Charles County, Maryland
Charles County, population 146,551 (2010), is located 25 miles south of Washington, D.C., across the Potomac River from Virginia. Agricultural preservation has been a goal of Charles County for decades. In 1980, the County created an Agricultural Land Preservation Program sponsored by the Maryland Agricultural Land Preservation Foundation (MALPF). When farmers enroll in this program, they cannot develop their farms for five years. In return, the farmers receive tax credits and protection from nuisance complaints registered against normal farming practices by non-farm neighbors. The program also offers to purchase development rights in order to permanently preserve land for agriculture.
Despite these agricultural preservation efforts, the County continued to lose farmland to development. In the 1980s, the Agricultural Preservation Program purchased development rights on 223 acres of County farmland. However, in the five year period from 1982 to 1987, Charles County farmland declined from 84,000 acres to 68,000 acres, a loss of 16,000 acres. Consequently, when the Agricultural Preservation Element of the County’s Comprehensive Plan was adopted, it recommended the establishment of a transferable development rights program as an additional means of promoting farmland preservation.
In 1991, a consultant’s study concluded that TDR could be effective in preserving farmland. However, rather than adopting a TDR ordinance for all of the agricultural land in the County, this study recommended a program that would apply to a more manageable amount of farmland. Charles County followed up on that recommendation by adopting an ordinance in 1992 which allows for the transfer of development rights only from land enrolled in MALPF Agricultural Land Preservation Districts. That original ordinance was amended in 1993, 1994, 1996 and 2010. The description in the process section below is based on Article XVII Transferable Development Rights (TDRs) in Designated Agricultural Land Preservation Districts as that article appeared in the Charles County Zoning Regulations in November 2011.
In the Charles County program, sending areas are properties established as County Agricultural Preservation Districts under the program sponsored by MALPF. To be considered for a Preservation District, at least half of the land area of a farm must contain Class 1, 2 and 3 soils and the farm must have soil/water conservation improvements in place. As mentioned above, farmers who enroll in the Agricultural Preservation District Program cannot develop the property for a five year period. After five years, the farmer can chose to withdraw.
The zoning code allows one dwelling unit per three acres. However, as a practical matter, it is difficult to actually obtain this density due to regulations regarding forest management, storm water control, groundwater protection and resource preservation. As a result, the achievable density is often one unit per five acres.
However, as an incentive to transfer development rights, rather than develop on sending sites, transferable development rights are allocated at the rate of one TDR per three acres of land in an Agricultural Preservation District. Since the density allowed under the zoning code is one dwelling unit per three acres, the program offers only a one-to-one transfer ratio in theory. But, due to the difficulties mentioned above regarding building on sending sites, the program offers a practical transfer ratio that is actually slightly higher than one-to-one. One transferable right consists of three development options. Sending area owners can transfer these development options as well as the development rights.
The owner of a sending parcel can apply to the County Zoning Administrator for a certificate to verify the number of development rights available to that parcel. To apply for a certificate, the sending site owner must submit an application along with a plat and title search for the sending parcel. Based on this information, the owner receives a certificate which states the number of development rights available to the sending parcel.
If the sending site owner chooses to proceed, a covenant is prepared and recorded specifying the number of development rights to be transferred. The sale of any of these rights immediately encumbers all TDRs assigned to the sending site. These covenants are contained in a document known as an instrument of original transfer. This instrument also includes covenants documenting that the development rights have been transferred from the transferor to the transferee. After it is signed, the instrument is recorded with the County Clerk.
Severed development rights do not have to be transferred directly to a receiving site. The sending site owner can transfer these rights at any time and to any person the way any other property interests can be transferred. Transactions which occur after the original transfer are referred to as intermediate transfers. The County code specifies the required form for intermediate transfers as well as instruments of original transfer. For assessment and taxation purposes, severed TDRs are deemed appurtenant to the sending parcel until they are approved for use at a specific receiving site.
Many programs allow TDRs to be reattached to sending site if the site has been determined no longer suitable for conservation by a new comprehensive plan and/or a court decision. In contrast, Charles County allows sending site owners to buy back their development rights with few conditions other than that the sending site cannot ultimately have more than its original number of development rights.
The potential receiving sites are parcels zoned RL, RM, RH, MX, TOD, PRD, CER, CRR, CMR, AUC and WC. In the RL, RM, RH, MX TOD and PRD zones, TDRs can only be allowed by using cluster or planned development standards. The owners of land in these zones can use transferred development rights to exceed the density allowed in each zone as a matter of right up to the maximum density limits for each zone. Additional density bonuses are also available when at least 10 percent of the units in a receiving site development meet affordable housing standards. Consequently, Figure V-1 of the Zoning Regulations establishes a progression of bonuses. For example, the RL (Low Density Residential) zone has the following progression: baseline density – one unit per acre; with affordable housing density bonus – 1.22 units per acre; with maximum TDRs – 3 units per acre; and with maximum TDRs and the affordable housing density bonus – 3.22 units per acre.
A receiving site owner requests permission to use transferred development rights by submitting an affidavit of intent to transfer development rights in conjunction with an application for a subdivision, a site plan or whatever other approval is needed for the receiving site proposal. The County can grant preliminary approval of the proposed project based on this affidavit. However, final approval cannot be granted until the applicants demonstrate that they own the necessary TDRs, that a deed of transfer has been recorded permanently preserving land at the sending sites and that the TDRs have not previously been used.
In a 2007 study for Resources for the Future, Margaret Walls and Virginia McConnell concluded that the Charles County TDR program has both supply and demand problems. On the supply side, sending area land must be enrolled in the MALPF program, a requirement that not all farms can meet. The MALPF program pays about 75 percent of market value for a permanent easement, a level of compensation which is generally higher than the price that farmers would get by selling their TDRs. Consequently, landowners prefer to wait for MALPF funding even though these funds are limited.Demand for TDRs has also been low because of preferences for low density development in Charles County. Walls and McConnell found that most TDR purchases have occurred in the lower density receiving areas and that developers who used TDR rarely used the full density potential available to them. Consequently, even at low TDR prices, developers in Charles County appear to have little incentive to use this tool.Despite those conclusions, there are some reasons to believe that demand for TDRs will be stronger following the recession that started in 2008. Walls and McConnell estimated that just over 2,000 acres had been preserved by TDR. But a 2009 study* reported that TDRs had preserved over 4,000 acres. If TDR activity did in fact accelerate just before the recession struck, it might be because of increasing demand for higher density development in the northern part of the County. In 2010, Charles County added Activity Urban Center (AUC) and Waldorf Center (WC) zoning districts that allow high density residential development supported by public transportation. Waldorf, an urbanizing area in northern Charles County is only 28 miles south of Washington, DC. The AUC and WC zones have a residential baseline of 12 units to the acre and allow developers to use TDR to achieve higher densities. The willingness to continue using TDR in new zoning districts suggests that Charles County still finds TDR to be a useful preservation tool.
*Pruetz & Standridge. 2009. What Makes Transfer of Development Rights Work? Journal of the American Planning Association. Vol. 75. no.1.