Supes Talk More About How to Control Rural Development

Wednesday, December 15, 2010

James City County Supervisors heard a presentation Tuesday on a tool that preserves rural lands by keeping development concentrated in targeted areas, and began to discuss some of the big hurdles to making that program a reality here.

Transfer of Development Rights, or TDR, is a program that keeps development density confined to certain areas while leaving other areas undeveloped in exchange. A successful program, according to the consultant, has clear goals, suitable sites for sending and receiving areas, offers attractive incentives to developers and land owners, and creates a bank that can buy, sell and hold TDR rights, according to the consultant. It was clear at the work session that supervisors aren’t yet close to agreeing on any of these points.

Bill Fulton, principal on the county project for DC&E, told supervisors that TDR works by compensating landowners for decreasing density on their land (the “sending” area) by capturing value from increasing density in another area (the “receiving” area). Sending areas are agricultural lands the county wants to preserve, and receiving areas are places targeted for growth.

The county needs enough sending and receiving areas to make the program work, Fulton said. The 10,000 or so units currently approved in the county but not yet built could delay TDR success at first, he cautioned.

Banks are used to help “even out” the private market, Fulton told supervisors. They can be run by local government, a board determined by the government, or by a nonprofit or other group. A bank would have the ability to buy TDR rights from “sending” area lands, hold them, and sell them to interested developers. Not all buyers and sellers are in the market at the same time, which makes banks helpful.

The other option would be to let property owners, developers, Realtors and banks sort out the process on their own.

TDR is not a silver bullet, Fulton stressed, and is just an implementation tool for the county’s comprehensive plan.

Areas with successful TDR programs include Montgomery County, Md., which has the oldest and most successful TDR program in the country and has preserved 50,000 acres; and King County, Wash., which has preserved 140,000 acres (the most land preserved by TDR in the country).

Incentives for sending areas include making the process easy for landowners to follow, having people who have a sentimental connection to the land and want to keep it from being developed, and making sure the program will generate some revenue or tax advantage for land owners.

Incentives for receiving areas include making the process easy for developers, keeping good market information about transactions, making the purchase of TDR rights more profitable than not, and making it a more attractive way to get density than any other way.

Fulton said it is important for the receiving area population to see benefits to the program; supervisors weren’t sure whether this would be possible in the county where many residents weren’t happy about new development and growth. Fulton suggested ways to make the idea more palatable, including setting aside money for parks and other amenities in these areas.

He cautioned that the county needs to decide if it wanted to preserve rural lands outside the Primary Service Area (PSA), which is where county utilities end and is a way the county currently controls growth, or focus its efforts to preserve environmentally sensitive areas inside the PSA.

Supervisors had a lively discussion, with Chairman Jim Kennedy pointing out that many citizens consider environmentally sensitive areas in the PSA to be rural lands.

He also reiterated his belief that the PSA isn’t perfect and might need to be reconsidered, which Supervisor John McGlennon strongly disagreed with.

Fulton stressed that, regarding the sending area, the county needs to decide its terms: whether to consider TDR credits in gross (credited density based on straight acreage) or net (density based on developable acreage and excluding areas like environmentally sensitive ones that aren’t buildable).

Supervisor Mary Jones said she felt net consideration was more realistic based on actual conditions.

McGlennon, seemingly frustrated with the PSA discussion, said he didn’t think TDR would work in the county and that there were other options that might work better, like the county’s Purchase of Development Rights (PDR) program, which just buys development rights to keep lands undeveloped without shifting density. Land purchase and current tools and policies also helped preserve rural lands, he argued.

Kennedy pointed out that PDR hadn’t been very successful so far, because land owners aren’t interested in selling their development rights.

Other concerns supervisors voiced were whether to make receiving zones encompass the entire PSA or just specific spots, whether TDR would only relate to residential development or whether it could be used for business, and whether to rezone A1 and R8 areas within the PSA.

The next steps in the TDR discussions will be to have DC&E complete an economic analysis to determine what areas might make good sending and receiving areas.

Staff will do some stakeholder interviews with land owners, developers and others and in February they’ll organize a public meeting to let people know more about TDR.

Read the entire presentation by clicking on the attachments to the agenda here.