The PA Land Conservation Conference: Part 2 - The exciting world of TDRs

Last Friday I attended the seminar "Establishing Successful TDR Programs." A "TDR" is a Transferable Development Right; development rights can be sold by a landowner separately while retaining his or her other property rights.  According to the PA Municipalities Planning Code, a single municipality or several municipalities can have a TDR program. A typical TDR scenario involves a farmer or large-tract landowner who wishes to preserve his or her undeveloped property from future development while at the same time realizing some income from the property.  A developer (or the municipality) usually approaches the landowner to sell some or all of the development rights to the tract.  The land is then deed restricted from future development, and remains privately owned open space. Sometimes, the protected land is also put under a conservation easement to further protect it from woodland clearing or similar environmental degradation.

In a TDR transaction, the developer who has purchased the development rights from the farmer/landowner can transfer these rights from the original parcel (the "sending" area) to the tract he wishes to develop (the "receiving" area).  Sending areas are typically conservation or low-density areas of the municipality and sending areas are higher density areas with established infrastructure. In many municipalities, the use of TDR's results in a density bonus--a reward from the municipality for participating in the program.  The density bonus allows the developer to increase the project density over what would usually be permitted without using TDR's.  The municipality benefits by preserving large parcels of land in conservation areas and the developer benefits by being able to increase the buildable density in an area where the municipality deems appropriate for more intense development.

Successful municipal TDR programs use a clearly worded ordinance with specific procedures for the landowner and developer to follow.  The NAR website includes many links to TDR information: www.realtor.org/libweb.nsf/pages/fg804.