Expanding on the topic of preserving unique pieces of rural real estate and farmland:

In a previous post Saving Farmland with Transferable Development Rights we provided some information on the basics of  a TDR program and how with careful planning and administration it can be a significant component in channeling growth and development of building lots. 

Equally as important it can be a very effective tool for preserving farmland, conservation areas and even historic places.
 
While not for every community, there are many that are ripe for such programs.  So, what are the common features and attributes of the most successful programs around the nation?
 
1.   Growth is good:  A community that adopts a TDR program must embrace a healthy and consistent level of development activity.  For many communities the interpretation of this phrase can cause a lot of debate over what is “healthy” growth.
 
2.   Simplicity for the participants:  While the establishment of a TDR program can be very complex to craft, the process must be simple and easy to understand for real estate owners and developers.
 
3.   Synergistic:  Transferable Development Right programs work best in conjunction with other Federal, state, county and/or city preservation programs.
 
4.   Public support:  Land developers must buy in to the concept and see that it makes economic sense.  Real estate developers need to be assured that the addition of a TDR program is not just another way that government will add more layers of costs and/or bureaucratic hurdle on top of what many believe is already a complex process to obtain governmental approvals.
 
5.   Fair and balanced:  The rural land property owners must be comfortable with the trade-offs that come with a TDR program.  Often elected officials will down zone away subdivision rights from rural property in exchange for an offsetting number of transferable development rights.  This can be a slippery slope in that historically, if the program is not properly structured, value can be lost.
 
6.   Bigger is better:  Create a large and sustainable market place.  The sending and receiving areas should be big enough and balanced so that there is a large number of rural property owners (sending areas) and developer opportunities (receiving areas) to allow the free market system to work.
 
7.   Bank it:  In many jurisdictions the local government has created what is known as a TDR Bank.  In such cases the bank will purchase TDRs from the sending areas in order to stimulate the market or accelerate the preservation of land in a certain area.  Transferable development rights can then be resold to developers who wish to increase density in receiving areas.  There are many pluses to such a system; however, it is often easy for government to upset the system by controling the number that they are willing to sell and thereby over influencing the market value.  
 
8.   No way around it:    Government policy requires the use of TDRs in order to increase density in the designated receiving areas.  There can be no way around using transferable development rights to increase the bonus units that are obtainable through the program.
 
9.   The Easement trade off:  Land preservation easements (typically perpetual) are placed on the rural land once the TDRs are transferred off of the property.
 
10.  City / County cooperation:  In an era where many communities plan for most growth to occur in and around municipalities, inter-jurisdictional cooperation is necessary.  This is especially important with annexations which can often take large tracts out of the mix which can throw the ratio of sending and receiving areas out of balance.
 
11.  Nothing lasts forever:  It is important to know these programs have a life.  Once the goals of the program are accomplished the party is over. Eventually all or most of the development rights will be sold or the receiving areas developed out.

12.  Administrative oversight:  Without a doubt once established and active, it is essential that there be sufficient staff support to tract the transfers of TDRs, the easements that are placed on the impacted properties, as well as the bonus density that was provided.  Without staff oversight, in an active market, it can quickly become a nightmare to easily access which properties still have development rights.  This occurred in the early years of the Montgomery County, Maryland program, but much time was devoted to correct it.  Washington, D.C. (yes, believe it or not D.C. has TDRs) on the other hand  has had an active market, but fell so far behind in tracking transfers that it became mired in threats of lawsuits and bureaucratic red tape.
 
13.  No small task:  The idea of transferring development rights from one piece of real estate to another is simple enough, but to establish a successful program it truly requires broad support for all stakeholders in a community.  Clear vision of the goals must be established collaboratively.   This in and of itself is no small task, but for the few communities who have created successful programs, most would say that it is worth it.
 
In future posts on this series, we will look at some examples of successful and failed transferable development right programs.  We’ll also explore some nontraditional programs.

The author: Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland.  He also writes for TheTentacle.com and Want2Dish.com

Guest writer Donavon Corum returns with the second part of his topic on Planning Assets.

In my last article entitled 6 Planning Assets that Build a Local Economy, I described the planning assets:  Natural Capital, Physical Capital, Human Capital, Institutional Capital, Financial Capital and Social Capital.  Natural and Physical capital are arguably the two key elements when establishing a sound economic foundation.

The State of Maryland, its counties and local jurisdictions have established some of the best Natural Capital protections and policies in the nation.  Such examples are the Forestry Conservation Act, Storm Water Act of 2007, Rural Legacy and MD Agriculture Preservation Foundation, Green Print Program, steep slope regulations, wetland and stream protection and buffers, and minimum required open space requirements.  These and many other regulations and programs have established strong principles for application to our community economic planning and have increased the value of our Natural Capital.

Physical Capital plays an important role in the creation and survival of the community and is the key to establishing Human Capital, Institutional Capital, Financial Capital and Social Capital.  Using the American railroad community as an example, we can examine Physical Capital at work.  The cities of Brunswick and Frederick are two communities with strong railroad ties in Frederick County. 

During the 19th century a large majority of settlements along railroad rights-of-way were built across North America and established a physical DNA that is still prevalent in today’s planning efforts.  Nothing can erase their impact on the community form.  We still see it today in our gridded street system and buildings that face existing or non-existing rails (such as East and All Saints streets in Frederick).  The railroad tracks and equipment themselves were the technological capacity of the 19th century.

Initially these railroad communities were created for economic purposes.  The building blocks of the community started with investors, entrepreneurs and businesses.  Then came employees with associated housing needs, which added more business and employment opportunities as nearby real estate was developed for commercial and industrial uses.  After this foundation was set, the creation of institutional uses (schools, churches, government entities and public buildings), cultural venues, additional transportation elements and public outdoor spaces followed.  Steadily over time, the community laid and established each new layer.  Thus one can see how the Physical Capital acts as a cornerstone that directs and imposes itself on the remaining planning assets: Human Capital, Institutional Capital, Financial Capital and the Social Capital.

Although railroads no longer occupy the most important position in the economic hierarchy, consider today’s technological capacity, the role of the highway in contemporary American life and the corresponding economy that has grown from this. 

The city of Frederick has adapted to the four major highways (Interstates 70 and 270, and US Rte 15 and 340) and today’s technology associated with Fort Detrick.  As with the railroads in the 19th century, the city of Frederick is further establishing itself as an economic engine for Frederick County.  With the railway infrastructure still existing in Brunswick, revitalization has been taking place.  Current and future residences are taking advantage of the MARC passenger railway service.  This re-establishes its principle in the Physical Capital asset.

 Therefore, fundamental to keeping our capital increasing in value is understanding that proper planning for growth and real estate development is a vital part of the Physical Capital and is a major engine of a strong economy.

Donavon Corum, RLA, AICP, and LEED AP  is the Managing Member of Design Core Studio, LLC, a Maryland Planning and Landscape Architecture Firm.  Donavon will be a speaker at the National Association of Home Builders 2011 International Builders Show in Orlando.  He is currently participating with the American Planning Association’s (APA) National Infrastructure Investment Task Force as part of the Green Sub-Task Force.

The condo bust should lay to rest the notion that the American love affair with suburbia is over

Joel Kotkin, writer for the Journal and a presidential fellow at Chapman University, is the author of “The Next Hundred Million: America in 2050″ (Penguin Press: 2010), offers up an interesting perspective on this topic.  The question of are Americans really embracing the idea that sprawl is not a good thing for them … or are they saying do as I say, but not as I do? 

Pundits, planners and urban visionaries—citing everything from changing demographics, soaring energy prices, the rise of the so-called “creative class,” and the need to battle global warming—have been predicting for years that America’s love affair with the suburbs will soon be over. Their voices have grown louder since the onset of the housing crisis. Suburban neighborhoods, as the Atlantic magazine put it in March 2008, would morph into “the new slums” as people trek back to dense urban spaces.

But the great migration back to the city hasn’t occurred … MORE