Farmington, Utah, population 25,339 (2019), sits between the wetlands on the eastern shores of the Great Salt Lake and the Wasatch Mountains, 17 miles north of downtown Salt Lake City. In 2018, the city adopted what is now Section 11-28-240: Transfer of Development Rights/Lots (TDR) in its zoning regulations. 

Farmington uses the term “transfer lot” to describe a development right transferred from a sending site preserved as parkland or open space. The number of transfer lots allocated to a sending site is determined by the development potential allowed by the zoning code.  

The owners of receiving sites can apply to use transfer lots to achieve subdivision designs with alternative lot sizes and other exceptions that effectively increase density. Compliance can be by cash payment and all revenues must be used exclusively to acquire or improve park land. By resolution, the city designates sending and receiving zones.

A receiving area must be in the same service area as the sending area based on whether the general plan determines the sending area to be a regional, community or neighborhood park. Even using transfer lots, at least 20 percent of subdivisions larger than 20 acres must remain in open space. 

Transfer lots can only be used to grant special exceptions when the city establishes a finding of blight for the receiving area. Section 11-3-045 of Farmington’s zoning code explains that a special exception can be granted when a TDR is established because of blight.

Transfers are documented by development agreement recorded before or simultaneously with recording of the receiving site’s final plat. This agreement must include:

• Anticipated value of the transfer lot to be paid from the receiving lot owner to the sending lot owner;
• Method and timing of payment;
• Cost and timing of improvements and construction;
• Cost and timing of other costs including city fees and finance costs;
• Cost and timing of land payment; and
• Developer profit percentage. 

Farmington banked 100 TDRs from a site purchased for a city park and had sold 35 of these TDRs as of April 2019, as reported in a session at the American Planning Association’s 2019 National Planning Conference. The prices paid for these TDRs ranged from $3,500 to $85,000 each.