- The Enterprise
- The Recorder
While the transferable development rights program has enjoyed considerable success in Calvert County, the program has not gained much footing among Charles County landowners.
When its program was established in 1978, Calvert set the precedent for TDR programs in the state, as it was the first. In essence, the programs work by allowing the supervision of the transfer of land development rights between developers and farmers who choose to preserve their land. The landowners receive compensation for the land being preserved, and the developers can build at a higher density.
When former Calvert County Director of Planning and Zoning Greg Bowen developed the pilot program in the late 1970s, he said, he and the county commissioners at the time examined the land conservation issue from all possible angles, eventually concluding that the TDR program was the most practical.
“Nobody knew if it would work ... so it took making sure that there was a value to the development rights,” Bowen said. “You wouldn’t buy it if it wasn’t going to be worth anything.”
Calvert’s program proved to be successful, and to date, rural planner Veronica Cristo said, more than 11,649 TDRs have been used to create subdivisions in the county, and the county has retired another 4,180, buying them and not reselling.
Although the program has remained successful in Calvert, Cristo said it is “undergoing a comprehensive review” that is necessary given its age, and that “a number of new changes are anticipated” once the process is completed.
“Changes to the criteria used for new properties enrolled into preservation, how TDRs are used and how the county purchases TDRs are likely, though the exact details are still being established,” Cristo said. “The goal is to try to keep supply better balanced with demand.”
Despite its continued success, given the downward trend in real estate over the last several years, Cristo said the review of the program is necessary.
“The review, which began in July, was precipitated by several different factors that all had an effect of reducing the sales of TDRs,” Cristo said. “The nationwide economic downturn slowed the construction of new homes in the county, which greatly reduced the sales of TDRs needed in the open market. At the same time, the recent Sustainable Growth and Agricultural Preservation Act of 2012, SB 236, also known as the septic bill, will further depress the county’s TDR program by restricting major subdivisions in the traditional receiving areas for TDRs, even when the economy recovers. The tremendous financial pressure on the county has also presented a challenge to TDR sales in the county. Sharply reduced revenue from property taxes coinciding with numerous new expenses shifted onto the county by the state has made it difficult for the county to fund the purchase and retirement of TDRs at its previous rate.”
In Charles County, the program, which was established in 1992, has not enjoyed nearly the amount of success that Calvert’s has.
In many counties where TDR programs succeeded, the TDRs were frequently accompanied by a lot of downzoning, something Charles County has not experienced, said Charles County Planning and Growth Management Director Peter Aluotto.
“We’ve been very reluctant to do that,” Aluotto said. “The trick to making TDR work is there needs to be a market. There has to be a supply, and there has to be a demand. We have the supply, but in this county, we seem to lack the demand. A lot of areas in this county seem to be zoned with an ample amount of density already.”
Charles Rice, the Charles County PGM program manager for environmental programs, further attributed the program’s inability to gain footing in Charles County to Docket 90, the development agreement between the county and The St. Charles Cos. to develop more than 9,000 acres, which was established in the 1970s and effectively exempts the developer from the terms and conditions set forth in the TDR program.
“If the object was to make TDRs work or work better, then there can’t be any exceptions, and if we start excluding players, it’s hard to make it work,” Rice said. “If it could be done, if everyone across the board wanted them, then we’d have the supply and demand.”
“First ... St. Charles is zoned PUD — Planned Unit Development — and the density of St. Charles — 24,730 units — is set in Docket 90,” Craig Renner, a spokesman for The St. Charles Cos., wrote in an email. “We are not seeking to increase our density, nor do we have any plans to. Second, we already pay for the density level we have in St. Charles under Docket 90. However, instead of purchasing, or transferring, development rights from low density areas, St. Charles makes a number of commitments under Docket 90 that are either unique to St. Charles, like donating sites for schools, or commitments that are far more extensive than other communities, like our construction of the extension of St. Charles Parkway.”
Renner said The St. Charles Cos. has spent more than $50 million on improvements in the community, including the land for Mary Burgess Neal Elementary School; the land — 100 acres — for St. Charles High School, plus bringing the site to grade at a cost of $1 million; 40 acres for the baseball stadium; the construction of the extension of St. Charles Parkway; the widening of Billingsley Road from the landfill to the railroad tracks; and the widening of Piney Church Road from Billingsley to the stadium.
In 2011 and 2012, Aluotto said, there were “little sales” for TDRs within the county, and the average selling price was $5,750 per TDR sold.
“There are nearly 1,000 TDRs certified by the county and available for sale. This is a positive indication that landowners are willing to sell,” Aluotto said. “When the economy and housing market was strong, developers were purchasing TDRs to increase densities. However, the decline in the economy led to a flat TDR market. Developers also have the option of building at the base zone density without purchasing TDRs. This base density is often dense enough to satisfy market demand.”
In 2012 in Calvert County, 72 TDRs were sold at an average of $3,561 per sale, according to figures Cristo provided. Two had been sold so far in 2013, for $4,500 each.
But Renner noted that in good real estate markets TDRs do just fine.
“It’s also important to point out that the county’s TDR program worked when the real estate economy was strong; for example, in 2007 they sold 291 TDRs at a cost of $18,500 per TDR,” Renner wrote.
Local attorney Steve Scott attributed the program’s lack of momentum within the county to different factors.
“One of the theories is that the unit count or density in the development district permits enough so that [the TDRs] aren’t used,” Scott said. “It’s used to ramp up the density levels. There also might just be a lack of a large enough, robust enough receiving area” for the land.
Scott noted that a large amount of the land in the development district in Charles County as it currently exists is concentrated within St. Charles.
Before the housing market collapse, Scott said, the TDR market in the county enjoyed a fair amount of success, mirroring Aluotto and Renner’s sentiments.
“During the boom, the system worked pretty well ... and that lends to the idea that it is market-driven,” Scott said. “Maybe with the upturn in activity it’ll come back. I don’t know if it doesn’t work or if it’s broken or market-driven. ... It seemed to work before; maybe it can still come back.”
Scott doubted the problem with TDRs in Charles County had anything to do with landowners not wishing to sell their property, but rather that they might be waiting for the market to peak again to receive the most money per TDR sold.
La Plata farmer David Lines of the Balanced Growth Initiative, a group seeking to preserve rural property values by resisting downzoning in the current comprehensive plan update, felt that the TDR program in the county could be harmed by the “tier maps” proposed in the septic bill, specifically the addition of reduced zoning regulations in land designated as Tier IV, which would effectively “do away with the need” for TDRs in Charles County.
“There’s no incentive to purchase them if the land can be preserved without it,” Lines said. Lines also felt that the land designated to The St. Charles Cos. through Docket 90 created an “unfair situation” for developers in the rest of the county.
“One of the unintended consequences is that the land doesn’t get preserved, and so the program doesn’t work,” Lines said. “The farmers would like the land preserved, but they would like the respect for the people who want the land to purchase the preservation rights. They don’t just want it taken away from them. I think we could come up with some sort of permanent source of revenue to put into a fund to purchase development rights. The land would be preserved, and the farmers would get their money.”
While Sierra Club member and Oxon Hill resident Bonnie Bick took a hard line for reforming the TDR program, her reasons differed from Lines’. Bick feels the BGI-backed version of the proposed 2012 comprehensive plan, which governs land use in the county, would be ineffectual in terms of preservation.
“It’s really important that Charles County sees the value of this program. The BGI plan is counter to it,” Bick said. “The key point is that if you give away the density ... then nobody will buy the TDRs, and we’re already flooded with density.”
Bick said the Sierra Club has “spoken very forcefully” since the plan was still in its visioning phase in 2011 on the subject of TDR reform, and on the potential addition of a purchasable development rights program that would ensure all county citizens pay in to allowing land preservation, rather than just developers.
“It’s been used against us ... and yet those same people thank me for speaking out eloquently about the need for them,” Bick said. “A smart growth plan has to include a workable TDR/PDR program, and not just when the market is up. You can’t just give away the density.”
If the plan passes as it has been proposed, Bick fears that the TDR program in the county will cease to be.
“There would be very little need for people to buy density units. It’d be counter to a workable program,” Bick said. “The key is to not have these receiving zones in environmentally sensitive areas like the Mattawoman watershed. If we want to be in the 21st century, we’ll preserve our resources. We could have the best program in the country if we make this a priority.”