New Orleans, Louisiana, population 343,829 (2010), is justifiably proud of its many historic buildings and districts. To safeguard these landmarks, New Orleans adopted a historic preservation ordinance which allows historic designation of a property with or without the consent of the property owners. To provide some compensation to these owners, New Orleans also adopted a TDR ordinance which allows unused development rights to be transferred from downtown properties with historic landmarks to receiving sites in specific zoning districts in the downtown.
As of November 2011, the TDR provisions located in the New Orleans Comprehensive Zoning Code Section 16.8 remained unchanged from the ordinance that was originally adopted in 1995. Consequently, the following process section below is identical to the one that appeared in the profile of the New Orleans TDR program in the 2003 book Beyond Takings and Givings.
Sending sites are places, buildings or structures in any Central Business District (CBD) zone that are either designated as historic landmarks or recognized as having special historic, community or aesthetic value. However, development rights cannot be transferred from any property owned by the City, State or Federal Government.
The amount of development which can be transferred from a sending site is the difference between the maximum floor area allowed by the zoning code, without bonus density increases, and the actual floor area of the existing building to be preserved. Once the floor area is transferred, the sending site is irrevocably limited to the floor area remaining on the sending site regardless of whether or not the landmark is destroyed or the site is redeveloped.
The receiving sites are properties in the CBD-1, CBD-2 or CBD-2B districts. In addition, properties in the CBD-9 zone can receive development rights transferred from the CBD-8 zone. Receiving site projects which incorporate transferred development rights may exceed by ten percent the by-right density, in addition to bonus density increases, allowed on the receiving site by the baseline zoning.
To start the approval process, the owners of both the sending and receiving sites must submit an application to restrict development rights on the sending site and increase density on the receiving site. The application must include the following: a site plan for the sending site together with a plan for the continuing maintenance of that site; a report from the CBD Historic District Landmarks Commission commenting on the proposed transfer; conditional use permit application materials for the receiving site; and any other information required by the City Council or the City Planning Commission.
Following a public hearing, the Planning Commission votes on a recommendation which is forwarded to the City Council. The City Council also holds a public hearing and votes to approve, modify or deny the request. In making their decisions, the Planning Commission and City Council must determine whether three approval criteria have been met.
- The additional floor area transferred to the receiving site cannot create adverse effects on the character of the surrounding area or on the occupants of surrounding buildings.
- Measures must be in place to assure that the buildings on the sending site will be maintained and renovated.
- The receiving site project must meet all the requirements needed to obtain a conditional use permit.
To ensure that these criteria are met, conditions may be placed on the approval and a surety bond can be filed or deposited in escrow with the City to assure compliance.
To finalize the transfer, the applicants must file both an instrument of transfer and a notice of restrictions on the sending site with the deeds of both the sending and receiving sites.
The New Orleans TDR program has not been used to date. At one time, there was little demand for extra density since the zoning code allowed almost limitless density in the downtown as a matter of right. A 1970’s rezoning tightened the density restrictions. However, many developers have been satisfied with the density allowed as a matter of right. In addition, it is possible to exceed the zoning code restrictions through the variance process. Consequently, there has been little reason for receiving site owners to buy additional density through TDR.
On the sending site side of the equation, historic property owners in New Orleans have traditionally used non-TDR compensation mechanisms. For example, some owners have placed preservation easements on their properties in order to claim charitable contribution tax deductions and tax credits. In New Orleans, at least 25 facade easements on historic properties have been donated to one non-profit historic preservation organization alone. However, this mechanism is not used as much as it was prior to the 1986 Tax Reform Act, which limited the tax credits which can be claimed when restoring or preserving historic properties.
In 2001, one member of the City Planning Department staff reported that one project had been approved under the TDR ordinance but that there were no details about the transfer.