Washington State Department of CommerceTransfer of Development Rights: A Regional Approach

June 2012

OverviewTDR in Puget SoundRegional TDR Program/Alliance Watershed Grants in Puget Sound to implement the Puget Sound Partnerships Action Agenda

*TDR in Puget SoundExisting conservation TDR:King County (1998/2001)Redmond (1997)Issaquah (2005)Seattle (1998/2001)Bellevue (2008)Sammamish (2011)Kitsap County (2006)Bainbridge Island (1996)Pierce County (2007)Snohomish (2004/2008)Arlington (2004)Everett (1991/2006)

Issaquah

Focus on Regional TransfersSending areas land designated by the counties as sending areas that are:Agricultural or forest land of long-term significance;Rural land being farmed or managed for forestry;Land whose conservation meets other state and regionally adopted priorities; andLand that is in current use as a manufactured/mobile home park.Receiving areas - incorporated cities and towns

Regional TDR Alliance Alliance Partners: Snohomish County, Pierce County, King County, Forterra, Puget Sound Regional Council, and Commerce to:Implement and enhance county TDR programsBuild capacity in cities to receive development rights from farms, forest land and open spaceProvide information resources to cities and countiesInterlocal Terms and Conditions Rule

TDR Project Grants for Cities$1 million in grants to 10 cities (*plus $ from King County):ArlingtonEverettIssaquahMountlake TerraceNormandy Park*Port Orchard Puyallup*

SeattleSnohomishTacoma*

Watershed Protection and Restoration: Land Use and Working LandsFocus on working farm and forest lands, and vibrant cities:Skagit County and Burlington King County and Kirkland Snohomish County

Lessons Learned: Inter-jurisdictional issuesBenefits to cities for receiving densityInclusion of sufficient receiving areas and not too much sending areaRelationship to existing density bonus menus

Lessons Learned: TDR Success FactorsEssential For SuccessDemand for bonus developmentCustomized receiving areasExtremely ImportantStrict sending-area regulationsFew alternatives to TDR in receiving areasMarket incentivesSource: What Makes TDRs Work?, Pruetz and Standridge, JAPA, Winter 2009

Information on TDR and other related topics are on our web site at: www.commerce.wa.gov/tdr

Or contactheather.ballash@commerce.wa.gov(360) 725-3044

***The Growth Management Act currently encourages the use of TDRs as an innovative land use. A number of jurisdictions have already adopted TDR programs.

King County adopted a pilot program in 1998, making it permanent in 2001. It is the most well established program, with over 91,000 acres of land preserved. King County currently has an inter-local agreement with the City of Issaquah to receive development rights from the county. Issaquah, Redmond and Seattle all also have TDR programs internal to the city. It conserves rural, agricultural and forest land.

Kitsap County adopted a program to conserve rural and forest land. The program was found out of compliance by the Growth Management Hearings Board. The Board found that a 40-year limitation on the retired right was ambiguous as to what happens next. The Board found the program out of compliance because the provision created uncertainty as to whether the program could achieve its purpose. The county amended its program to provide that the deed restriction be in perpetuity, and was found in compliance by the Hearings Board in March 2008.

Pierce County adopted its PDR and TDR program to conserve rural, agricultural and forest land in November 2007, with an effective date of April 2008 looking at how they will fund it.

Snohomish County has an existing TDR program under an interlocal agreement with the City of Arlington to protect farmland surrounding Arlington. The County considered adopting a county-wide program. It ended up deciding to work through interlocal agreements, development agreements and code changes. The County is working with the City of Arlington and the development community on getting the Arlington program going.You may say, why do we need to know about this statute when it doesnt include Skagit County. It is the policy basis for the state for TDR right now. The requirements of the statute were incorporated into the eligibility requirements for TDR projects under this grant.

Receiving areas limited to incorporated cities and towns because that is where growth will occur and where there will be the most capacity/market for TDR. All four counties have receiving areas under their current programs where transfer can now occur, but will not be the focus of state efforts.

County can include county receiving areas, but at the countys expense. Based on statutory policy, the state is only funding planning for county to city transfers.

*Interlocal Terms and Conditions Rule Rule was adopted in September 2010. Only central Puget Sound counties and cities can take advantage of it, but it provides some guidance for ILAs for counties and cities.

*This grant was awarded under EPAs Puget Sound Watershed Management Assistance grant program to implement the Puget Sound Partnerships Action Agenda.

King County also received funding for itself and Pierce County to acquire development rights for transfer and to work with three of the cities Normandy Park, Puyallup, and Tacoma.*This grant was awarded under EPAs Puget Sound Watershed Management Assistance grant program to implement the Puget Sound Partnerships Action Agenda.*Benefits to cities must seeShared interest conserving the sending areaFinancial benefitRegulatory benefitMust have ample receiving areas to ensure a marketNot too large sending areas to avoid flooding marketMust not compete with existing density bonus menus in the receiving areas other incentives offered to developers for increasing the density use of TDRs must be evaluated in the context of existing programs.

Many of the findings of this study are consistent with and support the committees recommendations and proposed legislation.

Demand for bonus development extra density that developers get when they buy TDRs must be something they actually want market analysis critical.

Receiving areas customized to the community important attributes:Adequate infrastructurePolitical acceptabilityCompatibility with existing developmentClear designationConsistency with the comprehensive planLocation where developers perceive a market for higher density or intensity

Strict sending-area regulations sending area zoning that prohibits density higher than 1du/5 acres. Why preserve the land if it is surrounded by subdivisions?

Few alternatives to TDR competition with other bonus density programs, or ability to circumvent TDR requirements.

Market incentives Transfer ratios and conversion factors that result TDR programs that pencil out for the developer. E.g. if one development right provides the developer with one additional dwelling unit per acre, the cost of the development right may not pencil out for the proposed development. But if the TDR translates into several extra dwelling units per acre or more building height or floor area, the developer may be interested. A permitting process that eliminates or minimizes discretionary approvals.

Concluding remarksThank you again for inviting me I am glad to be here.A lot has happened with TDR in this region in the last couple of years.The focus of the TDR Alliance has been on supporting development of the county programs, and recruiting cities to create the market for development rights from priority areas in the counties for conservation and watershed protection.To that end, we have provided a variety of resources for counties and cities on the web site.

We are all available for questions.*