Berthoud, Colorado, population 7,946 (2018), adopted a TDR ordinance in 2000 that made preservation so simple, the technique became a model for many subsequent programs. Berthoud is a town in the conurbation known as the Front Range on the eastern edge of the Rocky Mountains in both Larimer and Weld counties. In its location 45 miles north of Denver and 20 miles south of Fort Collins, Berthoud has been under extreme growth pressure for decades. It is estimated that the town grew by less than six percent between 2000 and 2010, but was estimated to have a population of over 9,000 in 2019, which would represent an increase of almost 80 percent in nine years.
In 1999, Berthoud tried to fashion a traditional TDR program but realized it would take time to resolve several issues. For example, there were disagreements about establishing desirable patterns of preservation versus growth, making it unlikely that the town would be able to quickly designate sending and receiving areas. Speed of adoption was important since Berthoud was anticipating large numbers of development applications.
Berthoud solved these problems with an ordinance that required developers to contribute to preservation in conjunction with zoning changes that increased density. Following a rezoning, the maximum density allowed under the prior zoning became the TDR baseline and the new zoning classification determined the maximum density allowed with TDR and established the requirements needed to exceed baseline. For each new residential dwelling, developers were required to permanently preserve one acre of land or pay a density transfer charge (DTC) of $3,000 per additional single family residential unit or $1,500 per extra multiple-family residential dwelling unit. The town dedicated 94 percent of DTC revenues to the preservation of land and allowed the remaining six percent to cover administrative costs.
Using this approach, Berthoud eliminated the administrative complexity of traditional programs that require the issuance, transfer, and extinguishment of actual TDRs. Berthoud was able to target the highest priority properties for preservation since the town itself decided where to spend DTC revenue. Berthoud’s DTC program also allowed the town the ability to quickly adopt a preservation mechanism without having to undergo the time-consuming and potentially contentious task of deciding what land deserves permanent protection and what areas are most appropriate for more intensive development. Economic analysis was necessary in order to develop the amount of land or DTC needed to produce a program that was economically viable for developers yet resulted in meaningful preservation. However, because DTC option generated cash rather than TDRs, Berthoud was able to accomplish preservation regardless of fluctuations in sending site property values. Additionally, developers in Berthoud knew the maximum amount they would have to pay in advance, allowing certainty in the preparation of their budgets and relieving them of the time, uncertainty and effort involved in having to find and acquire actual TDRs. After over 400 acres, Berthoud suspended its program in 2009 in response to the Great Recession. As another benefit of Berthoud’s approach, the town did not have to address the question of floating TDRs since the program did not use TDRs: compliance occurred either in cash or completed preservation.
In 2002, the Berthoud approach was featured in an issue of the American Planning Association’s Planning Advisory Service Memo using the nickname ‘TDR-Less TDR’. This publication discusses the disadvantages as well as the advantages of DTC. As of 2021, at least 20 programs offered receiving site developers a DTC option and another six programs used DTC exclusively instead of actual TDRs. The nuts and bolts of building a DTC program are included in The TDR Handbook: Designing and Implementing Transfer of Development Rights Programs, published by Island Press.