Livermore, California

Livermore, California, population 89,699 (2019), lies in central Alameda County, 40 miles east of Oakland. In order to preserve its wine country heritage, the city adopted the South Livermore Specific Plan which included a very successful program for mitigating the loss of vineyards plus a TDR mechanism that preserved 213 acres of agricultural land as well as 370 acres of parkland.

The Livermore City Council adopted the North Livermore Urban Growth Boundary Initiative in 2002 aimed at preserving agriculture and open space beyond the Livermore City Limits in Alameda County. The Initiative spelled out special uses and development regulations that would apply to properties that subsequently are annexed to the City. However, the Initiative also included a transferable development credit (TDC) provision that landowners could elect to use regardless of whether they annexed to the City or remained under the jurisdiction of Alameda County.

The TDR ordinance ultimately adopted had eight goals: 1) Retain and expand agriculture; 2) Preserve wildlife, hills, wetlands, natural beauty and peace of open landscape; 3) Prevent further sprawl; 4) Reduce traffic congestion and hazard; 5) Limit air pollution; 6) Avoid extension of facilities and services; 7) Provide for outdoor recreation; and 8) Safeguard Livermore’s identity, heritage, and character.

The North Livermore Urban Growth Boundary Initiative established a 14,000-acre TDC sending area and allowed sending area landowners the following TDC allocation options based on their desired level of voluntary participation. One TDC per five acres to landowners who record easements that permanently impose on their properties the use/development restrictions of the Initiative including minimum lot sizes of 40 or 100 acres. Eleven TDCs for each lot voluntarily foregone that would have been allowed by the Initiative. Ten credits for each undeveloped lot deed restricted to remain permanently undeveloped. Twelve credits for each existing dwelling unit removed from a parcel plus permanent restriction of development on that parcel by easement. 

The Initiative required the city to create a mechanism to use these TDCs at receiving sites within Livermore. The city essentially created TDC receiving sites wherever a parcel was allowed increased residential density by the 2003 General Plan Update or any future general plan amendments. As also called for in the 2003 General Plan, baseline density in these receiving areas was established as the maximum density allowed prior to the 2003 General Plan Update or any subsequent general plan amendments that resulted in new residential land use designations or an increase in residential density.

Livermore’s 2004 TDC Ordinance implemented the North Livermore Urban Growth Boundary Initiative and the 2003 General Plan Update by establishing three types of receiving areas, all of which establish baseline density as the maximum density previously allowed to the receiving site: 1) TDC combining district; 2) Planned development district; and 3) Zoning districts incorporating TDC. In all three options, 

property owners who decline to exceed baseline comply with the development requirements applicable to the baseline general plan designation. Owners who choose to exceed baseline must comply with the requirements of the zoning district corresponding to the TDC combining district of the TDC receiving area general plan designation plus all other requirements of the TDC ordinance including the need to acquire TDCs or pay an in lieu fee. In specific plan areas, the specific plan itself was to establish the TDC provisions, if any. Special rules applied for receiving areas with a industrial baseline and a TDC receiving zone designation allowing residential development. 

Affordable housing units were exempt from TDC requirements. Market rate units above baseline were required to submit TDCs or in lieu fees as follows.

(1) Two TDCs for each single-family detached dwelling in excess of baseline density (or one TDC for each single-family detached dwelling in excess of baseline density for developments with applications accepted as complete prior to January 26, 2004). (A later code revision changed these requirements as follows: 1.5 TDCs per bonus single-family detached residence at density ranges between one and seven units per acre or 1.25 TDCs for bonus single-family detached residences that secured final map approval by June 1, 2013 and started construction before April 1, 2014; 1.25 TDCs for each bonus single family detached residence in a density range of from eight to 14 units per acre.)

(2) One-half TDC for each multi-family attached unit above baseline density.   

(3) Payment of the TDC in lieu fee for each required TDC. Based on economic analysis, the in lieu fee was established as $24,000, meaning $48,000 per bonus single family unit and $12,000 per bonus multiple-family unit. (Revenues from TDC in lieu fees must be used for the acquisition of TDCs from North Livermore. Other than TDC acquisition, revenue from TDC in lieu fees can only be used for costs incurred in administering the TDC program.)

The Livermore TDC Ordinance additionally motivated developers to acquire TDCs in order to proceed with construction within the confines of Livermore’s Housing Implementation Program (HIP). Livermore aimed to maintain a desired rate of growth by using HIP to limit the number of dwelling units issued building permits in any given year. However, some HIP allocations could be reserved for developments that further the goals of the general plan including dwelling units in the South Livermore Specific Plan area and the Downtown Specific Plan area, as well as projects that retired TDCs from North Livermore. Specifically, an average of up to 200 TDC-retiring units per year received allocations under HIP from 2005 to 2014. Unused allocations could be carried over to subsequent years but TDC-retiring units were limited to a total of 2,000 allocations over this 10-year period. Most importantly, TDC-retiring units that received these allocations were not required to compete in the annual HIP process that otherwise would have been required to proceed with a residential project. Rather than find willing TDC sellers and negotiate sale prices, all developers who used TDC to exceed baseline as of 2010 elected to use the in-lieu fee option, resulting in payments totaling $1,576,000. This revenue was combined with other funding sources to purchase an environmentally sensitive property in the North Livermore sending area.