Fact Pack

Growth Management

As state and local economies grow, how development takes place is of great importance to the health of these communities. State government plays a vital role in growth management.

• Unmanaged growth is expensive.
• Residential developments usually return less revenue to local governments than it costs to provide public services. A recent study discovered that for every dollar taken in, it currently costs Loudoun County, Virginia, only $.50 to provide public services to farms, but $1.55 to provide public services to residentially developed land.(1) Other studies have estimated that the property tax yield of land in two-to-three-acre lots can be up to nine times lower than the same area in quarter-acre lots.
• Unmanaged growth can potentially yield less tax money for schools, police and fire stations, parks, and other public services. It can also undermine environmental progress because sprawl is damaging. (See the Surburban Sprawl Policy Issues Package for more information.)
• Development initiatives, like transfer of development rights (TDR) programs, help to alleviate these problems by concentrating growth in specially designated receiving areas.
• Urbanized land increased fifty percent from 51 million acres to 76 million acres from 1982-1997.(2)

TDR Programs Promote Preservation

• TDR programs have been successfully adopted by local governments, helping to preserve open space, agricultural land, historic sites, and environmentally sensitive areas, like forests and wetlands.
• There are 107 TDR programs in 25 states.(3)
• Montgomery County, Maryland, implemented a TDR program in 1981 and, as of 2004, has permanently protected more than 43,000 acres of open space and agricultural land.(4) In 1985, under the Montgomery TDR program, a local developer purchased 637 development rights credits from local landowners. With newly purchased rights, he was able to expand development on his receiving site from 200 units to 1200 units, while helping to preserve more than 3,000 acres of agricultural land.(5) The county government designates one development credit per five acres of a sending zone.
• Adopted in 1980, New Jersey Pinelands is believed to be the most ambitious TDR program in the country, encompassing one million acres of land and allowing transfers between 60 different municipalities. It has helped to preserve more than 31,000 acres and witnesses more than 40 TDR trades annually.(2)
• In 1989, Boulder County, Colorado, adopted the Non-Urban Planned Unit-Development Program (NUDUP) to encourage landowners with plots 35 acres and larger to set aside seventy-five percent of the land for agriculture uses like farming and grazing.(2) The program was modified a few years later to incorporate the transfer of development rights between the county and city of Boulder. More than 250 trades have aided in preserving roughly 10,000 acres with permanent conservation easements.(2)

Increasing Popularity of TDR Programs

• In April 2001, the Rhode Island Department of Environmental Management published a report that explored the possibility of TDR programs at the local and regional level. Specifically, the report focused on ways to protect watersheds in South County from development. The study examined different TDR programs from across the country at the county, local, and metropolitan level, identifying more than 100 active programs and focusing on 18 specific plans. The report found that TDR programs have been relatively successful as long as sending areas are appropriately designated and strong incentives for increased development potential in receiving areas are adopted.(6) It also highlighted that regional TDR plans are more difficult to put in place because problems arise in creating an incentive for local communities to exchange development rights.
• It has been shown that local governments tend to implement TDR programs in times of fiscal distress. A 2003 study surveyed land use planners and growth managers in Florida counties. Respondents were asked for a variety of demographic and institutional facts. The study found that when revenue from state management grants was reduced, counties were more apt to utilize transfer programs.(7) Additionally, the report found that real estate developers find TDR programs less threatening than existing land use regulations.