West Valley City, population 129,480 (2010), is a fast-growing suburb west of Salt Lake City, Utah. In 2000, the City adopted a TDR ordinance to preserve 370 acres of open space with the following four goals. 1) Promote development in areas most appropriate for growth. 2) Encourage the preservation of public open space, wetlands and upland habitats. 3) Establish a park and trail system. 4) Discourage development of environmentally sensitive lands with high water tables and/or wetlands.
West Valley City amended its TDR provisions in 2001, 2002 and 2007. In addition to the fours goals stated above, the code now articulates the objective of using TDR to prevent flooding by preserving land for storm water retention. When sending area landowners propose to dedicate land to the City, they now have the option of determining compensation using an appraisal of the land to be dedicated as opposed to the alternative of accepting the TDR allocation formula set forth in the code. Most significantly, receiving area developers also have the option of meeting TDR obligations using a cash payment in lieu of actual TDRs. This cash payment must be 50 percent of the receiving site land value increment as determined by site-specific appraisal. The City must use these cash-in-lieu payments to acquire sending sites or storm management and open space improvements within the sending site.
In the West Valley City TDR program, sending sites are given an overlay zoning designation of TDR-S, a designation depicted on the city’s zoning map. From two to four development credits (hypothetical dwelling units) may be transferred from land zoned TDR-S. The allocation depends on whether the sending site is north or south of the Riter Canal and whether the property remains in private ownership with a conservation easement or is dedicated with water rights to the City. The City issues Development Credit Certificates to TDR-S property owners based on these calculations.
When conservation easements are recorded on sending sites, the property owners can sell their development credits. When TDR-S property owners sell their credits, the City issues and records new certificates in the name of the new certificate holder.
The City now also provides the alternative of dedicating TDR-S property to the City. If the landowner chooses this alternative, the compensation for the land acquisition is determined by site specific appraisal. In at least one funding option, this City can fund these acquisitions using money from the cash-in-lieu option available to receiving site developers (detailed below).
Receiving sites include all non-TDR-S properties designated for residential or mixed-use development in the western portion of the City. These sites are given an overlay zoning of TDR-R. Areas zoned for densities of 3.5 units per acre or less can only achieve a higher density by buying TDRs. Areas already zoned for densities greater than 3.5 units per acre can develop at that higher density without acquiring TDRs. Specifically, the following unit-per-acre baselines apply in each of the following zones:
- R-1-8, RB: baseline = 4.5 units per acre
- R-1-7: baseline = 5 units per acre
- R-1-6: baseline = 6 units per acre
- R-1-4, R-2: baseline = 8.5 units per acre
- R-4, RM: baseline = 10 units per acre
- Any other zone: baseline = 3.5 units per acre
If the owners of properties in these higher density zones wish to exceed the original density limits, they too must acquire TDRs to exceed their existing baseline density at the ratio of one TDR for each dwelling unit above baseline. No development can exceed 15 units per acre unless an increase is recommended by the Planning Commission and approved by the City Council. Receiving site projects that use TDRs must meet several criteria regarding architecture, design, open space and amenities. As mentioned above, receiving area developers now have the option of meeting TDR obligations using a cash payment in lieu of actual TDRs. This cash payment must be 50 percent of the receiving site land value increment as determined by site-specific appraisal. The City must use these cash-in-lieu payments to acquire sending sites or storm management and open space improvements within the sending site.
On November 7, 2011, Planning Director Steve Pastorik transmitted an excellent summary of the program. In the first transaction, which occurred between 2000 and 2004, a developer bought a six acre parcel within the sending area and dedicated it to the City; this generated the 17 TDRs that the developer needed on a receiving area project as well as one additional TDR which the City sold and then transmitted the sale proceeds to the developer. The next transaction began in 2001 when a receiving site developer purchased 14 credits, at $6,000 each, from the City which were severed from two ten-acre properties that the City had previously bought in the sending area. In total, the City has acquired over 46 acres of sending area land representing a total of 98 TDRs of which 32 TDRs have been used on the two receiving site projects mentioned above. The 46 acres now under City ownership represents roughly 29 percent of the 161 acres of sending area land that the City hopes to preserve with this program. Four additional receiving area developments have been approved under development agreements in which the developers agreed to pay cash in lieu of TDR either at final subdivision map recordation or building permit issuance. However all four of these developments have been delayed by the recession.