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MOST OF US RURAL FOLKS HAVE HEARD about the evils of urban sprawl. It spreads like cancer, destroying farmland, natural habitat, scenic vistas and historic places. We know it’s costing us big time in the form of traffic congestion, deteriorating roads and inner city problems. Even the National Association of Realtors – a traditional development advocate – is promoting a “smart growth” campaign in recognition of the problem.
Without realizing it, those of us lucky enough to escape the urban scene have created a similar crisis out here in the hinterlands. Rural sprawl – the country cousin of urban sprawl – is less visible but just as destructive. With our forests and fisheries depleted and little more than our scenery left to sell, rural sprawl is destroying important economic, environmental and cultural resources essential to the new tourist, retirement and telecommuter economy.
The foundation of rural sprawl is the proliferation of large, remote parcels rather than compact, efficient and socially vibrant communities. Planners and sociologists observe that this is most likely an attempt to replace the loss of traditional public spaces (parks, theaters and cafes) with private spaces (landscaped grounds and home entertainment centers).
As demand for rural property outstrips supply, real estate values rise and a lot of people get priced out of the market. Large vacation homes sit empty in the woods and along the ocean front while urgent housing needs go unmet.
Rural sprawl has created a vast network of poorly-graded unsurfaced roads which pour silt and contaminants into our rivers and streams. Rural sprawl disrupts the forest canopy, allowing storms to topple more trees every winter. As more trees fall, frightened rural residents clear larger areas around their homes, exposing even more trees to storm damage, and the cycle escalates until there is no more forest.
Rural sprawl creates new forest fire hazards, suppresses the natural fire cycle and makes it more difficult to fight the fires once they start. Rural sprawl requires more roads and more power lines to serve fewer people, and makes us all more vulnerable to road closures and power outages. Police cars, ambulances, fire trucks and school buses have to travel longer distances to serve fewer people. Domestic animals threaten native wildlife, invasive plants threaten native habitats, and the list goes on. We are destroying the very thing that we moved to our rural homes to enjoy.
Transferable Development Rights
Cities and Counties across the country are grappling with the problem by redirecting growth away from sensitive areas and encouraging more compact growth. Zoning, the traditional method of land use control, hasn’t been very effective. In fact, the standard large-lot zoning used in Mendocino County and other rural areas actually encourages sprawl and limits housing opportunities.
One of the most successful new tools for redirecting growth are called “TDRs” or “TDCs,” short for “transferable development rights” or “transferable development credits.” “Development rights” is the generic term. “Development credits” are the units of exchange used to implement the program. Because private property rights are actually a bundle of rights, you can sell off some and keep the rest.
San Luis Obispo County adopted a TDC ordinance back in 1985 with the help of the Land Conservancy of San Luis Obispo County (a county-wide land trust) and numerous volunteer advisory groups and landowners. Their ordinance is tailored to meet local needs and, unlike other TDC ordinances, is entirely voluntary. The purpose of this ordinance is to “retire” antiquated subdivisions in outlying areas in order to protect agriculture, oak woodlands, wetlands and scenic areas.
Old and antiquated subdivisions are a problem in many rural counties. Some were created for pure speculation before modern subdivision regulations were enacted. Other rural subdivisions are a crazy quilt of odd-shaped lots and land-locked parcels produced by a succession of minor splits. In California, there are countless substandard lots, underlying parcels and phantom subdivisions which can be legitimized by obtaining a “certificate of compliance.” This is a simple administrative procedure equivalent to getting an instant subdivision without public hearings or agency approval.
The San Luis Obispo County TDC ordinance designates specific “sending” and “receiving” areas for transferring development credits. Buyers and sellers can exchange these development credits, valued at $10,000 each, on the open market. Sellers can advertise their development credits in the newspaper or list them with a real estate agent, who handles the sale and gets a commission as with any other real estate transaction. In addition, the ordinance recommends paying a 10 percent bonus to sellers for each additional resource they protect, up to a 50 percent maximum.
Using development credits, a farmer can sell the development rights to his land, pay off his debts and retire. The farmer still owns the land, but it must remain in agricultural use in perpetuity. Or he can sell the land for a reasonable price to another farmer. Because the landowner who sells his development rights decreases the value of his property, he also lowers his property taxes.
Meanwhile, an urban developer on the other side of the county can purchase the farmer’s development credits to increase the density and profitability of his project. The TDC ordinance protects prime farm land and redirects growth to existing urban areas which have the roads, water, sewers and other public facilities to support it.
TDCs can also be set up to protect timberland, cultural and historic resources, highly scenic areas, wetlands and natural habitats. Buying the development rights is a lot cheaper than buying the whole property – an important consideration in an era of rising population and limited government resources.
TDCs can provide positive, voluntary market-driven incentives to redirect growth. This type of approach is becoming more popular as property owners are more likely to sue the government and demand just compensation. Although cities and counties have the right to down-zone property and even acquire it outright through eminent domain, most elected officials are reluctant to take this kind of heavy-handed approach.
The value of the development rights is determined by the maximum floor area allowed under current land use regulations. Buyers and sellers can work out the value among themselves or hire a real estate appraiser to help them. The standard appraisal technique is the “before and after” method, which appraisers use for valuing easements, partial takings and government condemnations.
TDCs have some disadvantages, too. Developing a successful TDC program requires a lot of work and community support. A land trust or other non-government agency usually administers the program, which requires experienced staff and good record-keeping. Also, the program requires comprehensive maps and land use information, which can be expensive and time-consuming to develop and maintain, especially for cash-strapped rural areas.
However, it’s time for rural cities and counties to acknowledge the fact that we have entered the information age. Computers, maps and databases may be expensive, but they are essential tools for resolving the complex planning issues which we now face. TDC ordinances are only one of many new land use regulation tools, all of which can be greatly enhanced through computer technology.
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Chet Boddy, Real Estate Appraisal, Sales and Consulting
43300 LR Airport Road, #59, Little River, CA 95456
707-937-4011, office
707-937-4818, fax
chet@chetboddy.com
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Copyright © 2002 Chet Boddy, All Rights Reserved
Chet Boddy is a Certified General Real Estate Appraiser, Realtor“ and real estate consultant who has lived on the Mendocino Coast since 1976. Look for this and other real estate columns on Chet’s web site at www.chetboddy.com
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