San Luis Obispo County, California

San Luis Obispo County, California (Profiled 3-6-21)

San Luis Obispo County, California, population 283,111 (2019), lies 230 miles south of San Francisco and 190 miles north of Los Angeles on the Pacific Coast. 

The county’s first TDC program is managed by a private non-profit conservancy, which by 2016 had purchased over 350 lots in the coastal community of Cambria using a small loan to launch an ongoing revolving fund for preservation (Johnson 2016). A second program has preserved 5,464 acres in the inland portions of the county using a TDC allocation process involving site-specific appraisals in order to adjust for the wide range of easement values encountered in a large and diverse sending area.   

Cambria Program

The unincorporated community of Cambria, population 6,032 (2010), straddles scenic Highway One on the Pacific coast in northwest San Luis Obispo County. Cambria is also home to a forest of rare Monterey pines. In the 1920s and 1930s, thousands of small lots were platted in the Lodge Hill subdivision, often on steep, highly erodible slopes. Many of these lots are still undeveloped and the county is gradually reducing their number using various means including TDC. 

Before the certification of San Luis Obispo County’s Local Coastal Program, the California Coastal Commission regulated development in the coastal zone. During this period, the Coastal Commission required developers to retire one small, steep lot in the Lodge Hill subdivision in return for approving a permit to build a home on another lot. This process became increasingly formalized from 1980 to 1988 with the development of the County’s Local Coastal Program (LCP). The LCP ultimately targeted a canyon filled with Monterey pine, known as Special Project Area (SPA) #1 Fern Canyon and SPA #2, Visible Hillside (as view from Highway One), as two areas in which development should be minimized.

In 1988, the California Coastal Commission certified the Local Coastal Program for San Luis Obispo County and gave the county permit authority for the Cambria coastal zone. Some components of the Cambria TDC program appear in the county code at Section 23.04.440, including the basic mechanism of retiring environmentally-sensitive lots in SPAs #1 and #2 and transferring the foregone allowable square footage to receiving sites in the Residential Single Family land use category within five small lot subdivisions in order to exceed baseline limits for building footprint and gross structural area. In one of this code’s more unusual features, the program requires the participation of a non-profit corporation tasked with public information, program development, recordation of easements/deed restrictions, and the sale of available square footage from sending sites to the builders of receiving sites.  

According to the county’s North Coast Area Plan, TDC sending sites must meet at least one of the following seven criteria: 1) Located in Lodge Hill SPA #1 or #2; 2) Located in Monterey pine habitat and adjacent to an existing retired lot and containing at least one mature Monterey pine or four healthy saplings; 3); Containing steep slopes with known engineering problems or capable of causing adverse visual impacts from grading; 4) Areas where bluff erosion would necessitate shoreline protection; 5) Containing cultural resources; 6) Containing habitats for rare, endangered, or threatened species; and 7) Where development would cause adverse impacts when viewed from Highway One.

Eligible receiving sites are within the Cambria Urban Reserve Line, in any of five subdivisions, and served by sewer and water through the Cambria Community Services District. A receiving site cannot contain wetlands, habitat of rare or endangered species, identified cultural resources, slopes in excess of 30 percent, or where excessive grading or tree removal is proposed. Generally, lots in SPA #1 and #2 are intended as sending areas. However, lots in SPA#2 can receive TDCs transferred from sending sites that are also in SPA#2. Whether or not they receive TDCs, all development in the Highway One viewshed must be constructed with natural-looking materials in earthen or forest-toned colors.

Owners of qualified receiving sites may be required to purchase TDCs to offset development impacts. But primarily, the owners of receiving sites can choose to buy TDCs to gain increases in the allowable footprint and gross structural area of the property. The footprint is the lot area covered by residential and accessory structures including living areas, garages, and carports but excluding eaves, balconies and open decks. Gross structural area is the floor area within each structure including living space, garages, and carports but excluding exterior open decks and interior mezzanines. 

Baseline for footprint and gross structural area varies depending on lot size and which of the following potential lot characteristics apply: 1) Special Project Area; 2) Forested Lot (containing at least one mature Monterey pine but not in an SPA or Marine Terrace; 3) Marine Terrace (an area between specified streets and the coastal bluff); 4) Steep Lot (30 percent or more); and 5) Typical Lot (not steep or in marine terrace and containing no Monterey pines).

In the lot size category of 1,750 to 3,499 square feet, a 1,750 square foot Forested Lot would have a baseline footprint of 600 square feet and structural area of 900 square feet and could use TDC to gain up to 100 square feet of additional footprint or structural area. In the lot size category of 3,500 to 5,249 square feet, a 3,500 square foot Forested Lot would have a baseline footprint of 1,200 square feet and structural area of 1,800 square feet and could use TDC to gain up to 300 square feet of additional footprint or structural area. In the category of lot sizes 5,250 square feet and larger, a 5,250 square foot Typical Lot would be allowed a footprint of 2,200 square feet for a one-story structure or 1,700 square feet for a two-story structure and a gross structural area of 2,200 square feet for a one-story structure or 2,600 square feet for a two-story structure; by using TDC, a receiving site with these characteristics could gain up to 400 square feet of additional footprint or structural area.

To comply with TDC requirements, receiving site owners buy transferable square footage from the Land Conservancy of San Luis Obispo County (Land Conservancy), the TDC program administrator. The purchase price must be at least sufficient to buy sending site easements and sewer assessments plus cover administration costs. The Land Conservancy bought the first sending area easements with a $275,000 loan from the California Coastal Conservancy. The Land Conservancy uses the proceeds from the sale of the square footage from these deed-restricted lots to purchase more sending site lots, thereby creating an ongoing source of funds from a relatively modest amount of seed money. The Land Conservancy aims for a sale price that receiving site purchasers find acceptable yet ensures that the Land Conservancy can continue to buy future easements without having to seek additional public funding. In the 1990s, the Land Conservancy was buying TDCs at an average cost of $10 per square foot and selling them for $20 per square foot. 

As of 2016, the Land Conservancy had purchased and permanently preserved over 350 lots and formed the Fern Canyon Preserve which can be traversed on the Henry Kluck Memorial Trail (Johnson 2016). San Luis Obispo County doubled down on TDC in 2018 by approving an expansion of the program.          

Countywide TDC Program

Studies conducted in the 1990s found 23,000 undeveloped lots within unincorporated San Luis Obispo County, with 12,000 of these lots in rural areas. Many of these were substandard lots within antiquated subdivisions. At that time, the county’s general plan permitted an additional 8,000 rural lots. Severe adverse impacts were predicted if this development potential was actually used. As one of many responses, the county adopted its countywide TDC program in 1996 to reduce the inadvisable lots in antiquated subdivisions as well as protect environmentally sensitive areas and agricultural land by transferring development potential to places more suitable for growth.  

Sending sites are proposed by the property owners and reviewed for eligibility by the Planning Commission based on whether they satisfy at least one specific criteria or general criteria in three areas.

Agricultural Criteria

  • Specific:
    • Land capability: sending site at least 40 acres in size and 50 percent Class I or II soils 
    • Grazing land: minimum 320 acres with at least 100 acres well or moderately suitable for rangeland 
  • General: Land with 
    • Demonstrated productivity;
    • Microclimates suitable for specific crops;
    • Dependent on localized groundwater; or 
    • Soil conservation benefits.

Natural Resource Criteria

  • Specific:
    • Designated by county plans as Natural Area or Significant Habitat
    • Open space adjacent to restricted open space
    • Protects views from highways and main collector streets
  • General: Land that
    • Protects watersheds or conserves soil
    • Protects proposed greenbelts, community separators, scenic entries, or natural resources identified by the county and/or local communities
    • Provides access to natural features for hiking, nature education, or other passive recreation

Antiquated Subdivision Criteria

  • Specific:
    • Sites at least ten miles from urban or village reserve lines with lots smaller than 20 acres 
    • Sites at least five miles from urban or village reserve lines with lots smaller than ten acres
    • Sites located within designated antiquated subdivisions
  • General:
    • Sites within antiquated subdivisions with substandard improvements
    • Sites that are distant from transportation and other services and therefore conflict with air quality goals and increase the cost of public services

TDC Allocation

Sending area applicants can choose between two methods of determining the number of TDCs available to transfer. 

Existing Lots Method – One TDC for each legal lot proposed for retirement; no more than one TDC can be granted for retirement of a substandard lot that meets a specific natural resource criterion

Development Value Method – The appraised development value of the sending site is divided by twenty.

  • Development value is the full value of the sending site if a public agency or non-profit organization agrees to accept title to the property
  • If the owner proposes to retain title, development value is full value minus the value after restrictions imposed by proposed easements

Following the recordation of necessary easements, the TDC Administrator issues a Certificate of Sending Credits documenting the number of TDCs and a unique registration number for each credit. Upon each certificate transaction, the TDC Administrator makes the needed certificate revisions. Holders of TDCs sell them at prices negotiated between buyers and sellers; the formula in which appraised sending site development value is divided by $20,000 only determines the number of TDC allocated to a sending site. 

Receiving Sites

Receiving sites are proposed by applicants and are only eligible if they meet all of the following eight criteria.

  • Environmental review indicates no significant, unavoidable adverse impacts
  • Not in an Agricultural land use category
  • Within an urban or village reserve line or a Community-Based TDC area
  • Less than 30 percent slope
  • Outside Sensitive Resource Areas and hazard areas for flooding, geology, earthquakes, or wildfires
  • Outside natural or habitat areas defined by the Land Use Element
  • Project complies with all development and land division standards
  • The site was not an approved sending site

One TDC is required for each additional dwelling unit allowed by a general plan amendment or land division through a parcel map or tract map. However, the code allows the Review Authority to waive TDC requirements for general plan amendments consistent with strategic growth policies, projects with affordable housing, or sites with other special circumstances.

Base density is the amount of development potential allowed to the receiving site for minimum parcel sizes established by County Code. For receiving sites that are outside city limits but within an incorporated city’s urban or village reserve line, the receiving site must be supported by the city and the maximum density allowed via TDC must be consistent with that city’s policies, programs and standards but cannot exceed 50 percent of base density. However, if the receiving site projects proposes amenities that go beyond basic requirements, an addition 25 percent of base density bonus may be granted. 

San Luis Obispo aims to have receiving sites as close as possible to sending sites. If they are available, TDCs must come from sending sites no more than five miles from their receiving sites. When insufficient credits are available within five miles, the sending and receiving sites can be from any planning area in the same geographical region. However, in the case of the South County (Inland) and Huasna planning areas, the sending and receiving sites must be in the same planning area. 

As of 2007, Chapter 22.24.300 created a community-based program for South Atascadero that mainly uses the county-wide procedure but involves special requirements for receiving areas regarding minimum site size, percolation tests, groundwater monitoring, community water, setbacks, drainage, and tree removal, as well as surveys for botanical and archeological resources.


As of 2012, the countywide program had protected a total of 5,464 acres (Nelson, Pruetz & Woodruff 2012). The two largest sending sites are the Bonheim Ranch, which alone conserved 5,364 acres and the Black Lake Canyon Preserve owned by the Land Conservancy of San Luis Obispo County. In 2018, the Land Conservancy reported that the market could support a value of $25,000 per credit (San Luis Obispo County 2018).       


Johnson, Jay. 2016. Request by the Department of Planning and Building for authorization to process updates to the Coastal Zone Land Use Ordinance and the North Coast Area Plan to expand the Cambria Transfer of Development Credits Program. Memo dated 11/15.2016 from Jay Johnson, Planning and Building to Board of Supervisors.

Nelson, C., R. Pruetz, and D. Woodruff. 2012. The TDR Handbook: Designing and Implementing Transfer of Development Rights Programs. Washington, D.C.: Island Press. 

San Luis Obispo County. 2018. Information Memorandum – Inland Transfer of Development Credit Program. Memo from Department of Building and Planning to Board of Supervisors dated February 20, 2018.