A sometimes powerful tool in controlling local development passed in the Virginia General Assembly, but this version might not work as local governments had hoped.
The General Assembly passed legislation allowing localities to enact Transferable Development Rights (TDRs) — a tool which local government officials have long wanted as a way of better directing growth. But the version allowed by the General Assembly may not work as well as it could, say some smart-growth advocates.
"It really isn't the full-fledged TDR program," said Stewart Schwartz, executive director of the Coalition for Smarter Growth.
Transferable Density Rights turn unbuilt units of housing into commodities. Some areas could be designated as sending areas and others as receiving areas, shifting the unbuilt density from one area to another.
For example, if a property owner in a sending area has 20 acres zoned at one house per acre. He could choose to build one house, and sell the other 19 to a landowner in a receiving area, giving up his right to build those homes. The receiving landowner would then be permitted to build 19 more houses.
Under some circumstances, the “transferred density” could also become additional square feet of office or retail space in the receiving area. It is up to localities to determine the ratio.
Localities could also establish an area as a receiving zone, but exempt specific properties within that zone.
The theory behind the law is that it can preserve large swaths of open space. The mechanism could theoretically allow Fairfax County to encourage landowners of property in areas not served by public transportation to leave land undeveloped, shifting the density to areas close to Metrorail stations. Designated receiving areas could be clustered around parts of the county already envisioned for higher-density development.
Loudoun County Board of Supervisors chair Scott York (I) was cautious about adopting density transfers in Loudoun. "It's really too early to see what we would do with the TDR program," York said. "We'd have to sit down and take a look and see what advantage we could put them to."
Gov. Tim Kaine (D) had incorporated “transfer of density” into the package of legislation he had supported that sought to more closely tie land use and transportation.
The idea for allowing “transfer of development rights” has come up during previous General Assembly sessions, said Kevin Hall, Kaine's spokesperson.
"These are proposals that have been around these halls for years and haven't gotten anywhere," Hall said.
Hall acknowledged that the new program might not be as far reaching as some would like, but it is a step. "Getting even that much in play is a significant new tool for localities," Hall said. He left open the possibility that if lawmakers wanted to revisit the issue to expand local government powers, the governor would be open to discussion.
WHERE VIRGINIA'S law falls short, Schwartz said, is that it does not allow for the localities to downzone the sending areas.
When Montgomery County, Md., established its Agricultural Reserve in the 1980s, it did just that. It stripped building rights from property owners and replaced them with credits. So the owner of 25 acres could only build his one house and could sell the other 24 units. But whether or not the property owner made use of his “transferable development rights,” he could no longer build those units on the downzoned property.
The resulting “agricultural reserve” is nearly 90,000 acres in the outer county, with density shifted to “TDR receiving zones,” mostly around Metrorail stations.
But under Virginia's law, property owners would retain the right to build the original number of units if they preferred.
Because the transfer, or sale of the development rights, is optional in sending areas, the program will only work if those property owners are willing.
"If local governments want to use it, they don't have the power to downzone," Schwartz said.
But a key architect of transferring density says that limitation takes away the benefit.
"If you don't downzone, you're wasting your time," said Royce Hanson. Hanson, a professor at George Washington University, was chair of the Montgomery County Park and Planning Commission in 1980 when it adopted its Transferable Development Rights program.
Maryland's legal system allows for localities to downzone more easily than Virginia. "You can downzone if you've got a justification for doing it," Hanson said.
Under the Montgomery County program, property owners had some building rights stripped, but were granted one development right for each house they could no longer build. Some of these rights still exist purely as a commodity and have not been built. Hanson estimated that they now sell for $30,000-$40,000 per right.
If Loudoun were to go ahead with a program, one of the questions would be how to implement the changes. Does extra density in a receiving area mean that the currently allowable density could be exceeded?
For example, if an area was planned for up to eight houses per acre — a typical density for townhouses — does that mean that in a receiving area, a property owner could then go above that range and get nine or 10 or more, if they purchased the density from another property?
Builders think so. "You are going to have to allow, in my mind, the [transferred] density plus the density you are allowed," said Jim Williams, executive vice president of the Northern Virginia Building Industry Association.
WILLIAMS SAID, however, that other conditions might need to be relaxed in order for the concept to work. He said that county requirements, such as a minimum number of parking spaces, open space and storm-water management facilities eat into the space on the ground that could otherwise be used for more houses. These requirements make it difficult to "buy" the extra density and actually have room to build the units. So some areas might not work as receiving areas, since they would not have space for both the extra units and the parking spaces they would require.
York said that large-scale density shifts might not work best in Loudoun County. "I think the advantage to us maybe is not to use it to shift from western to central or eastern Loudoun," he said. “I think that would be the wrong use of the tool."
A better way, York said, might be within a specific planning district in order to create large chunks of open space. For example, in the Dulles South area, "you could use it to shift from one area to another, maybe to create a regional park," York said.
Schwartz agreed that might be effective for Loudoun. While he encouraged restrictive zoning in the western portion of the county, Schwartz said that shifting development around within the eastern side could help with some issues like traffic. "You could use the Transfer of Density Rights tool to balance mixed-use and open space," he said.
Montgomery County specified how much additional density a landowner could add in a receiving zone. "We applied a base density, but if you acquire development rights, you could go above that," Hanson said. Montgomery County also established a ceiling for how many density rights could be added to a given parcel.
He suggested even allowing an additional power that could be difficult to accomplish.
Williams said that the legislature should allow for shifting density across a wider range, for example from western parts of Loudoun County into areas around Metrorail stops in Arlington. "If you are trying to achieve better land-use planning, you've got to have inter-jurisdictional transfers," he said.
Adoption of a program is optional. Loudoun County has not yet begun any studies of how it might implement one and the authorizing legislation will not take effect until July 1.
"I think a lot of us are just going to have to see what the county attorneys and planners of Virginia have to say about it," Schwartz said.