A new draft of the state’s Transfer of Development Rights (TDR) legislation is now available for review.
State officials noted with the announcement this week that TDRs are already enabled in state law and are in use in several jurisdictions inside Delaware.
But the new draft legislation, which was developed by a committee that included developers, farmers, state agency representatives and others, is designed to enhance current efforts by enabling county-level TDR banks and allowing receiving zones to use a special mechanism called Special Development Districts to plan for and fund needed infrastructure.
The draft TDR bill, and a one-page “highlights” document, are now both open to review and public comment. (Visit the Web site at http://stateplanning.delaware.gov/livedel/news.shtml to view both documents and for more information on the Livable Delaware initiative from which the TDR legislation springs.)
In the draft, legislators state: “The General Assembly finds that a critical need exists to provide for orderly growth that maintains a desirable quality of life, to encourage well-designed and efficient communities rather than inefficient sprawl, to preserve farmland, cultural and historic lands, and other sensitive lands identified by the State and local governments, and to assist in the creation and maintenance of a market for the sale and purchase of development rights.
“The adoption of a transfer of development rights and banking program that encourages and facilitates the voluntary participation of county and municipal governments is a means of achieving those objectives,” the draft continues.
The aim of the legislation is to establish a framework, guidelines and incentives for the adoption of transfer of developments rights programs by counties and municipalities that will “serve to direct growth and development to areas having adequate infrastructure to accommodate such growth and development, while providing permanent protection to valuable agricultural lands, open space, cultural and historic lands, and critical and sensitive areas.”
In essence, the TDR system allows developers to develop a parcel — called the “receiving parcel” — at levels above normally permitted density.
In exchange for the additional density that developer is required to purchase the development rights of other parcels — “sending parcels” — which from that point forward would have development restrictions upon them aimed at preserving open space in those locations. The entire process is designed to be a way to offset increased density in the sought-after “receiving parcels.”
ESDA, Level 4 areas still up for grabs
Notably, the draft legislation announced this week specifically states, “The transfer of TDR Units to parcels in areas designated by the Office of State Planning Coordination as Investment Level 4 shall not be permitted unless the area becomes a designated growth area pursuant to a certified local government comprehensive plan.”
That attempts to address increasing concern over the development of areas of eastern Sussex County where the existing rural roads and other rural-type infrastructure have struggled to deal with heavy development pressure in proximity to the coast.
While county officials have routinely approved such development, infrastructure improvement has been lacking, and the state will generally not aid with infrastructure improvements in its designated Level 4 areas under Livable Delaware.
However, Sussex County may have dealt with part of that concern in designated the Environmentally Sensitive Developing Area, which points to both to environmental concerns and to existing development pressures that are rampant in those areas within the county.
The ESDA designation could thus be the key in an exemption from the prohibition on increased density through TDR as mandated above, where the two areas — state Level 4 and county ESDA — overlap, which is frequent. The result could water down the legislation’s impact in Sussex County.
Special development districts to fund infrastructure
The legislation also creates a mechanism by which local governments can finance infrastructure — special development districts (SDDs).
Such districts have been discussed in front of Millville officials recently. The case was made there that the districts, with their special ability to levy taxes upon property owners, help fund – up front – the building of infrastructure such as roads, utilities and public facilities without putting additional debt burden on government.
Instead of placing that financial burden on developers in the place of government, the SDDs allow investors to buy in to future profits by fronting the money for infrastructure, while future property owners would pay back that money on a yearly basis rather than with an additional punch on the price tag of their new home.
This tool could now also be used by county government or municipalities, as a way to help finance needed infrastructure as growth in the area continues at a rapid pace.
Questions and comments about the TDR draft legislation are being directed to the Office of State Planning Coordination, at (302) 739-3090.