The City of Santa Barbara, population 88,410 (2010), is located between the Pacific Coast and the Santa Ynes Mountains, 80 miles northwest of Los Angeles. Due to the beauty of its setting and the charm of its historic core, the city has a high level of demand for new development.

To preserve its character and quality of life, Santa Barbara adopted a General Plan update which establishes a cap of three million square feet of non-residential development over 20 years and acknowledges that the City prefers the remodeling, rehabilitation and reconstruction of existing buildings to the approval of extra floor area. Additionally, the voters of Santa Barbara adopted the growth limit into the City’s Charter.

In 1991, Freilich, Stone, Leitner & Carlisle, the City’s legal consultants, prepared background papers and led study sessions on alternative TDR approaches as well as the planning and legal implications of each. During this phase, it was recognized that the City’s current limits on commercial floor area could discourage the needed recycling of larger, obsolete buildings; for example, without some kind of incentive, the owner of a non-conforming commercial building would have little motivation to demolish a larger building in order to build a smaller building which complies with current code.

In response, the City adopted an unusual Transfer of Existing Development Rights (TEDR) program in 1992. Unlike most TDR programs, which deal with transfers of development rights that have not yet been exercised, Santa Barbara approved a system that transfers rights from buildings already in existence. Under this system, a property owner can demolish a large structure, replace it with a smaller building and receive compensation through the ability to transfer the difference between the floor area of the demolished building and the floor area of the new building to an appropriate receiving site.

The provisions for this program, contained in Chapter 28.95 of the Santa Barbara Zoning Code, remain unchanged since 1992. Consequently, this profile is identical to the case study that appeared in the 2003 book Beyond Takings and Givings.

Process

Under Santa Barbara’s TEDR ordinance, existing floor area is the amount of existing, nonresidential floor area on a sending site. In addition, three other types of floor area may be transferred:

• Approved Floor Area, or floor area that has been approved by the City but is not yet built;
• Demolished Floor Area, or floor area demolished after 1988 and not reconstructed; and
• Converted Floor Area, or floor area converted from non-residential to residential use after 1988.

Development plans for both the sending and receiving sites are submitted as one project and considered as one project for the purpose of environmental review under the California Environmental Quality Act. Likewise, a transfer is permitted by way of a single approval of the plans for both the sending and receiving sites. Rights may be transferred from more than one sending site to a single receiving site and, conversely, from one sending site to more than one receiving site. In addition, the ordinance specifies that the sending site cannot remain vacant. All development rights can be transferred from the sending site only if the site is used for residential development or if the site is dedicated to the city for use as a park, parking lot or other public use.The amount of development rights that can be transferred from a sending site is the difference between the floor area eliminated from that site and the non-residential floor area of the structure constructed or proposed for construction on that site. After a transfer, the amount of development on a receiving site cannot exceed the density limits of the baseline zoning for that site. The incentive for the developer of a proposed receiving site is not additional density but rather the ability to be develop within Santa Barbara’s annual growth cap.

To approve a proposed transfer, the Planning Commission must find that the proposed developments are consistent with the general plan, compliant with the zoning code and appropriate for the neighborhood and the entire community. The code requires the Planning Commission to place conditions on the approval of transfers which ensures that documents are recorded on both the sending and receiving sites to identify the amount of non-residential development potential remaining on the sending site and the amount of floor area transferred to receiving sites. If the existing development rights are proposed to result from the demolition of a building on a sending site, that demolition must be completed before the building permit for construction of the building at the receiving site can be issued.

Program Status

Under the Santa Barbara TEDR program, potential buyers and sellers of development rights must find one another and propose a simultaneous demolition/construction plan for two sites; this could generate a disincentive to use the program. On the other hand, the demand for additional development in Santa Barbara provides the owners of potential sending sites with an incentive to use TEDR since they can recycle their properties to new, conforming structures and still sell the unused existing development rights. Likewise, potential receiving site owners are motivated to buy existing development rights in order to obtain approvals to develop within the City’s annual growth limitations.

By 2001, the TEDR program had been approved for five projects.

• In the first project, a 57,521 square foot office building was approved based on the demolition of a 44,600 square foot bowling alley on the receiving site, a 3,000 square foot allocation and the transfer of the remaining 9,921 square feet from two separate sending sites.
• The second project involved the re-distribution of floor area between two proposed buildings: a 10,509 square foot commercial building and a mixed use building with 3,493 square feet of commercial space and two residential units.
• At the third project site, a 1996 approval allowed the development of a grocery store on a receiving site using TEDRs from two sending sites. The grocery store was not ultimately built. In 1999, the City approved a redesign of the receiving site as a commercial complex.
• A 23-room hotel was approved through the transfer of 8,429 square feet of commercial floor area from approved projects at two separate sending sites.
• TEDRs from three sending sites were approved to allow the redistribution of 162 vacation ownership/hotel units in downtown Santa Barbara.