Transfer of Development Rights in Harford County: Balancing Act of Preservation, Planning and Progress

From the Harford Count Economic Development Advisory Board:

Like a tightrope walker whose every step must be both precise and delicate, growth management in a community requires a sure-footedness that will result in a balance for everyone. Preserving agriculture and historic sites, jump-starting housing and creating a business-friendly environment for companies who will, in turn, provide jobs, are all part of the balancing act of maintaining a vibrant community.

The preservation of agriculture and support of farming is among the priorities for our County. Yet, how do we support the landowner’s right to preserve, build or sell the land as he or she sees fit? How do we balance conservation and development on both sides of the scale?

One of the ways is a Transfer of Development Rights, or TDR, provision, which Harford County instated in 1982. We are currently one of nine Maryland counties with such a program. The basic premise of allowing landowners to sell developmental rights of low-density areas to purchasers in higher density areas is sound, but the administration of such a program is complicated by its nature. An effective TDR program compensates property owners whose development rights have been limited due to zoning, and it also allows preservation of the land. It can reduce zoning variances, provide private funding and make development more predictable.

For example, the TDR program in Montgomery County, MD has been cited as one of the best in the nation for its successful development in and around Metro stations and its preservation of over 49,000 acres. The program allows the land owners to sell a portion of their rights but maintain a fee interest in the property, which brings them working capital for farming. In addition, developers using TDR receive incentives like expedited approval and higher density.

As Harford County grows, the acquisition and use of land will change – requiring revisions in the TDR program. It begs the question: What constitutes a good TDR program?

Many related studies have been done, and while they can be used as guidelines, ultimately, each county is different. As we attempt to manage growth with land use plans and policies in Harford County, there remains the possibility that a well-implemented TDR program can help foster residential development. It can provide incentives for increasing residential densities and directing growth to desired areas. This creates an immediate effect on homebuilders. With residential building permits finally on the upswing, developers are anticipating using more land and could plan for TDRs.

Whether or not a TDR program can foster commercial development is less clear. Consider the effects of a TDR program on the County’s growth and on businesses that will bring jobs, which will, in turn, increase demand for residential developments. Harford County has 2,644 acres of vacant commercially-zoned land and 3,348 acres of vacant industrially-zoned land, with a high percentage inside the development envelope. Based on projected growth plans, the land is sufficient to meet needs well into the future. If TDRs become a requirement for commercial development and are either unavailable or out of sync with a developer’s square footage requirements, the commercial building industry could grind to a halt. Ideally, the introduction of TDR changes will have a grandfathering clause, so that developers can begin planned projects and avoid the possibility of carrying their investments and financing indefinitely, or carry them to another county.

Rather than creating compulsory use of TDRs, resulting in more restrictive land use, a good TDR program protects agricultural and historic lands and fully utilizes the development envelope. Not administered by government – state, local or otherwise – many sound TDR programs are monitored by a third party. They establish a “bank” of development rights with a specified value, and offer a place where developers, purchasers and builders can go to locate TDRs.

Questions to consider in revising the TDR program include:

– Are TDRs bought or contracted?

– When does a TDR become “used” – upon project approval or when building starts?

– What will be the cost to the county tax base for TDRs?

In addition, the land owners should be able to find accurate, consistent information about the cost and value of TDRs as it relates to their land. Send and receive zones should be clearly mapped out for the community, along with the pricing process. In Montgomery County’s program, prices of TDRs are negotiated between the developer and the land owner. At the program’s inception in the early 1980s, the TDRs sold inexpensively at $3,000 each. Today, they are selling at $45,000* per credit.

For Harford County, as we begin to use TDRs more effectively, we must evaluate our development needs, the existing land and the acquisition process. With well-thought-out programs and reasonable incentives, we can maintain the balancing act that will both preserve and progress Harford County.