1. Transfer of Development Rights
TDR
Smart Growth / Smart Energy Toolkit

2. Underdeveloped Commercial Centers Overdeveloped Residential Sprawl
Development patterns based on conventional zoning create less than optimal conditions
Underdeveloped Commercial Centers
Overdeveloped Residential Sprawl

3. Transfer of Developments Rights Two-Fold Objective
Concentrate Development in Growth Centers
Preserve Existing Open Space

4. TDR Definitions Development Rights Sending Areas
The amount of development that could take place on a tract of land under Zoning Bylaw provisions.
Sending Areas
Areas identified as priorities for preservation or significant decreases in development potential.
Development Rights are part of a larger bundle of rights vested in property including right to sell, access, lease, farm and bequeath. These rights can be bought and sold.

5. TDR Definitions (continued)
Receiving Area
Areas that have potential to support more development than what is allowed by existing bylaws and/or regulations.
TDR Credit Bank
A third party entity that can store and administer the sale of development rights.
TDR Banks can be an efficient way to facilitate land preservation and development right purchase and sale. Often in the TDR process, the timing of different elements is not “in sync”. The seller may wish to move away, for example, before there is a development opportunity identified in the receiving area. Or a Town may wish to purchase development rights without having a developer in place to use them in the receiving area.
TDR credit banks are not specifically addressed in Massachusetts legislation. Communities that choose to implement this provision will need to create or identify an existing agency that can act as a third party “storehouse” for these development rights. This party would be vested with the right to act without the approval of Town Meeting and would be responsible for valuing the development rights that are in storage.

6. Transfer of Developments Rights
The Concept
Owner of “sending” parcel sells development rights in exchange for permanent conservation easement.
growth area
preservation area
Owner of “receiving” parcel buys development rights to build at densities higher than allowed under base zoning.

7. Potential Sending Areas
Prime Agricultural Lands
Chapter 61 parcels
Large Tracts of Unprotected Open Space
Aquifer Protection Overlays
Areas of Critical Environmental Concern
Habitat for Rare and Endangered Species
Watersheds to Sensitive Surface Waters
Historic Districts or Structures

8. Potential Receiving Areas
Village Centers
Transportation Nodes
Commercial or Industrial Districts
Areas Served by Infrastructure
Centralized Water Supply
Centralized Sewer System
Public Transportation Routes

9. Sending and Receiving Areas Should Be Identified Through A Comprehensive Planning Process
Sending and Receiving Areas should be identified through a comprehensive outreach process. Do not leave anyone out of these discussions. As these districts will have to pass Town Meeting or City Council vote, it will be critical to garner support for higher densities in the community, which is often a politically charged topic.

10. TDR: Alternative Futures?
The future with conventional zoning
The present
The future with TDR zoning
The future

11. Implementing TDR The Basic Questions
Clearly Defined Sending and Receiving Areas
“What are the resources we need to protect?”
“Where can we handle increases in development capacity?”
Adequate Administrative Capacity
“Do we have a permitting body that clearly understands the program?”
“Do we need a TDR Credit Bank?”
“Will the City/Town play a role in establishing the value of development rights or will the market be used to establish value?”

12. Montgomery County, Maryland
CASE STUDY
Sending Area identified as 90,000 acres of undeveloped agricultural land. Area down-zoned from 5-acre minimum lot size to 25-acre minimum. Development rights can be traded at the original density.
Receiving areas identified by proximity to existing infrastructure. Density bonuses awarded at varied scaled depending on the location of the Receiving Area.

13. CASE STUDY Seattle, Washington YMCA Building Restoration
Paramount Theater
Restoration
Seattle, Washington
YMCA Building
Restoration
Complex urban TDR Program relies heavily on a TDR Credit Bank to facilitate transactions.
Primary goals:
Preserve Historic Structures
Preserve Existing Affordable
Housing
Incentives for Varied Building
Scale
Infill Development of Compatible
Character
W Hotel Development

14. CASE STUDY Falmouth, MA Sending Areas Identified through
Careful Planning Process:
Water Resource Protection District
Chapter 61A Parcels
Areas of Critical Environmental Concern
Coastal Resource Overlay District
Receiving Areas are eligible for Density Bonuses that vary between 20% to 40% depending on the underlying zoning

15. USEFUL LINKS:
government.cce.cornell.edu/doc/html/Transfer%20of%20Development%20Rights%20Programs.htm
TDR Programs: Using the Market for Compensation and Preservation, a paper written by Jason Hanly-Forde, George Homsy, Katherine Lieberknecht, Remington Stone that gives a good overview of this technique.
Transfer of Development Rights Report‘, a study produced for the South County Watershed Technical Planning Assistance Project by the Rhode Island Department of Environmental Management. It is one of several reports about creative land use techniques to accommodate growth while minimizing impacts to the environment and community character.
A Fact Sheet from the Farmland Information Center, a public/private partnership between the American Farmland Trust and the USDA Natural Resources Conservation Service.

16. USEFUL LINKS: www.lincolninst.edu/pubs/pub-detail.asp?id=424
Transfer of Development Rights for Balanced Development, an article (author Robert Lane, 1998) from the Lincoln Institute of Land Policy providing conceptual overview as well as some details regarding TDR case law.
TDR: How Does It Work?, a webpage from the NJ Department of Community Affairs' Office of Smart Growth, provides a good overview of the technique.
New Jersey State Transfer of Development Rights Bank webpage from the NJ Department of Agriculture.
Pinelands Development Credit Bank webpage from the NJ Department of Banking and Credit gives information about a program begun in 1985 which has helped increase the value of development rights and assisted owners in selling their land.