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Transfer of Dev. Rights Pilot Program
Application Deadline Extended!!!
Pilot Program Application Deadline Extended Indefinitely!!!

Introduction
Farms in Polk County
March 10, 2010
 
Transfer of development rights (TDR) programs are a voluntary, incentive-based and market-driven approach to preserve land and direct development away from resource areas and into urban and urbanizable areas. Communities that develop TDR programs identify high-priority areas for protection as well as areas to which development may be directed. Both landowners and developers are offered incentives to motivate their participation in these programs. In return, landowners agree to protect their land in perpetuity.
 
In 2009, the Oregon Legislature authorized local governments to develop and adopt TDR programs when it passed Senate Bill 763. At the same time, the Legislature adopted House Bill 2228, which created the Oregon TDR Pilot Program. This program allows the Oregon Land Conservation and Development Commission (LCDC) to select three TDR pilot projects to test different ways to use this new planning tool. In 2011, the Legislature adopted House Bill 2132, which creates additional incentives to participate in the pilot program. Together, these bills provide new options and opportunities for local governments and landowners to protect farm and forest land as well as other natural and cultural resource values.
 
NOTE: Information on this page was used in an article published in the March/April 2010 issue of the Oregon Planners’ Journal.
 

What is TDR?
TDR is a market-based planning tool that allows a community to designate high-priority lands for preservation (called “sending areas”), within which landowners may voluntarily sell and transfer the right to develop land to areas that have been identified by the community as more appropriate for development (called “receiving areas”).
 
Developers who buy these development rights are, in turn, permitted to build more densely than they would otherwise be allowed under existing zoning, or they may receive other incentives. In exchange for their development rights, sending area landowners agree to record a conservation easement on their property that preserves it from development in perpetuity.
 
/lcd/PublishingImages/2010/tdr_example.jpg 
 
Typically, sending areas are located in rural parts of counties and receiving areas are in or adjacent to cities and rural communities, where public facilities and services are available or are planned. However, communities may also preserve significant natural and cultural features within urban and urbanizing areas using TDR. Local governments can enact TDR programs on their own, or together with neighboring communities, land trusts, or other partners.
 
While TDR is not generally used in Oregon, it has a proven track record across the country, where it has been in use for more than 40 years. There are more than 100 functioning TDR programs nationwide that have permanently preserved more than 500,000 acres of land. The best-known program – in Montgomery County, Maryland – has preserved more than 40,000 acres. Closer to Oregon, a program in King County, Washington, has preserved more than 135,000 acres – most of it forest land.

TDR Benefits
The two major benefits TDR programs provide are the permanent preservation of land or resources and a financial return to landowners. For these reasons, TDR programs tend to be well-accepted by the public.
 
TDR is used to preserve working landscapes as well as natural or cultural resources that are particularly valued by a community. For instance, in 2000, Deschutes County created a TDR program to protect groundwater quality and wildlife habitat in the La Pine area.
 
Local governments could use TDR to provide an alternative option for Measure 49 properties, by providing the ability to transfer development rights to more appropriate locations.
 
Finally, a TDR program could be used to create a permanent edge to an urban growth boundary (UGB) in the direction of the most productive or valued land in a community, thereby redirecting the path of future urban growth. One of the most attractive features of TDR is the flexibility it offers in meeting differing community goals and objectives.
 
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La Pine receiving area (above, left). La Pine sending area (above, right)

TDR Challenges
Creating a TDR program is not without its challenges. Some examples are:
  • Not every community is a good candidate for a TDR program. Because these programs are market-based, there must be development pressure of some type to fuel the market for the purchase and sale of TDRs.
  • There also needs to be infrastructure, either in place or planned, to accommodate potential increased development densities in receiving areas.
  • One particular challenge in siting receiving areas is that neighbors often oppose increased density. Neighbor concerns can often be alleviated through the adoption of design standards, or the provision of on-site or nearby amenities that the neighborhood supports. Designating new neighborhoods or transit hubs as receiving areas can minimize local opposition.
  • Another challenge is that many cities are already zoned for relatively high residential densities. Where this is the case, communities can use other development incentives, such as increased lot coverage or floor area ratios for commercial or industrial development, or waivers of some requirements, such as parking or open space.
TDR programs involve an upfront commitment to get local consensus on the sending and receiving areas, and to determine landowner and developer incentives.
 
TDR programs also involve finding an entity that will hold and monitor conservation easements over the long term; in most cases this will be a county or a land trust. When TDR programs are adopted, local governments make amendments to their comprehensive plans and zoning ordinances, typically creating special overlay zones.
 
Finally, local planning staffs keep records of development rights that are assigned to properties within sending areas and that are then used in receiving areas. Some planning staffs help facilitate TDR transactions by setting up an online exchange or bank that assists with the third-party purchase and sale of TDRs.

Oregon's TDR Pilot Program
Pine forest in Central Oregon
The 2009 Legislature enacted the Oregon Transfer of Development Rights Pilot Program as part of House Bill 2228, to be implemented by the Oregon Department of Land Conservation and Development (DLCD) and local governments. In 2011, new incentives for participation in the Pilot Program were authorized by the Legislature in House Bill 2132. The program is intended to test different TDR approaches that conserve private forest lands for timber production and for other forest uses. The program especially seeks to protect productive forest land that is at risk of conversion to rural residential use. However, the lessons learned will be applicable to other types of land and resource protection, too.
 
To nominate a pilot project, a local government and other participants propose both a sending area and a receiving area to which development rights would be transferred. Sending areas must be forest land outside UGBs, cannot exceed 10,000 acres and may not be currently developed at a density of more than four dwelling units per square mile. Participating sending area landowners grant conservation easements to ensure that residential development of the forest land property does not occur. Potential receiving areas are not limited in size but cannot be located within 10 miles of the Portland Metro UGB.
 
In January, 2010, LCDC adopted criteria for the selection of pilot projects in new Oregon Administrative Rules (OAR 660, division 28). These rules were amended in January, 2012 for consistency with HB 2132. Click on the links here to access the Original TDR Pilot Program Summary – 2010 and the FAQ on HB 2132 pilot project incentives (2012).
 
For more information, or to arrange for DLCD to meet with officials and interested landowners in your community, please contact Katherine Daniels at 503-373-0050 ext. 329.
 
DLCD encourages local governments, forest land owners, land trusts and others to consider participating in a pilot project. There is currently no deadline for submittals.
 
Nominations require a completed application form, a letter of interest and a concept plan (described in the new rules). If a TDR pilot project is selected by LCDC, a local government would then amend its comprehensive plan and land use regulations to implement the project.

Oregon's TDR Enabling Legislation
Senate Bill 763 was adopted by the 2009 Legislature. It is a general piece of enabling legislation that authorizes local or regional governments, alone or together with others, to enact a TDR program. Communities may preserve farm and forest land, fish and wildlife habitat, other natural resources, scenic and historic areas, and open spaces. SB 763 allows sending areas to be either outside or inside UGBs, but requires receiving areas to be inside UGBs or urban reserve areas that are likely to be included in UGBs at the next periodic review. A wide range of incentives may be used to encourage landowner and developer participation.
 
DLCD will not be a formal part of the adoption of a local TDR program, except to be a party to any intergovernmental agreement between two or more local governments.
 
While the department’s initial focus in 2010 is on the pilot program established by HB 2228, and on the protection of forest lands, our staff is also available to provide technical assistance to communities interested in establishing TDR programs to protect all types of working, natural and cultural landscapes.

TDR Links

Resource Documents

Contact Information
Katherine Daniels
Farm and Forest Lands Specialist
503-373-0050 ext. 329
katherine.daniels@state.or.us
 
Bob Rindy
Senior Policy Analyst
503-373-0050 ext. 229
bob.rindy@state.or.us