Hillsborough Township, population 38,303 (2010), is located in Somerset County in central New Jersey only 40 miles southwest of New York City. In the 1970s, Hillsborough Township was looking for a way to preserve environmentally-sensitive areas and land for schools and parks as well as farms. Consequently, in 1975, the Township revised its zoning ordinance, creating lower density zoning districts at the periphery of the Township. The owner of a parcel constrained by the density limits, sued the Township for approval of a proposal to transfer development rights from that parcel to another parcel owned by the same developer. In response, the Township adopted a transfer of development rights ordinance in 1975. However, the Township immediately became concerned about the legal and logistical considerations regarding ownership of the preservation parcels which would be deeded to the Township through this process. Consequently, the ordinance was revised in 1976. The TDR ordinance was then amended in 1981 and again in 2001.
The current version of the ordinance states that the transfer of development credit provisions are designed to provide flexibility, preserve agricultural land, protect environmentally sensitive land and help reduce the cost of providing roads, utilities and services to residential development. Specifically, the ordinance is intended to allow some economic benefit for keeping environmentally-sensitive lands undeveloped. To implement those goals, Hillsborough allows the owners of land in five zoning districts to increase density above the baseline zoning in return for dedicating land to the Township for schools, open space or other public uses.
The sending sites, or lands to be deeded to the Township, must be at least 25 acres in size and located in the RS, R1, PD, CR or TC zoning districts. The 2001 amendment added a new standard, prohibiting sending sites from being more than 80 percent encumbered by wetlands, open water, floodplain or utility easements. The transferable development credits are simply the number of units which could be built on the sending site under the applicable baseline zoning. Technically, the transfer ratio is one-to-one. However, Hillsborough does allow transferable credits to be created for half the acreage of the sending site occupied by easements or environmental constraints, such as slopes, surface water and flood plains. In this way, the Township provides landowners with qualifying sending sites an opportunity to gain some economic return from land restricted from development by environmental conditions and other constraints.
When the receiving site development is approved, the property owner must deed the sending site to the Township with restrictions limiting its future use to open space, school sites and other municipal or quasi-public activities. Before accepting the sending sites, the Planning Board and Township Committee must ensure that ten standards are met regarding the appropriateness of the proposed acquisition.
The Township also establishes the number of development credits available at the sending site. Concurrently, the Planning Board renders a decision on the development proposed to receive the transferred credits. All development credits created by the conveyance of the sending site to the Township must be used by the receiving site project or be forfeited.
The Township reserves the right to undedicate the sending site in the event that four conditions occur.
- The sending site has not been improved for public purposes.
- Major public improvements have increased the developability of the sending site.
- Another site, at least as large, has been dedicated elsewhere in the Township to replace the undedicated site.
- The replacement lot is just as capable of serving the public purpose as the originally-dedicated site.
The receiving sites can be any properties in the RS, R1, CR, TC and PD zones. In the R1 zone, the use of TDC can increase density from a maximum of 1.5 units per acre to 2 units per acre for detached single-family residential units, a density bonus of 33 percent. In the CR zone, the zoning code limits by-right density to two detached single-family units per acre while allowing three detached single-family units for projects using TDCs, a 50 percent increase. In the PD zone, eight detached single-family units are allowed as a matter of right; the code does not specify a maximum density for projects using TDCs in the PD zone.
According to an earlier version of the code, in the Town Center (TC) zone, the by-right density was four detached single family units per acre compared with five under the TDC option. Under the 2011 version of the code, the TC zone has been separated from other residential zones and the density bonus available via TDC is not clear. Furthermore, special requirements now apply to transfers to the TC zone. For example, no more than 150 dwelling units may be transferred into the Town Center; development rights used in the TC must come from the AG, MZ and CDZ zones or farmland assessed property in other residential districts; and the following allocation ratios apply.
- AG: one dwelling unit per 6.25 acres
- MZ: one dwelling unit per 15 acres
- CDZ: one dwelling unit per .25 acres
- Farmland assessed properties exceeding 20 acres in other residential districts: one dwelling unit per two acres.
The developer who prompted adoption of the TDR provisions by suing the Township was delayed by the 1976 code revisions and never used Hillsborough’s TDR provisions. According to a 1981 study by Robert Coughlin, in 1978, another developer with land in a development zone purchased a farm in a preservation district. By purchasing the farm, the developer obtained 30 development rights at a cost of about $3,000 each. Due to the higher cost of land, development rights on the parcel in the development zone cost about $4,000 each. The Township approved a development on the receiving site with 30 more dwelling units than the maximum allowed by the base zoning. The sending site was preserved by deeding it to the Township. When Coughlin prepared his study, the Township was considering leasing the 70-acre sending site to farmers. In addition to preserving farmland, the sending site also provided an open space buffer for a Girl Scout camp adjacent to the protected parcel.
In 1981, Coughlin found mixed reactions to the TDR program. The Township planning director was satisfied with the program because it was easy to understand and manage. But a former Planning Board chairman was concerned that transfers could create a patchwork quilt of publicly owned land which might or might not lend itself to agriculture on a long-term basis.
The Township has acquired additional sending sites using TDR but no estimate of the amount of acreage preserved could be located.