Transferable Development Rights:
A Market Approach to Preserving Farmland
and Open Space

by Richard James, P. Eng., Richard James & Associates.


British Columbia has a limited amount of agricultural land. Much of it is also located in areas that are close to, or adjacent to, urban areas and is under continual development pressure. To address this, in the 1970's the government introduced the Agricultural Land Reserve (ALR). This effectively prohibited development on designated agricultural land. Land can be excluded from the ALR only if it can be shown that it is not "viable farmland". This however, impacts on the ability of farmers to realize an "Open Market" price for their land when they wish to sell it. This is particularly difficult for those who have made a lifetime out of farming and wish to retire. They find that they literally can't afford to.

One way of addressing this dilemma, that has been used in some parts of the USA, is the concept of "Transferable Development Rights" (TDR). We are starting to see this idea used in BC in urban settings where a developer can sometimes transfer "Density" from adjacent properties if further development of them is restricted. The net result can be the same overall density but distributed differently between property parcels. However, at this time this is pretty much an ad hoc process used between parcels with common ownership or negotiated on an individual basis with no formal plan to make it happen.

Montgomery County, Maryland, has been using TDR's since the early 1980's. Lying just northwest of Washington DC, the county has a population of 800,000, yet has managed to preserve 39,000 acres (15,600ha), nearly 1/3 of it's land area, for agriculture and open space. 75% of this area was protected through TDR's.

How does it work? To formalize the process the Community Plan must designate appropriate areas as eligible to sell and receive the transferable rights. This, of course, implies that one Municipality or Regional District either controls both types of land, or can negotiate a reciprocal agreement, possibly under a comprehensive Regional Plan.

Thus an open market in these rights is created. They can be sold in the same manner as land, and the sale can (must) be recorded on the Land Title for both parcels. This enables urban land to be developed, farmland to be protected, and the farm landowner to be put back into the same position as any other landowner who can apply for, and often get, the rezoning to a higher density that brings with it a significant increase in the value of the property.

The Montgomery County example works by allowing rural landowners to sell rights to develop land to the density that their land was zoned at (which was often one dwelling per 5ac (2ha)) before the plan was implemented. On implementation the plan froze urban residential land at it's previous zoning, but down zoned rural land to one dwelling per 25ac (10ha). This approach also eliminated the rezoning process for residential land. The major criteria are now its serviceability and infrastructure costs rather than the ability to convince a Municipality to rezone land on a case by case basis.

Could this approach work in BC? I believe that the answer is a qualified yes. Provided we can come to grips with the desirability of cooperative planning between our fractured municipal structure, that we can clearly and unambiguously define the receiving zones where development (to some stated ceiling) is desirable, and that we can set the development value of the preserved land in a equitable way, the basic concept appears to be sound.

Background information on the Montgomery County, MD, approach was obtained from an article in "LandLines", a newsletter published by the Lincoln Institute of Land Policy, September 1994