This article reviews the relevant state statutes and case
law on transfer of development rights (TDR), examines existing TDR programs,
and extracts from these sources the basic elements of a potentially successful
TDR enabling statute. A model statute, based on these elements and prepared as
part of the Growing SmartSM project, is also included.
Some call it making money out of thin air. Others think of it as getting
what they rightly deserve. Transfer of development rights (TDRs) means shifting
the future development potential from one piece of property to another piece of
property. Local and regional governments use TDRs to preserve historic
structures and to protect agricultural lands, forest lands, and open space.
The fundamental legal issue with TDRs is the claim that they constitute a
taking without adequate compensation. Whenever the use of a parcel of land is
prohibited or severely restricted, the local government opens itself up to a
claim that the land owner has suffered a regulatory taking. A regulatory taking
exists when, by some regulation of the property, a government forbids or
precludes any and all economically viable use of the property.
The original thinking behind TDR was to mitigate the economic impact of
extensive or total restrictions on the owner's use of land. However, the
existence of a TDR program does not always prevent takings claims, and the
local government must be prepared to respond to such challenges.
TDRs IN THE COURTS
There have been two major cases concerning TDR before the U.S. Supreme
Court: Penn Central Transportation Co. v. City of New York in 1978, and
Suitum v. Tahoe Regional Planning Agency in 1997.
In the first case, Penn Central Transportation Co. owned Grand Central
Terminal, which was a landmark under the City of New York's Landmarks
Preservation Law. Under the ordinance, the city Landmarks Preservation
Commission designates landmark buildings and districts, and property owners
must keep the exterior features of the building in good repair. The commission
must approve any proposal to alter the landmark's exterior architectural
features, including improvements. The ordinance also provides that unused
development rights can be transferred to lots on the same block or across the
street, or to nearby lots under the same ownership.
Penn Central also owned several neighboring hotels and office buildings
along Park Avenue, at least eight of which were eligible receive development
rights from the Grand Central Terminal under the ordinance. The company was
twice denied permission by the Landmarks Commission to build a 50-plus story
office building atop the terminal, on the grounds that the skyscraper was incompatible
with the turn-of-the-century design of the terminal. The company brought suit,
challenging the landmark designation and the denial of permission to build as a
taking.
The Court found there was no taking. First and foremost, the "objective
of preserving structures and areas with special historic, architectural, or
cultural significance is an entirely permissible governmental goal."
Second, the company was not denied economically viable use of the property, the
Court held, because it was viable as a railway station with leased commercial
space. The company's investment-backed expectations were not thwarted by denial
of permission to build the office tower, because their reasonable expectation
was in the existing railway station.
Though the Court did not directly address the topic of transferable
development rights, because it found there was no taking, the Court said,
...it is not literally accurate to say that they have been denied all use of
even those pre-existing air rights. Their ability to use these rights has not
been abrogated; they are made transferable to at least eight parcels in the
vicinity of the Terminal Ö While these rights may well not have constituted
"just compensation" if a "taking" had occurred, the rights nevertheless
undoubtedly mitigate whatever financial burdens the law has imposed on
appellants and, for that reason, are to be taken into account in considering
the impact of regulation.
The Suitum case involved the Tahoe Regional Planning Agency, which
regulates land development for the ecologically sensitive Lake Tahoe region on
the California/Nevada border. Every proposed development is subject to the
agency's Individual Parcel Evaluation System (IPES) before permission to
develop is granted. All parcels in areas carrying runoff water into the Lake
Tahoe watershed are off limits to development under IPES. To mitigate these
impacts on property owners, development rights may be transferred to other
parcels suitable for construction.
Ms. Suitum, the owner of a parcel in a runoff area, was denied the right to
construct a residence on her parcel but was granted development rights for use
elsewhere. She did not attempt to exercise these rights. Instead, Suitum
brought suit against the agency, claiming that it had effected a taking of her
property without just compensation.
She argued that she was denied all reasonable use of the parcel she owned,
that the TDRs were of little or no value, and that her claim was ripe because
it would be futile to try to transfer them. The agency said that the rights
were of significant market value (and offered appraisals), that the value of
the rights was relevant to the question of whether there was a taking, and that
Suitum's claim was not ripe because she had not tried to collect or exercise
her development rights.
The Court found that there was a final decision on the use of Suitum's
property when the agency declared under IPES that her parcel could not be
developed. Also, there was no dispute as to exactly what rights she would
receive from the agency. The Supreme Court found that the value of the rights
was not essential to determining whether there had been a taking, as the agency
had claimed. The Court found the case was ripe and remanded it for further
proceedings. The concurrence, written by Justice Scalia and joined by Justice
O'Connor, expressly stated what the majority implied-that TDRs were relevant
only in setting the amount of compensation, and not in determining whether
there was a taking.
THE STATE COURTS
TDR ordinances have survived challenges state court from several legal
directions.. In 1976 in Washington, D.C., a TDR program was upheld against
claims that it violated the uniformity requirement of the zoning enabling
statute and that it constituted discrimination on the basis of wealth. A TDR
ordinance in Los Angeles was unsuccessfully challenged in 1993 on the basis
that it was inconsistent with the concept of zoning in accordance with a
comprehensive plan (akin to a "spot zoning" claim).
In Florida, in Glisson v. Alachua County in 1990, an appellate court
upheld an ordinance that restricted development in an area with both ecological
and historic significance on the grounds that protecting the area from
development was a legitimate public purpose, and because TDRs (and variances)
would allow reasonable use of property.
In the case of City of Hollywood v. Hollywood, Inc., a landowner
challenged a TDR program on the basis of substantive due process. A Florida
appeals court found that protecting the aesthetic value of an unspoiled beach
was a legitimate public purpose, and that the transfer of the right to develop
housing units to another portion of the same property was a reasonable means to
that end, even though the owner was required to deed several acres outright to
the city.
In Aptos Seascape Corp. v. Santa Cruz County in 1982, a California
appeals court expressly stated that the transfer of development rights should
be considered in the analysis of whether there has been a taking and could
indeed "preclude a finding that an unconstitutional taking has
occurred."
In Corrigan v. City of Scottsdale in 1985, an Arizona appeals court
struck down a TDR ordinance on the grounds that the Arizona Constitution
requires just compensation to be "made in money."
Even though some courts have found that TDRs can negate a takings claim, and
must be considered in the takings analysis, there are other takings-related
problems with TDR programs. For instance, courts look askance at artificially
downzoning a receiving area--zoning that area for a use or density
significantly lower than the surrounding areas so that the TDRs are necessary
for economically viable development in the receiving area.
EXAMPLES OF TDR PROGRAMS
A survey of 3,500 local governments and review of planning literature in
1997 found 107 TDR programs in 25 states (Pruetz 1997). These vary from rural
areas to the largest city in the nation. Some of them are described here.
New York City. The oldest, most well-known transfer of development
rights programs was instituted in New York City in 1965 as part of its
Landmarks Preservation Ordinance. There is a great incentive for the owners of
historic properties to tear them down and replace them with buildings that take
advantage of the current legally permitted density, which is greater than the
density at which the historic structures were built.
The ordinance created a Landmarks Preservation Commission, which holds
hearings to designate landmark buildings and districts. With the focus on
guaranteeing that owners of landmark properties receive a "reasonable
return" on their investment, the ordinance also provides for the transfer
of development rights. Originally, unused development rights could be
transferred to adjacent lots on the same block. Amendments in 1968 and 1969
expanded the allowable location of receiving sites.
The TDR portion of the ordinance has been only mildly successful: over a
dozen transfers have been made since its enactment. The main problem is that
there are other means under New York City zoning laws to obtain increased
density (rezonings and density bonus programs) and the process for approving a
transfer of development involves the time-consuming approval of a community
board, the city planning board, and the city council.
In 1998, New York City established a TDR program for a theater subdistrict
on Broadway. There are 44 theaters in the subdistrict subject to regulations
for preserving live performances and for preventing the theaters' demolition
and conversion to other uses. According to Melanie Meyers of the department of
city planning, the TDR program will allow theater owners to transfer their
unused development rights to any other property in the subdistrict under a
streamlined approval procedure.
The Chicago Plan. This is the common name for a TDR program landmark
preservation proposed for adoption by the City of Chicago in the early 1970s.
The plan was never fully implemented in Chicago but contributed greatly to the
development of the TDR concept.
The plan proposed that areas containing landmark properties would be
declared development rights transfer districts. Owners of designated landmarks
within a district could transfer the development rights to one or more
non-landmark properties in the transfer district, whether or not he or she
owned it, and have the property tax valuation of the landmark parcel adjusted
to reflect the diminished value. In exchange, the property would become subject
to a "preservation restriction," binding the owner and all future
owners to maintain the property according to certain standards and to refrain
from altering or demolishing the property without city consent. The main
benefit to the owner would have been the tax deduction. The city would operate
a TDR bank to fund municipal purchase or condemnation of TDRs with proceeds
from the sale of TDRs previously purchased or condemned.
According to John Costonis, one of the authors of the plan, it was not
implemented in Chicago because of "conservatism" in city hall under
Mayor Richard J. Daley and in the legal community. The traditional "police
power" zoning approach to protecting landmarks had been tried and
judicially approved, and was considered adequate. Moreover, downtown developers
could build to market intensities and densities under existing zoning, or by
employing incentives, and did not need to purchase TDRs. However, elements of
the Chicago Plan were adopted by the Illinois legislature as municipal historic
preservation enabling act (see below), and served as a model for enabling
statutes in New York and Tennessee
Pine Barrens, New York. The Pine Barrens on Long Island were
designated for protection from development by the Long Island Pine Barrens
Protection Act of 1997. (Note that it is not the same as the Pinelands of New
Jersey, an area that also has a successful TDR program.) The purpose of the act
is to preserve natural areas, agricultural and fishing resources, and historic
sites in the Pine Barrens-Peconic Bay area.
The act divides by the Central Pine Barrens into a core preservation area
and a compatible growth area. The Central Pine Barrens Joint Planning and
Policy Commission was created to govern land use in the area, starting with a
comprehensive land-use plan. With regard to TDRs, the commission is required to
(1) inventory all privately owned land in the core preservation area; (2)
calculate the development yield of all such parcels based on measures of area,
density, height limitations, and floor-area-ratios; (3) notify the owners of
such parcels of its determination; (4) designate receiving areas, both inside
and outside the Central Pine Barrens; and (5) consider the fiscal impact of the
TDR program it develops.
The Pine Barrens TDR program has been used to a moderate degree. From it's
commencement in mid-1995 to August 31, 1998, 228 parcels in the core preservation
area were awarded transferable development credits. Out of the 52,500 acres of
the core preservation area (and 47,500 acres of the compatible development
area), the total area of the sending parcels was 189 acres. Ray Corwin,
executive director of the commission, asserts that the TDR program is a
success, especially when considered as a voluntary portion of the entire
Pine Barrens regulatory system. "The prevalence of small parcels using the
program is intentional," he says. :The fee structure of the TDR is
calculated to reduce the cost to small landowners.
Collier County, Florida. Collier County, on the southeast tip of
Florida, includes the growing city of Naples and portions of the Everglades. To
preserve coastal areas and the inland wetlands, the county enacted a Special
Treatment Overlay Zone in 1974. Within the zone, covering over 80 percent of
the county, strict environmental requirements apply to the issuance of all
development permits. The ordinance also authorizes the transfer of development
rights-one dwelling unit for every two acres-from parcels in the zone to
parcels outside the zone, if the sending property is at least two acres.
Density on the receiving parcel cannot be increased by more than 20 percent of
its zoned density. The owner of the property in the sending area must either
deed it outright to the county or sign and record a guarantee that the land
will be left in a natural state, with the permissible exception of nature
trails, boardwalks, and related uses.
The Collier County TDR program has been a modest success-526 development
rights, arising from 325 acres in the zone, have been transferred. However,
according to Barbara Cacchione of the Collier County Planning Services
Department, the fact that existing zoning provides adequate density without
purchasing TDRs means the program has been very rarely employed "in the
last 10 years or so." Despite this, nine other south Florida counties in
south Florida have followed Collier's lead and enacted TDR ordinances.
Montgomery County, Maryland. Montgomery County enacted a TDR
ordinance in 1981 to preserve agricultural uses in the face of expanding
residential subdivisions and commercial development.
The rural areas of the county (almost one-third of the county's total area),
were downzoned from one dwelling unit for every five acres to one dwelling unit
per every 25 acre. Owners also received five transferable rights to build one
additional dwelling unit per each 25 acres. The areas designated as receiving
areas were adjacent to existing highway and railway corridors into Washington.
For the sake of efficiency, a permit to purchase developments rights is issued
concurrently with the subdivision plat approval.
The Montgomery County program has been effective: more than 38,000 acres of
the approximately 91,000 rural acres have been preserved. Because of the
existing development pressure, the concentrated nature of the receiving areas,
and the creation under the ordinance of a TDR bank to act as a "market
maker," the market value of TDRs has been high-around $10,000 per right.
Montgomery County's program has prompted six other Maryland counties to adopt
TDRs as well.
STATE TDR ENABLING STATUTES
Nine states have detailed enabling statutes for TDRs. Arizona includes in its
zoning enabling statute a provision authorizing the use of TDRs. The provision
requires that any transfers must be with the consent of the owners of the
sending and receiving parcels and must be preceded by notice and a hearing.
Connecticut's zoning enabling section includes express authority to create a
TDR program and to vary density limits in the receiving areas. Another
provision requires that development rights cannot be transferred except upon
the joint application of the transferor and the transferee (the owners of the
sending and receiving parcels, respectively).
Georgia authorizes counties and municipalities to employ TDR to protect
natural land, open space, recreational land, farm land, and "land that has
unique aesthetic, architectural, or historic value." As in Arizona, all
transfers must be preceded by notice and a hearing and must be with the consent
of the owners of both the sending parcel and the receiving parcel.
Illinois authorizes municipalities to designate landmarks and to implement purchase
(of full title or of just the development rights) or employment of transferable
development rights. The development right is the density permissible under
zoning law (the statute recommends using quantifiable measures of density).
Property taxes must be adjusted after a transfer of development rights, whether
voluntary or by condemnation. The municipality is also authorized to create a
development rights bank.
The Kentucky statute authorizes local governments to enact TDR ordinances,
and does not limit their use to historic preservation. A TDR ordinance must
provide for the voluntary transfer of development rights from one parcel of
land to another, the restriction of development on the transferring parcel, and
the increase in density or intensity of development on the receiving parcel.
Both transferring and receiving areas must be indicated on the zoning map.
New Jersey has created a statewide Transfer of Development Rights Bank
within its Department of Agriculture. The bank is authorized to purchase
development rights and to provide matching funds up to 80 percent for the
purchase of development rights by a municipality or county. It is also
authorized to sell the TDRs it obtains.
New York authorizes local governments to enact transferable development
rights ordinances "to protect the natural, scenic, or agricultural
qualities of open land, to enhance sites and areas of special character or
special historical, cultural, aesthetic, or economic interest or value."
The statute requires that a TDR ordinance can be enacted only in accordance
with a local comprehensive plan, the receiving district must have adequate
public facilities to accommodate new development, and the impact of the TDR
program on low- and moderate-income housing and the environment must be
considered.
North Carolina authorizes the use of "severable development
rights" by cities and counties in connection with dedicating a corridor
for a street or highway as an alternative to requiring dedication of the
corridor as a condition of subdivision plat approval.
Pennsylvania authorizes local governments to enact TDR ordinances, and
provides that no transfer of development rights can occur in absence of such an
ordinance. Development rights cannot be transferred across municipal lines,
except when there is a joint zoning ordinance between the municipalities where
the sending and receiving parcels are located.
The Tennessee statute provides that only counties with a metropolitan
government can have a TDR program, but TDRs can expressly be used for
"historical, agricultural, or environmental" purposes. The area of
the designated receiving property must be equal to or greater than the area of
the sending parcel. Transfer of development rights to parcels owned by other
persons must be allowed, and any transfer of development rights must be
voluntary and by contract. The transfer of development rights is not subject to
property or income taxation.
Seven states generally authorize local governments to enact TDR ordinances,
but provide no standards, conditions, or other regulation of their content.
Florida's Private Property Rights Protection Act includes transfer of
development rights as one possible mitigation measure when a landowner claims,
and the local government agrees, that a particular local regulation or decision
"inordinately burdens" the owner's reasonable use of the land. Idaho
authorizes TDRs for the preservation of historic properties. Maryland
authorizes counties and municipalities, including Baltimore, to establish TDR
programs. New Hampshire and Washington both authorize transfer of development
rights as part of a package of other innovative land-use controls, such as
phased development, planned unit development, cluster development, and impact
fees. Rhode Island authorizes TDR programs as part of the standard zoning power
of a city or town. South Dakota generally authorizes counties and
municipalities to employ TDRs as part of historic preservation ordinances.
Several local governments have implemented TDR programs without express authority
from a state enabling statute, relying on their general authority to regulate
type and density of land use.
BASIC ELEMENTS OF SUCCESSFUL TDR PROGRAMS
There are several essential elements to crafting a constitutional and
effective TDR program:
A final, basic question that enabling statutes often do not directly resolve
is whether TDR programs should be mandatory or voluntary. Some states require
voluntary programs, while others envision mandatory transfer of rights. The
advantage of a voluntary system is that all takings challenges are effectively
precluded when the transaction is contractual. On the other hand, only a
mandatory program will ensure all parcels in the sending area will transfer
their development rights. Local governments in the same state may see a need
for one or the other approach. Therefore, TDR enabling acts should authorize
both voluntary and mandatory programs.
MODEL ENABLING STATUTE FOR TRANSFER OF DEVELOPMENT RIGHTS (1)
(1) A local government may adopt local land development regulations and amendments
that include provisions for the transfer of development rights, in the manner
prescribed in this Act.
(2) The purposes of this Act are to:
(a) preserve open space, critical and sensitive areas,
and natural hazard areas;
(b) conserve agriculture and forestry uses of land;
(c) protect lands and structures of aesthetic,
architectural, and historic significance;
(d) ensure that the owners of land that is so preserved,
conserved, or protected may make reasonable use of their property rights by transferring
their right to develop to other properties that can make use of it;
(e) provide a mechanism whereby development rights may
be reliably transferred;
(f) ensure that development rights are transferred to
properties that are in areas or districts that have adequate community
facilities, including transportation, to accommodate additional development;
and
(g) authorize the local government to create a TDR Bank,
where development rights may be purchased and conveyed by the local government,
in order to stabilize the market in development rights and to regulate or
control the development of property that the local government intends to
protect under subparagraphs (a) through (c) above.
(3) As used in this Act, and all other statutes where "transfer of
development rights" is referred to:
(a) "Development Rights" mean the rights of
the owner of a parcel of land, under land development regulations, to place
that parcel and the structures thereon to a particular use or to develop that
land and the structures thereon to a particular area, density, bulk, or height;
(b) "Receiving District" means one or more
districts in which the development rights of parcels in the sending district
may be used;
(c) "Receiving Parcel" means a parcel of land
in the receiving district that is the subject of a transfer of development
rights, where the owner of the parcel is receiving development rights from a
sending parcel, and on which increased density and/or intensity is allowed by
reason of the transfer of development rights;
(d) "Sending District" means one or more
districts in which the development rights of parcels in the district may be
designated for use in one or more receiving districts;
(e) "Sending Parcel" means a parcel of land in
the sending district that is the subject of a transfer of development rights,
where the owner of the parcel is conveying development rights of the parcel,
and on which those rights so conveyed are extinguished and may not be used by
reason of the transfer of development rights; and
(f) "Transfer of Development Rights" means the
procedure prescribed by this Act whereby the owner of a parcel in the sending
district may convey development rights to the owner of a parcel in the
receiving district, whereby the development rights so conveyed are extinguished
on the sending parcel and may be exercised on the receiving parcel in addition
to the development rights already existing regarding that parcel.
(4) The legislative body of a local government may adopt a transfer of
development rights program only by ordinance, in the manner for land
development regulations pursuant to [relevant state statute], and an
ordinance pursuant to this Act shall:
(a) be adopted by the legislative body only after it has
adopted:
1. a local comprehensive plan; and
2. for a transfer of development rights program
concerning critical and sensitive areas, a critical and sensitive areas element
within the local comprehensive plan;
3. for a transfer of development rights program
concerning natural hazards, a natural hazards element within the local
comprehensive plan;
4. for a transfer of development rights program
concerning agriculture or forest preservation, an agriculture and forest
preservation element within the local comprehensive plan; and/or
5. for a transfer of development rights program
concerning historic preservation, an historic preservation element within the
local comprehensive plan;
(b) be adopted by the legislative body only after a
public hearing has been held on the proposed ordinance, with notice to all
owners of property in the proposed sending and receiving districts. Any
purported adoption contrary to this subparagraph shall be void;
(c) include a citation to enabling authority to adopt
and amend the transfer of development rights ordinance;
(d) include a statement of purpose consistent with the
purposes of zoning pursuant to [relevant state statute] and with paragraph (2)
above;
(e) include a statement of consistency with the local
comprehensive plan and with the applicable elements thereof, as listed in
subparagraph (4)(a) above, that is based on the findings of a detailed
comparison of the proposed ordinance with the local comprehensive plan;
(f) describe in detail both the sending and receiving
districts and shall require the designation of both the sending and receiving
districts on the zoning map of the local government;
(g) describe the development rights to be transferred
in reasonable detail, preferably in quantifiable terms such as area, building
coverage ratio, density, floor area ratio, height, or other forms of
measurement;
(h) require that the owner of a sending parcel execute,
and record with the county [recorder of deeds], a deed or instrument
creating a conservation easement, describing the released development rights in
reasonable detail and preferably in quantifiable terms, with the sending parcel
as the subservient estate and the local government as the holder of the
easement; and require that before any such easement is recorded that the
instrument be submitted to the [local planning agency] for its approval;
(i) require that, before any transfer of development
rights from a sending parcel to a receiving parcel or parcels may be completed,
that the [local planning agency] shall approve the transfer. The only bases for
rejecting a proposed transfer are that:
1. the development rights released by the instrument
vary significantly from the development rights that the sending parcel is
supposed to be releasing pursuant to the transfer of development rights, or
there is some other significant error in the instrument;
2. the proposed receiving parcel is not in a receiving
district; or
3. the transfer would increase the density or intensity
of development on the receiving parcel to a degree that violates one or more of
the provisions of paragraph (8) below.
(j) require that, once a transfer is approved, the
[local planning agency] issue to the owner of a receiving parcel, and record
with the county [recorder of deeds], a certificate assigning to the
receiving parcel, and all present and future owners thereof, the development
rights that the receiving parcel is to receive through the transfer of
development rights. Such certificate shall describe the development rights in
reasonable detail and refer to the instrument creating the conservation
easement, and the certificate shall have a copy of the instrument attached.
(5) Any instrument purporting to convey a conservation easement pursuant to
this Act but that the local government has not indicated its approval on the
instrument is void, and shall not be recorded or accepted by the county [recorder
of deeds] for recording.
(6) No district shall be designated as a receiving district unless the local
legislative body finds, before enacting an ordinance authorized by this Act,
that the district has or will have adequate community facilities and other
resources to accommodate the increased development authorized by the transfer
of development rights from the sending district.
(7) No district, or portion of any district, designated as a receiving
district, shall be downzoned to the degree that no reasonable use can be made
of a parcel of property, either after an ordinance pursuant to this Act has
been adopted or before such adoption in anticipation of adoption.
[Note: This paragraph is intended to prevent the takings problem discussed
above, whereby, to encourage the use of TDRs in a receiving district, the local
government downzones the district to the degree that owners cannot make a
reasonable use of their property in the district unless they purchase TDRs.]
(8) Any other provision of local land development regulations to the
contrary, the density or intensity of development of a receiving parcel may be
increased by the transfer of development rights so long as the increase in
density or intensity:
(a) is consistent with the local comprehensive plan;
[and]
(b) is not incompatible with the land uses on
neighboring lots or parcels; [and]
[(c) is not more than [20] percent greater than the development
rights of the receiving parcel without the transfer of development rights.]
[Note: No increase in density or intensity may contravene the plan or be
inconsistent with surrounding land uses. However, some states may prefer a
clear, numerical, limitation on the increase, and therefore subparagraph (c) is
provided as an option. Note that the 20 percent figure can be altered at the
state's preference.]
(9) The local government shall notify the county [property tax assessor]
of a transfer of development rights within [30] days of:
(a) The issuance of a certificate pursuant to
subparagraph (4)(j) above:
(b) the condemnation or purchase of development rights
by the local legislative body or the TDR Bank, pursuant to subparagraphs
(10)(a) or (b) below;
(c) the receipt by the TDR Bank of a donation of
development rights pursuant to subparagraph (10)(e) below; or
(d) the sale or conveyance of development rights by the
TDR Bank pursuant to subparagraph (10)(c) below;
and the [assessor] shall adjust the valuations for purposes of the
real property tax of the sending parcel and of the receiving parcel or parcels,
if any, appropriately for the development rights extinguished or received.
(10) The local government may, by ordinance, establish a transfer of development
rights bank, otherwise referred to as the "TDR Bank." The TDR Bank
may be operated by the [local planning agency] or by any other existing or new
agency designated by the ordinance, including a [regional planning agency] or
the [state planning agency].
(a) The TDR Bank shall have the power to purchase
development rights, subject to the approval of the local legislative body.
(b) The TDR Bank shall have the power to recommend to
the local legislative body properties where the local government should acquire
development rights by condemnation.
(c) If the local government itself does not have the
power under the state eminent domain enabling statute to condemn development
rights or a conservation easement (which is the same thing), that statute must
be amended to give the local government that power, so that it can then be
delegated pursuant to this paragraph.
(d) The TDR Bank shall have the power to sell or convey
any development rights it may possess, subject to the approval of the local
legislative body.
(e) The TDR Bank may, for conservation or other
purposes, hold indefinitely any development rights it possesses.
(f) The TDR Bank may receive donations of development
rights from any person or organization, public or private, subject to the approval
of the local legislative body.
(g) Except for any funding provided to the TDR Bank from
the [general or other] fund of the local government treasury, the
purchase or condemnation of development rights by the TDR Bank shall be funded
from the proceeds of the sale of development rights by the TDR Bank, and a
separate account in the local government treasury shall be established for such
purpose.
[Note: The local government could simply make an appropriation from the
general fund, or it may earmark revenue from a particular tax or fee for the
funding of the TDR Bank.]
(11) Two or more local governments may enter into an intergovernmental
agreement, pursuant to [relevant state statute], whereby transfer of
development rights may occur between a sending parcel in one local government
and a receiving parcel or parcels in another local government. All relevant
provisions and terms in ordinances pursuant to this Act in all local
governments that are parties to the agreement shall be substantially identical,
and this may be provided by including with the agreement a common ordinance to
be adopted by all parties to the agreement.
(12) This Act, or any provision thereof, shall not invalidate any completed
transfer of development rights pursuant to any earlier statute, ordinance, or
regulation, if said transfer was valid at that time.
[Note: Paragraph (12) is a "savings clause," preserving the
validity of earlier transfers of development rights, even if performed contrary
to the requirements of this statute, as long as they were legally proper at the
time.]
1. This model statute was prepared as part of the Growing SmartSM
project. Growing SmartSM is a multi-year initiative of the American
Planning Association to develop the next generation of model statutes for
planning and land development regulation. The result of the project will be a Legislative
Guidebook containing a comprehensive model planning and land use code ready
for adoption by state legislatures and including in-depth commentary. Phases I
and II (of three eventual phases) of the Growing SmartSM
Legislative Guidebook have already been published and are available through
APA. Some of the model Sections in Phases I and II have already been proposed
as bills inóand adopted as statutes byóvarious state legislatures.
Copyright 2000 By Author
John B. Bredin, Esq.
John B. Bredin is an attorney licensed to practice in Illinois. He works for
the American Planning Association as a research fellow on the Growing SmartSM
project. Published works include: "Vesting of Development Rights: A
Primer" Zoning News, July 1999, pp. 1-3 (Chicago: APA, 1999);
"Transfer of Development Rights: Cases, Statutes, Examples" PAS
Memo, November 1998, pp. 1-4 (Chicago: APA, 1998); and "Chicago Wins
Landmark Case" Zoning News, March 1998, pp. 3-4.
Mr. Bredin may be reached for inquiries or further information via e-mail at
jbredin@planning.org or by mail at the American Planning Association, 122 S.
Michigan Avenue, 16th Floor, Chicago, IL 60603.