TDRs can be used.

PRINCE GEORGE’S COUNTY TDR ORDINANCE Final step is drafting and adopting a TDR Ordinance. The Ordinance will set forth: Final step is drafting and adopting a TDR Ordinance. The Ordinance will set forth: Procedures to be used to accomplish density transfers, including recordation requirements; Procedures to be used to accomplish density transfers, including recordation requirements; Allowable use of lands subject to conservation easements; Allowable use of lands subject to conservation easements; Conversion ratios for residential and non- residential uses; and Conversion ratios for residential and non- residential uses; and Other development standards as deemed appropriate. Other development standards as deemed appropriate.