Beginning with Habitat


Land Use Ordinance Tools

1. Introduction | 2. Wildlife Habitat Overlay District | 3. Transfer of Development Rights | 4. Open Space Impact Fees | 5. Conservation Subdivision Ordinance | 6. Land Use Ordinance Performance Standards

Yellow lady's slipperTransfer of Development Rights and Development Transfer Fee

Introduction to Transfer of Development Rights

In concept, Transfer of Development Rights (TDR) is a tool that can achieve land conservation and growth objectives at a variety of scales, either within a single municipality, or regionally if committed to by multiple municipalities. A TDR program encourages land conservation in rural areas (sending areas), identified based on an open space plan or similar objectives, and transfers development to growth zones (receiving areas), designated by local land use plans. By providing incentives, TDR programs can benefit both the rural landowner, who may not wish to develop currently, but for whom compensation would better enable them to hold onto their land, and the developer seeking the ability to build more units than current zoning allows. A successfully implemented TDR program offers towns the ability to accomplish two complimentary goals in one transaction: strategic open space preservation to protect habitat, recreational opportunities and rural industries, and development directed to traditional town centers and designated growth areas.

TDR allows rural landowners in the identified sending area to voluntarily transfer their right to develop a certain number of housing units based on existing zoning to a parcel within a pre-determined receiving area or growth zone. Once the units are "transferred" by the rural land owner, the rural landowner does not surrender ownership or all uses of their property, only the ability to build or subdivide the equivalent number of units transferred. A conservation easement or deed restriction is crafted to ensure the future use of the development potential is prohibited in perpetuity while still often allowing traditional uses such as farming and forestry uses.

In theory, if carefully developed, TDR can be an attractive growth management tool and an attractive way to protect land in strategically identified areas with high conservation values. It offers incentives to concentrate development close to public infrastructure resulting in long-term cost savings to the community while protecting open space at little cost to the taxpayer. In order for a TDR program to be successful, however, several criteria must be met. First, a town must be experiencing adequate development pressure and market demand for 'in town' units to encourage developers to seek greater density than is currently allowed by ordinance. Secondly, sending and receiving areas must be clearly identified and based on identified community priorities. The development receiving area must have suitable developable land area or redevelopment opportunity available and must be relatively free from potential future not-in-my-backyard concerns that could derail a developer's will to pursue greater density. A TDR program should be part of a town's overall growth management program as well and result from a town's comprehensive planning process. The sending areas, or those areas to be conserved, should be well-defined, discrete areas identified through public process such as in an open space plan. Public education and community support are also critical to the success of a TDR Program. TDR is only effective under certain conditions and, therefore, it is important for a town to have a clear picture of its future before this type of program can work.

Unfortunately, what works well in theory may not be as effective (yet) in practice. There are certainly TDR success stories in other parts of the northeast such as Montgomery County, Maryland and the Pinelands in New Jersey. In Maine, although some towns have TDR programs on the books, none are mandatory and few are being actively promoted at this time.

An alternative approach: Development Transfer Fee Program

While Transfer of Development Rights (TDR) programs have largely not been successfully implemented in Maine at this time, a slight revision to the traditional TDR approach is showing promise. A Development Transfer Fee program is based of the same basic concept as TDR, where development rights are transferred from designated rural (sending) areas to designated growth (receiving) areas. The difference is that a Development Transfer Fee program is fee-based using a third party as the broker. A developer pays a transfer fee to the town. This payment enables them to buy and build an additional number of units in the designated growth area than would be allowed under current density limits. In turn, the payment is deposited into a town fund for land acquisition. Accumulated funds are then used to conserve lands in the designated rural sending areas once an opportunity becomes available. Through this process a developer can build at greater density where it is most appropriate and willing land owners are compensated for voluntarily giving up their rights to develop. The overall goal of directing growth to designated areas while conserving important parcels of open space can still be achieved.

The advantages of the Development Transfer Fee program are that it is simpler for the developer than a TDR Program. The developer simply pays the fee for the additional density bonus units and doesn't have to have a conservation parcel and willing land owner identified prior to submitting a project. Conservation can occur whenever there is a "ripe" opportunity and conservation decisions are left in the hands of the municipality rather than requiring the developer to work out the details. Towns can work more closely with landowners of specific parcels with important values to negotiate a protection effort.

Example Tools

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