(Profiled 4-10-21)

Los Angeles County, California, population 10,039,107 (2019), has had a TDR mechanism operating for decades within its Malibu Coastal Zone, which extends from the City of Los Angeles to the Ventura County border and roughly five miles inland from the shores of the Pacific Ocean. Our County, the Los Angeles Countywide Sustainability Plan adopted in 2019, recommends continued use of TDR as a way of steering development away from ecologically sensitive lands and areas most at risk from climate impacts in the future. 

Originally, the Los Angeles County TDC program applied to the entire Malibu Coastal Zone. The incorporation of the City of Malibu in 1991 now places about one fifth of the Zone under the jurisdiction of that city and an explanation of that city’s TDR program can be found at the profile for Malibu.

The Malibu Coastal Zone is riddled with antiquated subdivisions with small lots approved long before the adoption of modern standards for safety and environmental protection. In 1978, 64 percent of the 13,475 lots of record in the Malibu Coastal Zone were vacant. These lots were and are attractive to those seeking a rural lifestyle within commuting distance of the second-largest city in the US. However, widespread development of these vacant lots would be disastrous on many levels. 

The Malibu Coastal Zone is home to a Mediterranean ecosystem supporting remarkable biodiversity. It contains over 900 plant species, over 50 percent of the bird species found in the country, and habitat for several charismatic species such as golden eagles, bobcats, and mountain lions. Partly to safeguard this habitat, much of the Zone gained federal protection by the creation of the Santa Monica Mountains National Recreation Area (SMMNRA) in 1978.

The Zone is famous for natural disasters as well as natural beauty. The area has repeatedly been damaged by drought-fueled wildfires, such as the 2018 Woolsey Fire which killed three people, cost $6 billion, destroyed 1,643 buildings, and scorched 88 percent of the SMMNRA. The steep terrain has limited ability to absorb intense rainfall, particularly after being blackened during the wildfire season, leading to floods, debris flows, and landslides. Between 1992 and 1995, Malibu was declared a federal disaster area five times due to wildfires, floods and landslides.  

The topography here resists the creation or expansion of urban infrastructure. This has made the Zone a difficult place for the effective deployment of fire/rescue vehicles. Existing narrow, twisting roadways can easily be blocked just as residents are trying to flee and emergency vehicles are attempting to access areas threatened by fires, floods, and mudflows. 

The lots in the sending areas typically range between 4,000 and 7,000 square feet each and rely on septic systems. When septic systems fail, aquatic environments are damaged. In the 1970s, coliform standards were exceeded in two streams that enter the Pacific Ocean at some of the most popular beaches in Southern California.  

The California Coastal Zone Conservation Act, established by voter initiative in 1972, and the subsequent California Coastal Act of 1976 aim to protect coastal resources and promote public access to the ocean. The California Coastal Commission established land use regulations for the Malibu Coastal Zone. Under the Act, new subdivisions could only be permitted if more than half of the lots in existing subdivisions were developed. Well over half of the lots in the zone were vacant in 1978. But strict observance of the subdivision policy would prevent new subdivisions that are properly located and meet modern environmental standards while allowing the development of thousands of substandard, vacant lots that the Commission wants to eliminate in order to reduce environmental damage and limit the number of people vulnerable to wildfires and other disasters. 

As a solution, the Coastal Commission adopted a policy of requiring one TDC for each new lot or dwelling unit allowed in the Malibu coastal plain, the receiving area. In 1981, the allocation of TDCs in the sending areas expanded to include resource areas and well as substandard lots. But the overarching goals remain: to reduce development potential in antiquated subdivisions, environmentally-sensitive land, and hazard-prone areas without increasing the total development capacity of the Malibu Coastal Zone.

As of a comprehensive reworking of the county’s zoning code in 2019, Section 22.44.1230 reaffirms receiving area identification by requiring one TDC, (representing the retirement of one or more sending area lots), for each new lot or each new dwelling unit in a multi-family development, senior complex, or habitable accessory structure. 

Sending areas include two categories of rural villages. The primary areas are lots in eight antiquated subdivisions and there are three-plus ways of determining TDC allocations. 1) One TDC can be allocated to a legal lot with a total credit area of at least 1,500 square feet that is served by an existing road and water main and not located in an area of landslide or other geologic hazard. The total credit area is calculated using a formula involving average slope, contour intervals, total length of contour lines, and area of the building site. As an alternative, the required 1,500 square feet of credit area can be assembled by adding 500 square feet of credit area per lot from lots that are at least 4,000 square feet in area, not subject to geologic hazards, and within 300 feet of an existing road or water main. 2) One TDC can be granted for the retirement of any combination of legal lots totaling at least one acre regardless of road and water service. 3) Another two calculation variations are available in the Mote Nido subdivision.

The secondary sending sites in the rural village category are located in five antiquated subdivisions where TDCs are granted for the retirement of at least two contiguous lots containing H-1 and/or H2 habitat. Alternatively, TDC allocation can be determined by using the calculations available to the primary rural villages. 

In addition to rural villages, sending sites can be approved for parcels up to and including 20 acres if at least half of the land area is H2 habitat or the parcel is within 200 feet of H1 habitat or public parkland. Parcels meeting these criteria that are larger than 20 acres qualify for one TDC per 20 acres and/or fractional TDCs.

To be granted TDCs, sending site owners must record an open space deed restriction and either convey title to a public entity or merge the retired lots with an adjacent buildable lot using code provisions for lot mergers, lot line adjustments, or reversion to acreage.   

The expansion of the program to include resource lands as well as antiquated subdivisions occurred in 1981. In addition, the California Coastal Conservancy committed to the success of this program by forming a TDC bank using $2.6 million to buy 213 TDCs from sending sites in four antiquated subdivisions. 

The El Nido subdivision was created in the 1920s with narrow winding roads and 347 lots on 70 acres of land. By 1980, only 40 lots were developed. Los Angeles County had inherited 153 lots due to property tax default and it was offering them for sale to the public whether or not they were buildable. Approximately 25 of the lots were in or near the bed of a creek that drains into a canyon which is now a public park. Through the Conservancy, the 153 lots owned by Los Angeles County and 30 other lots were permanently retired.

The Conservancy’s second restoration project was the Malibu Lake small lot subdivision, which is now surrounded on three sides by Malibu Creek State Park. This tract was created in the 1920s and 1930s to provide cabin sites adjacent to a private hunting camp. Within the Coastal Zone, only 16 of the 158 lots were developed in 1981. Many of the lots were not suited to septic systems and further development of these lots could threaten the quality of the water in Malibu Creek. The Conservancy purchased 125 lots here for $773,000.

The third Conservancy project was the Cold Creek Watershed, a 5,000-acre area containing exceptional wildlife habitat supported by one of the few perennial streams in the Santa Monica Mountains. The Coastal Commission originally required that TDCs used on receiving sites within the Cold Creek watershed had to come from sending sites within the Cold Creek watershed. The only small-lot subdivision within the Cold Creek project area is the Monte Nido subdivision, a 1926 tract with 416 lots on 40 acres. Although the lots average only 4,000 square feet, each lot relies on individual septic systems, including the lots immediately adjacent to the two blue-line streams that cross the subdivision.

The fourth Coastal Conservancy project is the Las Flores Heights Restoration Program. In 1918, the Las Flores Heights subdivision was created with 102 lots on 160 acres. The lots in Las Flores Heights range from one-half acre to an acre in size, but they tend to be steep and many are not served by a paved road. This area is particularly susceptible to natural disaster. In the 1930s, 20 homes existed in this subdivision; however, by 1982, all but six of the homes had been eliminated by fires and floods. The fires of 1993 reduced that number even more. The Conservancy granted the Trust $886,000 to acquire a major interest in a landholding which included 60 percent of the Las Flores Heights subdivision plus a 160-acre site to the north of the tract.

The Monte Nido subdivision, was considered by some to have too few potential sending sites to create an adequate supply of reasonably-priced TDCs. The TDCs from Monte Nido were priced much higher than the TDCs in other parts of the Malibu Coastal Zone. In addition, there were concerns that the owners of the potential sending sites could cooperate to drive up TDC prices even more or perhaps block a proposed development. One developer stated that this requirement was essentially a denial of his project, claiming that it would be difficult or impossible to buy enough TDCs from within the watershed to mitigate a proposed subdivision. In response, the Coastal Commission allowed a tract outside of the Cold Creek watershed, the Fernwood small lot subdivision, to serve as a reserve source of TDCs for receiving sites within the Cold Creek watershed. Fernwood is the largest of the small lot subdivisions, with 1,497 lots, 1,154 of which were undeveloped in 1979.

To further facilitate transfers, developers were allowed to make payments in lieu of actual TDCs which the Conservancy used to buy TDCs. The Coastal Commission also capitalized the work of the Mountains Restoration Trust, a non-profit satellite organization of the Conservancy that could purchase TDCs at below market rates using creative techniques that are not always available to a governmental agency.

The Conservancy started the Mountains Restoration Trust with a $300,000 grant for the purchase of TDCs. Five percent of the in lieu fee was to be reimbursed to the Conservancy until the grant was fully repaid. However, the demand for Cold Creek TDCs declined. Instead of buying TDCs, the Trust found itself accepting TDCs as donations from homeowners wanting charitable-donation tax benefits in exchange for scenic easements. Typically, these donations were made by homeowners who owned five contiguous lots but only used two or three of these lots as a building site. By donating scenic easements on the two or three undeveloped lots, these property owners were able to continue to use these lots as private open space yet they received tax benefits as high as $150,000. Using this process, the Trust accepted easements from over 46 lots, representing 24 TDCs. Because these TDCs were acquired for little or no money, the Trust was able to sell TDCs for $15,000 to $18,000, a fraction of the price originally assumed.

In “Transfer of Development in the Malibu Coastal Zone”, Elizabeth Wiechec explains that the program was modified in 1984 to reduce the ability to grant TDCs for the retirement of lots which were actually unbuildable due to geologic hazards, septic system limitations and flood hazards. In another modification, the Coastal Commission refined its maps of Environmentally Sensitive Habitat Areas (ESHAs) to protect only the riparian area flanking streams. As a result, many properties which were previously considered unbuildable became viable home sites with commensurate increases in value. This greatly decreased the likelihood that they would become TDC sending sites (Wiechec).

The program languished until 1987 when the coastal zone plan was adopted and formally memorialized the TDR mechanism. For the next five years, the program was extremely active. The work of the Coastal Commission managed to keep the cost of the average TDC at about $20,000, or roughly two percent of the price of new lots in the receiving area. In addition, the subdivision of 10-acre parcels into 2.5-acre lots in the highly desirable receiving area was capable of three- and four-fold increases of per acre value. 

By the time the City of Malibu incorporated in 1991, the TDR program had protected an estimated 800 acres of sending area land in antiquated subdivisions and retired roughly 924 vacant lots. By 2003, the Mountains Restoration Trust had retired the development rights on 260 acres of land within the Cold Creek watershed, representing 22 TDCs. In addition, the Trust had collected in lieu fees equivalent to 39 additional TDCs, resulting in a grand total of 544 TDCs at that time (Wiechec).  

When Malibu’s incorporation became effective in 1991, the city imposed a building moratorium and demand for TDCs fell. The California Coastal Commission prepared and adopted a Local Coastal Plan (LCP) for Malibu in 2002 with a TDR program based on the program that existed when Malibu was part of unincorporated Los Angeles County. The City sued the state over this action but lost in court. In 2004, the City adopted its own LCP which included a TDR program that closely adheres to the Commission’s 2002 program. 

The City of Malibu’s TDR program is profiled separately. However, it deserves mention that the success of the Los Angeles County program is highly dependent on Malibu because the most suitable receiving sites are within Malibu. As of 2010, most of the larger vacant parcels in Malibu were zoned for 20- or 40-acre minimum lot sizes, leaving little opportunity for subdivision. Although some five-acre parcels are zoned for a one-unit-per-acre density, environmental constraints create significant hurdles to subdivision (Edmondson 2010). As mentioned above, the 2019 Los Angeles County Sustainability Plan proposes TDR as a way of steering development away from ecologically sensitive lands and areas most at risk from climate impacts in the future. The implementation of that 2019 plan is just beginning as of 2021. 

References

Edmondson, Stefanie. 2010. E-mail correspondence with the author of July 13, 2010.

Wiechec, Elizabeth. Transfer of Development in the Malibu Coastal Zone. Unpublished paper prepared for Mountains Restoration Trust by former Executive Director.