Calvert County, Maryland, population 92,525 (2019), lies 35 miles southeast of Washington, D.C., on a peninsula between the Patuxent River and Chesapeake Bay. The TDR program here was initially adopted in 1978 and has changed more than once since then. The first sections of this profile summarize some of the program’s history and the last sections describes the program as it currently exists.

1999 Amendment

The Calvert County TDR program changed significantly in 1999, as detailed in a 2003 study prepared by Virginia McConnell, Elizabeth Kopits and Margaret Walls for Resources for the Future (RFF) entitled How Well Can Markets for Development Rights Work? Evaluating a Farmland Preservation Program (McConnell, Kopits & Walls 2003).

Prior to 1999, land in the FC (Farm Community) and RP (Resource Protection) districts could only serve as sending areas, upon owner application for rezoning to APZ (Agricultural Preservation Zone). Land in the R-1 and TC (Town Center) zones could only serve as receiving areas and land in the RC (Rural Communities) could be either sending or receiving sites depending on owner preference. Following the 1999 amendment, land in the FC and RP districts joined land zoned RC as eligible to send or receive TDRs. In addition, the R-2 zone was added as a third zone available exclusively as a receiving area. 

The County downzoned the FC, RP, RC, R-1, R-2, and Town Center zones in 1999 as shown in this table from the RFF study. This increased the motivation to use the TDR option rather than build on-site and it also increased the motivation for those owners considering becoming receiving sites since it created a lower baseline density.

A property owner wishing to sell TDRs must apply for a designation of Agricultural Preservation District (APD) and the county then certifies the number of TDRs allocated to the property. In most instances, the allocation is one TDR per acre minus five TDRs for each existing dwelling. The APD status is in effect for at least five years. During that time, the site must be actively farmed or forested. If no TDRs are sold after the five year period, the owner may remove the APD designation. However, after the first TDR is sold, a permanent easement must be placed on the entire property. The RFF study observes that this provision requires sending area landowners to have considerable belief in the longevity and success of the program. 

The RFF study points out that some sending area landowners were motivated to choose the TDR option by strengthened shoreline regulations instituted in 1989. Specifically, density is now limited to one unit per 20 acres within 1000 feet of tidal waters and no dwelling can be located closer than 100 feet of the shoreline.

The RFF study points out that the TDR program benefited in several ways from the County’s participation in the TDR market. In 1993, Calvert County started the Purchase and Retirement (PAR) program, which buys and retires TDRs. Between 1993 and 2001, PAR program transactions accounted for roughly one third of all transactions in a typical year. Stated in terms of TDR acquisitions, the County purchased about 100 of the 700 TDRs sold in 1993 and about 860 of the 1,700 TDRs sold in 2001.

In a second program adopted in 2001, Leverage and Retire (LAR), farmers preserve their land and are reimbursed by the County over time. In an example given in the RFF study, a landowner might receive tax-free interest payments over 15 years followed by a payment for principal at the end of 15 years. The County benefits by being able to protect more land with limited near-term expenditure. However, landowners also benefit by deferring income into years when they plan to be retired and earning less income from other sources. As of 2003, the PAR and LAR programs together preserved 3,371 acres, or approximately 25 percent of all the land preserved under the TDR program at that time. 

The RFF study found that the average price paid for TDRs, (in 1999 dollars) rose from $1,125 in 1983 to $2,500 in 1993 and remained relatively constant for the next ten years. The study attributes some of the price stability between 1993 and 2003 to the County purchase programs with their annually announced prices for TDRs. According to the RFF study, County purchase prices in 2002 stood at $2,700 per TDR.

Even though the prime target for preservation is land zoned FCD and RPD, land within the RC zone can also qualify as a sending area. Nevertheless, the RFF study indicates that almost 80 percent of the land designated APD was previously zoned FCD and RPD. Since the FCD and RPD zones contain the best farmland in the County, the TDR program appeared to be preserving the land most in need of preservation. 

The RFF study found that receiving sites occurred most frequently in the northern portions of the County, the area closest to Washington DC, Annapolis and Baltimore. Receiving site projects were almost always located in the RC zone, where the use of TDRs allows developers to go from one unit per ten acres to one unit per two acres. In other words, developers were using TDR to increase from very-low density development to low-density development. As of 2003, they rarely used TDR in the three zones that can only offer receiving sites: the R-1 and R-2 zones (with baseline densities of one unit per two acres) and the TC zone (with a baseline density limit of two units per acre.)

Finally, the RFF study observes that the success of this program was greatly helped because the County declined since 1983 to rezone land without TDR acquisition. This commitment to the program undoubtedly increased motivation for participation on the part of both sending area owners and receiving area developers. However, according to the RFF study, this commitment also greatly reduced the amount of County time and resources that previously were consumed in responding to applications for zoning changes and exceptions. As of July 2002, the RFF study reported that over 19,600 acres were designated as APD. Of this total, almost 13,000 acres were permanently preserved as the result of the sale of 12,664 TDRs. This total indicated that Calvert County was maintaining its position as one of the most successful TDR programs in the nation. Since Calvert County’s goal is the protection of 40,000 acres of agricultural land through all preservation programs, the TDR program alone had itself accomplished almost one-third of that objective.

2012 Study

In December 2012, Margaret Walls revisited the Calvert County program with a report published by RFF: Markets for Development Rights: Lessons Learned from Three Decades of a TDR Program (Walls 2012). Between 1989 and 2003, the average price of a TDR was $3,350. However, because Calvert County requires five TDRs per bonus receiving site dwelling, this added $16,750 in cost on average per bonus house. Between 1980 and 2001, most subdivisions, non-TDR as well as TDR, occurred in the RCD.  Walls writes that Calvert County followed its 1999 zoning changes with another downzoning in 2003 that changed minimum lots size to 20 acres in rural zones and four acres in the residential zone. Owners could essentially regain the densities allowed under the post 1999 rezoning by buying TDRs. Walls reports that these 2003 changes were aimed at redirecting the use of TDR from rural areas and into the residential zones and town center but concludes that the 2003 amendments did not achieve that goal since subdivisions between 2003 and 2012 continued to occur primarily in the RCD. 

The recession that started in 2008 greatly reduced TDR sales. For example, the average number of TDRs sold per year was 534.3 from 1983 to 1998, 787.7 from 1999 to 2007, and 187.5 from 2008 to 2011. Walls attributes the high activity in the middle period to the downzonings that occurred in 1999 and 2003. 

Since 1993, the county’s PAR program has purchased and retired TDRs in a program the fixes purchase prices each year. Between 1993 and 2011, county purchases accounted for 38 percent of all TDR sales. Walls notes that the county’s relatively high purchase prices tended to create high private TDR prices as well. At $6,000 per TDR and five TDRs needed for one bonus dwelling, the TDR option cost $30,000 which was 6.6 percent of the retail price for a $450,000 single-family dwelling in a low-density subdivision but 12 percent of a $250,000 townhouse in a town center. Since a permanent easement must be recorded after the sale of the first TDR, a lack of demand left 11,000 TDRs awaiting buyers as of 2012. The PAR purchased some of these TDRs but could not absorb all of the supply. 

As of 2011, nearly 16,400 TDRs had been sold and over 23,000 acres had been preserved by TDR. Walls credits this success partly to the fact that Calvert County allows receiving sites in rural areas where developers are motivated to exceed low baseline densities. However, critics argue that the program has not achieved the goal of redirecting development into town centers and has not done enough to curb the fragmentation of farming areas. 

Current Program  

In the three years from 2016 through 2018, the Calvert County TDR program  recorded the following activity:

• 2016: 58 TDRs sold at an average price of $3,100
• 2017: 179 TDRs sold at an average price of $2,775
• 2018: 238.5 TDRs sold at an average price of $6,043.

As of August 2020, 12,000 TDRs are available. Of this total, 8,000 could no longer be reattached to sending sites because at least one TDR has been sold and a permanent easement recorded. Because no TDRs had yet been sold from other sending sites, the remaining 4,000 TDRs could be removed from the program and become available again for onsite use after completion of the required time period. At an August 18, 2020 meeting, staff proposed changing the number of TDRs needed per bonus unit in the Prince Frederick, Lusby and Solomons town centers as follows:

• Five TDRs per bonus single family dwelling on lots greater than 10,000 sf;
• Four TDRs per bonus single family dwelling on lots 10,000 sf and less;
• Three TDRs per bonus three-bedroom, multiple family dwelling; 
• Two TDRs per bonus two-bedroom, multiple family dwelling; and
• One TDRs per bonus one-bedroom, multiple family dwelling over a density of one dwelling unit per acre.

According to the author of this newspaper item, these changes, if adopted, would increase the number of TDRs required for all of these project types except the one-bedroom units in an effort to deal with backlog of unsold TDRs (Myers 2020). However, when this profile was written in December 2020, those changes did not appear in the TDR code. 

Code As Of December 2020

As of December 7, 2020, the Calvert County zoning ordinance had the following components. 

Farm and Forest & Rural Community Districts – The zones previously called the Farm Community and Resource Preservation districts are now known as the Farm and Forest District (FF). In the FF and Rural Community (RC) districts, the density here is one lot per 20 acres for land not within an Agricultural Preservation Overlay District (APD). (Exception Lots and Family Convenience Lots are also possible as discussed in the code.) When an owner in the FF (but not an APD) elects to become a receiving area, this baseline can increase up to one lot per ten acres with the retirement of five TDRs for each additional lot. When land in the RC becomes a receiving area, the baseline also can increase to not more than one lot per ten acres (with the retirement of five TDRs per each additional lot) but provisions vary depending on whether the land is within or outside the one-mile radius of Town Centers. 

When a property owner chooses to enroll in and is granted an approved APD, the number of residential lots allowed varies depending on the size of the APD:

• Less than 25 acres, no additional lots in addition to the existing house
• At least 25 but less than 50 acres, one lot in addition to the existing house
• At least 50 but less than 75 acres, two lots in addition to the existing house
• 75 or more acres, three lots in addition to the existing house

Residential District – Properties in the Residential District can also be sending or receiving zones. When owners choose to becoming sending areas and an APD is approved, the number of residential lots allowed is the same as APDs in the FF and RC zones.   

When owners of property in the Residential District decline to pursue an APD, the baseline density is one unit per four acres (with special provisions for Family Conveyance Lots). Owners of land outside a one-mile radius of Town Centers who choose to become receiving sites can achieve a maximum density of one lot per two acres with the retirement of five TDRs for each additional lot. Owners of land inside a one-mile radius of Town Centers who choose to become receiving sites, can achieve a maximum density of four lots or units per acre with the retirement of five TDRs for each additional lot or unit.

Town Centers – In receiving areas zoned Town Center, five TDRs are required for each dwelling unit in excess of one unit per acre. The components vary depending on which of the seven Town Centers the receiving area is located in and often whether the project is single family, duplex, townhouse or multi-family.

For example, in the Dunkirk Town Center, TDRs can have the following impact on density per acre:

Forest Conservation TDR Program 

In a related mechanism called the Forest Conservation TDR Program, owners of forested land enrolled in the APD program can sell TDRs to receiving site developers who use these TDRs to meet forest conservation requirements. Each Forest Conservation TDR permanently preserves one acre of forested sending area land in a Forest Retention Area subject to an approved Forest Management Plan. The county allows Forest Conservation TDRs to be used only after techniques for retained existing forests on site have been exhausted. 

Outcome

By 2019, the TDR program in Calvert County had preserved over 23,000 acres, which is over half of the county’s 40,000-acre goal. This success largely results because low baseline densities motivate both the preservation of sending areas and the demand for TDRs in receiving areas. The county has also curbed circumvention of TDR by declining to rezone potential receiving areas without the use of TDR. Because land in three zoning districts can become receiving sites as well as sending sites, the program has been criticized for contributing to the fragmentation of agricultural areas. However, the density allowed via TDR in the two largest zones is one unit per ten acres, a density that program supporters see as a reasonable tradeoff for accomplishing the amount of permanent preservation achieved in Calvert County. The county calls out land preservation as one of its climate action tools and views TDR as a way of mitigating the effects of sprawl and adapting to increasing risks from wildfire, floods, storm surge, sea level rise, and other hazards exacerbated by climate change.  

Resources

McConnell, Virginia, Elizabeth Kopits, and Margaret Walls. 2003. How Well Can Markets for Development Rights Work? Evaluating a Farmland Preservation Program. Washington, D.C.: Resources for the Future.

Myers, Dick. 2020. Planners Deny TDR Changes. Calvert County Times Newspaper. August 31, 2020.

Walls, Margaret. 2012. Markets for Development Rights: Lessons Learned from Three Decades of a TDR Program. Washington, D.C.: Resources for the Future.