Transfer of Development Rights in Santa Barbara County
July 2007
The following, in question and answer form, is a brief introduction to the planning tool “Transfer of Development Rights” (hereafter TDR).
What is TDR? Transfer of development rights refers to a method for protecting land by transferring the rights to develop from one area (the “sender site”) to another, more appropriate property (the “receiver site”). The TDR program proposed for Naples would transfer develop rights from an officially designated rural area to an appropriate urban areas that voluntarily chooses to participate in the transfer.
TDR offers communities a low-cost, politically acceptable way of permanently preserving sensitive areas, farmland, historic landmarks and other important resources. It uses market incentives to encourage the voluntary redirection of development away from places that a community wants to save, called sending areas, and toward places that a community wants to grow, called receiving areas. When the owners of sending area land elect to record a permanent easement on their properties, they are allowed to sell a marketable commodity called transferable development rights (TDRs) as reimbursement for the resulting reduction in property value. Receiving area developers purchase these TDRs to achieve higher, more profitable levels of development. When TDR works, landowners are able to liquidate the development potential of their properties, often while still retaining fee ownership and enjoying non-development income as well. Developers achieve higher profits despite the extra cost of buying TDRs. And communities are able to permanently implement their land use plans using little or no tax money.[1]
Are there variations in TDR programs? Yes, many. Some programs preserve open space; others are geared toward environmentally sensitive habitat areas; and others are directed toward historical landmarks. There are many variations in the operation of programs as well. Some require that a receiving site developer take initiative to find sending site owners that wish to sell TDRs, while other programs provide an intermediary (such as a Land Trust) that acts as a TDR bank in brokering the exchange of TDRs.
Where have these programs been implemented? In many localities throughout the United States (“Beyond Takings and Givings” lists 134 communities with programs, including San Luis Obispo, Malibu, Oxnard , Pismo Beach, Los Angeles and San Francisco.)
Have the programs worked to accomplish their goals? Yes, when appropriately designed. A program with an inadequate design (in general, one that does not provide enough incentives for both sending and receiving sites) may be little used.
Has TDR been used in Santa Barbara? Yes, the City of Santa Barbara has a limited program that transfers development from older commercial buildings that were going to be demolished and replaced by smaller conforming buildings to receiving sites that would then not be subject to the cities annual growth cap. The program has been used only occasionally.
What might be sending and receiving sites within the County? In general terms, sending sites might be areas like the Gaviota Coast where there is a desire for limiting development, while receiving sites would generally be within urban boundaries. Identification of receiving sites can be, frankly, a political hot potato. The Naples Coalition has proposed an ordinance that would allow for receiving sites within urban boundaries (subject to selection criteria) only when those sites were otherwise proposed and approved for upzoning. It is not the desire of the Coalition to be supportive of increases in density without voluntarily community approval.
What is an example of a successful TDR program? San Luis Obispo has two programs, one in Cambria and a second County-wide program. In Cambria, the program moves development away from small steep lots and allows larger development on acceptable lots. The credits are brokered by the San Luis Obispo Land Conservancy. 230 lots have been removed from development and 85000 square feet of floor area credits have been purchased.[2]
How would a TDR program be started within Santa Barbara County? While existing planning boards and commissions can be charged with designing a program, a typical practice is for a jurisdiction (or multiple jurisdictions) to establish a Citizens Advisory Committee to do the research and fact finding and program evaluation that precedes adoption of a program. The committee should include representatives from interested parties (property owners and developers and community activists). It is important to understand that support by the County and Cities within the County of the Advisory Committee is not a commitment to any TDR program, but only the process of researching and developing a program to be considered by the appropriate governing bodies.
The County, however, has jumpstarted this process a bit in that there has been a TDR working group that has met several times over the last year. The results of that working group (facilitated by the consulting firm Solimar) will be presented to the Planning Commission shortly. While the Naples Coalition has participated in the conversation, we believe there are severe limitations to what has been developed to date, and that much work remains to be done. The Coalition will be presenting to decision-makers an approach to TDR at Naples that enhances the very limited proposal that Solimar has developed.
Are there special considerations in terms of TDR at Naples? Yes. Some years back the County established a specific Land Use Policy (LCP 2-13) that says:
“The existing townsite of Naples is within a designated rural area and is remote from urban services. The County shall discourage residential development of existing lots. The County shall encourage and assist the property owner(s) in transferring development rights from the Naples townsite to an appropriate site within a designated urban area which is suitable for residential development. If the County determines that transferring development rights is not feasible, the land use designation of AG-II-100 should be re-evaluated.”
It is the position of the Naples Coalition that this policy commits the
County to actively pursuing TDR at Naples, and that a rezoning can only follow
a determination of infeasibility of TDR.
As was demonstrated in an earlier feasibility study by Solimar, TDR at
Naples is at least partially feasible.
The implications of this are complex and will require the complete
commitment of all of us to ensure that the vision of preserving the rural
character of the Gaviota Coast is accomplished.
What are the benefits of a TDR program?
If done properly, with adequate safeguards and community involvement,
valuable resources such as open space, views, productive agricultural land,
environmentally sensitive habitat, and beaches can be preserved. A TDR program
offers the opportunity for all parties to benefit; the developers retain and
benefit from their economic interests, the public preserves valuable resources,
and government acts as a proper steward.