A Solution for Urban Sprawl

Indeed, this population growth poses an imminent challenge to the effective use of land as a fixed resource. Historically, the country has had boundless quantities of land relative to our population density, but time is catching up with us.

Historical development economics dictate that land will be less expensive on the fringe of the core economic centers. So naturally, development spirals outward from the core to provide more cost-effective housing, and the suburb is born. This development in turn requires infrastructure such as roads and schools, which gives rise to commercial demands for retail and office, all of which creates demand for more housing. This cycle accelerates through a community's growth cycle until the infrastructure demands lean toward the economic tipping point. Community planners often respond by attempting to limit density, exacerbating the ineffective use of land. And there you have it: urban sprawl.

The negative connotation of sprawl in professional planning circles is counter to most people's desire to live in a suburban environment. We don't want the ills of a suburban environment, like high taxes, high per-capita infrastructure costs or increasing traffic congestion. But no one has built an American city yet that's cheaper to live in than the suburbs.

So how can we have our suburbs and keep our open space too? Historically, governments have slowed growth in certain areas by limiting roads and public sewer and water projects. But eventually, market demand and economics require that new roads and utilities be provided as more vacant land gets consumed. But there's another way that has seen much success since it was first conceived: transferable development-rights programs.

TDRs transfer the development rights of a property in one planning area to another planning area where the infrastructure already exists. When these transfer mechanisms are market driven, we get slightly higher-density development in the area of our communities with infrastructure, while permanently preserving land in areas where limited infrastructure exists.

This also negates future requirements to provide infrastructure to those areas preserved. The land from which the development rights will be transferred is termed a sending (sellers) area, while the region to which the development rights are transferred is known as the receiving (buyers) area. Sending-area owners get paid for the transferable development rights, so the receiving-area properties can increase their density and use requirements, preserving the equity interests of property owners in the sending zone and improving the equity investment in the receiving area. There are currently about 140 TDR programs throughout the country, mostly comprising areas of 5,000 to 50,000 acres, with some as large 100,000 acres.

There are three primary reasons to implement a TDR program:

• Preserving Farm Land. Preserving properties in sending zones where there are large agricultural communities is the most typical deployment of transfer development-rights programs. It's an effective tool for striking a balance between economic growth and preserving the region's agricultural resources. However, for the program to be successful, the TDR rights must be worth more to the seller than the unused development potential of the land. In the case of agricultural properties, a TDR program works because it allows a farmer to sell the development rights but continue to use the property for agricultural purposes.
• Maintaining Historic Properties Often, historical properties don't represent the maximum economic opportunity of the land. However, while it may make economic sense to demolish these properties, they represent a part of a community's historic fabric. A TDR program, in this case, would preserve the property for future generations while compensating the owner for transferring the development rights to a different site in the region and realize the development value.
• Stemming the tide of suburban sprawl. As the population grows, so does the demand for new development, often turning a once rural area into a sprawling organism locked in a never-ending cycle of infill and redevelopment that eventually results in a full build-out of all vacant land. A properly-developed TDR program can act as a mechanism to stem the tide of suburban sprawl by permitting more favorable development densities in certain areas where TDRs are purchased and transferred. This transfer results in perpetual preservation of equivalent land, so future density growth is unlikely.

In 2004, New Jersey also passed the Highlands Protection Act to protect the water supply of an eight-county region that encompasses approximately 450,000 acres. Although the regional master plan is still in development, the state legislature has charged the Highlands Council with identifying the sending and receiving areas and developing a TDR program to compensate the equity interests of all private property owners for the environmental restrictions that were placed on these properties.

Like its Pinelands predecessor, the Highlands are one of the most significant and unprecedented applications of TDRs as a planning tool. Unlike its predecessor, the regional development pressures and planning challenges in the Highlands are at a crossroads.

While the state of New Jersey faces long-term budget constraints and the Governor calls for more efficient delivery of services statewide, the Highlands region has the capacity to transform the land planning model. By concentrating development in existing areas of the region where infrastructure already exists, a well-developed TDR program can curb our consumptive use of land resources and ever-increasing need to expand infrastructure.

Involvement and cooperation will be needed at all levels, from private property owners to government and planning officials. Perhaps most important of all, the public must understand that embracing TDR and slightly higher densities in certain regions will not create a city or destroy the quality of our suburbs. Almost all of our existing suburbs are peppered with downtown main streets struggling to remain viable. Increasing the densities and expanding uses in these downtown areas will bring more people and hence more economic vitality and opportunity. Adding a few hundred thousand square feet of office or retail space to a fully-developed commercial corridor will not change the character of the community. It could permanently preserve acreage from any future development in another area of the community.

Across the country, communities are realizing that TDRs provide an effective balance between preserving land resources and economic development. It's also a way for owners in sending areas to maintain the equity in their property where development is restricted.

Though the concept of TDRs has been around for more than 30 years, its use as an effective planning tool has never been more in demand as our country's population, and development patterns, continue to expand. Through a TDR, communities and property owners can have the best of both worlds without compromising their long-term interests.

Anthony Graziano is associate managing director of Integra Realty Resource's Toms River, NJ operations. The views expressed in this article are the author's own.