TRANSFER OF DEVELOPMENT RIGHTS: Can They Work?

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The simple answer to the question posed above is 'you bet they can!'
But, like almost everything else, TDRs are not automatic; they must actually be set up to work, then this tool must be used.

The Whatcom County PDR/TDR program was established about 10 years ago, but has languished for a number of reasons.
[PDR stands for 'Purchase of Development Rights', and is used primarily to preserve farmland and other resource lands]

So far, Whatcom County hasn't used PDRs much because of lack of funding, but mostly a lack of political will and commitment.
And, the same can be said for the City of Bellingham, although it has acquired about 700 TDRs from it's Lake Whatcom Watershed Acquisition & Preservation Program.

But, it is good to see the TDRs actually being discussed again, because if a potentially good land use tool isn't on people's minds, it is very unlikely to be used to any good effect.
Now, with some recent annexations approved in 4 northern neighborhoods, the City of Bellingham may be able to establish and promote more so-called 'receiving areas', the lack of which has severely hampered the TDR program.
We'll have to see about that.

It is also a good sign that the Old Town redevelopment will require some TDRs from Lake Whatcom, and that the City has agreed to accept 'fees-in-lieu-of' payments in place of the somewhat awkward TDR transfer process.
Almost anything that can be done to jump-start an effective TDR program is probably worth the effort, particularly in establishing a future tool that can be readily used.

Rarely, do incentives alone achieve their goals; there must be some requirements, too.
The two must work together.
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Earlier this year, the City commissioned a report to update the TDR status. The PC approved its Findings and Recommendations in April of this year.

A few excerpts illustrate the meat of this report:

• To date, the Lake Whatcom Watershed Property Acquisition Program has expended about $18 million to purchase about 1450 acres and about 700 associated TDRs.

• About 229 of these TDRs have been purchased and 31 of them actually transferred to 'receiving areas', located outside the watershed. Average cost per TDR is about $30,000. This translates to a 10:1 transfer ratio, if the sales price of TDR used in a receiving area is $3,000.

To make any TDR program work, 6 things are required:

1. Availability of suitable 'receiving areas'
2. Cooperation between Sending and Receiving jurisdictions
3. A balanced marketplace for TDRs
4. Attractive financial incentives
5. A TDR 'bank' and facilitating mechanisms
6. Community support

Some of these are substantially missing, which accounts for the very modest performance compared to what is possible.

Of more importance, are the 7 Conclusions & Recommendations of the report:

1. The City must set minimum density requirements, as a condition of annexation.

2. Alternately, the base density could be lowered, but this is not considered a good idea at this time, because development is already occurring at lesser density than desirable for an urban area.

3. Demand for TDRs will likely increase in the future, but we need to get ready now.

4. TDR use may be encouraged by making them available on an exception basis.

5. City could expand the Lake Whatcom Acquisition Program

6. We need actual experience to make TDRs a usable future tool. Consider a demonstration project.

7. The City may need to offer public amenities to encourage using TDRs, equal to or greater than their value.
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Anyone remember the sessions with Rick Pruetz, the TDR expert? I do.
Most of what is now being discussed, was made available by Mr Pruetz in one of the 3 publications listed below, whether it was actually used or not. I know a copy of 'Saved by Development' is available in the City Council library, because I put it there.

Saved by development
preserving environmental areas, farmland and historic landmarks with transfer of development rights
by Rick Pruetz
Published in 1997, Arje Press (Burbank, Calif)

Beyond takings and givings
saving natural areas, farmland, and historic landmarks with transfer of development rights and density transfer charges
by Rick Pruetz
Published in 2003, Arje Press (Marina Del Rey, Calif)

Putting transfer of development rights to work in California
by Rick Pruetz
Published in 1993, Solano Press Books (Point Arena, Calif)

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Here's an excerpt from a MEETING SUMMARY on the County website:
Agriculture Advisory Committee Meeting Held 12-07-05
Agriculture Service Center
6975 Hannegan Rd

Troy Holbrook from the Whatcom County Planning and Development Services presented a power point presentation to the committee regarding the Transfer of Development Rights (TDR) program. Troy provided the committee with a handout pertaining to the power point presentation.
Troy stated that the current TDR program was targeted at the Lake Whatcom Watershed in hopes of protecting Bellingham’s source of drinking water and surrounding critical areas. The Lake Whatcom Watershed is a current “sending” area in the county.
Troy stated that a second “sending” area has recently been established in the Birch Bay area.

The “receiving” areas are the Bellingham UGA and a small section of Birch Bay. Troy
stated that the City of Bellingham does not participate in the program.
The program is currently voluntary and as of December 7, 2005 330 TDRs have been certified in the Lake Whatcom Watershed. Fifty-two of the 330 TDRs have been transferred into the Bellingham UGA.

Troy stated that the current price for a TDR is $2,000-$6,000. Transfer of Development Right certificates are issued at the time of purchase. The certificates can be sold or transferred. Certificates are permanently placed on the respective property titles.
Chuck stated the need to create a market for TDRs in the county to boost competition. Troy recommended that the committee support the TDR program to the County Council. In turn, Chuck recommended that the committee draft a document supporting the TDR program and the possibility of a TDR sending area in agriculture areas of the county.
Troy also provided a brief presentation on the PDR program in Whatcom County. A PDR Summary Table, Target Areas Map and Recommendations by the PDR committee were made available by Jessica to the committee for review.