Chavooshian, B. Budd

English

Research Papers in Economics

NEW JERSEY'S  EXPERIENCE WITH
TRANSFER  OF DEVELOPMENT
RIGHTS
B.  Budd Chavooshian, Extension Specialist
Rutgers University
Cook College  and the Cooperative  Extension  Service  of Rut-
gers  University  have  in  recent  years  initiated  research  and  pro-
grams in land use and resource management  especially with a view
to preserving  prime  agricultural  lands.  At the same time  the state
created  a  Blueprint  Commission  on the  Future  of Agriculture  in
New  Jersey  which  explored  ways  to  preserve  agriculture  in  the
state.
The objective of these groups was to develop more rational land
use  control  techniques  and  to  preserve  agricultural  land,  not
merely  for  the  production  of food  and  its  contribution  to  the
economy, but to ensure the health and safety of citizens in the most
densely  populated  state  in the nation.  Research  is  indicating that
strategically  located areas  of agricultural  lands  and  woodlands  in
an urban  setting provide not only open  space, with  all its aesthetic
values,  but also  a  psychological  uplift  and  an ecological  balance.
Furthermore,  keeping  open  large  land  areas  permits  normal  de-
velopment in a less sprawling pattern and reduces, to some extent,
costs  of services  such  as utilities,  schools,  roads,  and other trans-
portation  facilities.  Moreover,  and  perhaps  most  important,  our
legacy to future generations would not be  a completely  developed
state where the only choices would be living with past mistakes or
creating  open  space  at  an  extremely  high  economic,  social,  and
political cost. Rather, we would leave future generations the option
of what  to do with  the preserved  agricultural  lands as dictated  by
their needs.
It  was  in  this  context  of urgency  and  need  that we  initiated
almost three years ago efforts in applied research on the concept of
transfer  of development  rights,  which  resulted  in  a  legislative
proposal currently  being considered  by the  state.
THE NEW  LAND  USE MANAGEMENT  CONCEPT:  HOW  IT WORKS
A development right is basically a creature of property law.  It is
one of the numerous rights included in the ownership of real estate.
A mineral  right,  an air  right,  or the right to travel across  another
person's property are examples of the various rights of land owner-
73ship.  A  development  right  is  the  right  that  permits  the owner  to
build  upon  or  develop  his  land;  in  an  urbanizing  region  it  is  the
land's  greatest  economic  value  and  therefore  the  owner's  most
valuable  right.
All rights of ownership of land are subject to reasonable  regula-
tion under the police power and are also subject to the governmen-
tal power of eminent  domain.  Rights of ownership  in land may be
separated from other rights and regulated  by government or sold by
the owner and  transferred  separately.
For example,  an owner of land may sell his mineral rights or air
rights  and  still  retain  ownership  and  use  of the  land  surface.  A
common example  involves an owner's  sale of an access  easement
to  a  public  utility  so  that utility  lines  can  be  installed  and  main-
tained on the owner's property.  Similarly,  an owner may sell all of
his rights  to develop  his land, and these rights  may be bought and
sold by  persons other  than the owner who  still retains the owner-
ship of the land.
The transfer of development rights,  as we have developed  it,  is
essentially  a system that identifies  a right to develop and creates  a
market  for such  development  rights.
TRANSFER  OF  DEVELOPMENT  RIGHTS  DEFINED
Very  simply,  transfer of development rights  zoning  is initiated
when  a  municipality  designates  certain  critical  areas  wherein  de-
velopment  will be prohibited.  Land owners  would continue to own
their lands, but the residential development potential of these areas,
based  upon  existing  zoning  provisions,  would  be  transferred  to
other districts  in the municipality  that can accommodate  the addi-
tional  density  without  doing  any  environmental  damage.  Sound
principles of rational land use planning must be used in determining
the  latter  districts  in  order  to  avoid  incompatible  land  uses  and
undue  strain  upon  the  natural  environment  and  existing  public
facilities.  Land developers  in the latter areas may build at the pre-
vious densities  without purchasing development rights; however, if
they wish to build at the new allowable higher densities,  they must
purchase  the necessary development rights from owners  of land in
the  preserved  critical areas.
The  net effect  of transfers  of development  rights  is the preser-
vation  of environmentally  important  areas  with equitable  compen-
sation  for the  land owners  in  such  areas.  There  is no  cost to  the
taxpayers  of the  municipality;  the  only  cost  is  the  purchase  of
development  rights by builders who will then be permitted  to build
more dwelling units on their current land holdings.  In contrast, if a
builder wished  to  build  more  dwelling  units without  a transfer  of
74development  rights,  he  would  have  to,  of course,  purchase  the
necessary  additional  land.
SOME  PLANNING  IMPLICATIONS
The primary  objective  of the transfer of development rights as
proposed  here  is  the  preservation  of open  space.  However,  the
impact of this technique on the planning process cannot be ignored.
More  predictability,  essential  to  effective  planning,  is  promoted
since  all  open  space  designations  are  identified  and  permanently
locked  in  the  master  plan  and  in  zoning  regulations.  Also,  the
desired number of people who will live in the community  is clearly
set forth through the emphasis  on the density requirements  neces-
sary to guarantee  value for development  rights.  And, in many  in-
stances,  water supply  can be more  accurately  predicted  since the
aquifers and recharge areas will be protected in the open areas and
total  population  can  be,  to  a  major  extent,  related  to  the  water
supply.  Once  approximate  total  density  is  established,  better
judgments relating to the construction of capital improvements can
be made because districts where development  is permissible can be
very  effectively  planned  on a comprehensive  scale  and  related  to
the tracts of permanently  preserved open space.  In this process the
locations  of more  intense  development  are  identified  and  public
services  and facilities  can be  geared to them.
Another important aspect of development rights is the probable
interest and participation of many citizens of the community  in the
planning  process.  Many  will  have  development  rights  to  protect
and  will be very  interested in  the process which  gives  "value"  to
their development  rights.
CONTINUING  RESEARCH
With the funds from Title  V  of the Rural Development  Act of
1972,  a  demonstration  project  is  currently  being  conducted  in
South  Brunswick  Township,  Middlesex  County.  The  purpose  of
the project is to demonstrate,  under simulated conditions but work-
ing  with  township officials  and  citizen  groups,  how  a transfer  of
development  rights  zoning  ordinance  would  be  drafted  and  the
problems  that would  be  encountered.  The  project  is  in the  early
stages of delineation  of the areas to be preserved, which  will prob-
ably include prime agricultural  lands, woodlands,  aquifer recharge
areas,  and  floodplains.  Criteria,  standards,  and  methodology  for
delineation  are being developed.  The project is scheduled for com-
pletion  by July  1,  1975.  If it  is successful,  we will then devote the
next  two  years,  again  under  simulated  conditions,  in  testing  the
manner in which the marketplace  responds to this new marketable
"commodity."
75

NEW JERSEY'S EXPERIENCE WITH TRANSFER OF DEVELOPMENT RIGHTS

Abstract

Similar works

Full text

Available Versions

Research Papers in Economics