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A new tool for fighting rural sprawl

Developers can already buy up development rights in farmland and nearby forests, transfering the rights to increase density in cities and towns. This new proposal from Cascade Land Conservancy would tap the increased taxes to help pay for urban infrastructure and amenities. It solves economic and legal issues that have held back such transfers.

Farm land and suburban-style development meet in Big Lake, Washington.

Farm land and suburban-style development meet in Big Lake, Washington. Joe Mabel/Wikimedia Commons

It's not sexy and it's not part of this year's green agenda, but it could save 500,000 acres of working farm and forest in central Puget Sound. Oh, and this dramatic new approach to preserving open space is probably constitutional.

The Cascade Land Conservancy has drafted — and Rep. Larry Springer and Sen. Scott White have introduced — legislation, HB1469 and SB 5253, that would set up a system to transfer development rights from working farms and forest — and, if counties choose, other rural land of ecological significance — to urban developers, who could, within willing cities, build at higher densities. The sale would take place either directly, perhaps through private brokers, or through a city or county that would bank the rights and then resell them.

Under these transfers, a common practice for preserving rural land, the landowner would get the money and thus not be tempted to turn rural land into real estate developments. The developer would profit from being able to build more units than the zoning in a city “receiving area” currently allowed. So far, it's all pretty standard stuff, and it's already being done, although not much.

The "not much" is the reason for the novel twist of this proposed legislation. The new incentive is this: The receiving cities could issue bonds against the increased property-tax revenue that denser development would generate in an area around the development. The city could use the bond proceeds to build infrastructure that would both accommodate new people and, potentially, ameliorate the effects on people who already live there.

Developers would still have to pay impact fees, but those fees — substantial though they are — don't pay the full cost of serving new development. For counties, it would also avoid the expense of extending infrastructure and providing services to thinly populated outlying areas. King County supports the legislation.

Under the law as established 10 years ago by Tim Eyman's Initiative 747, a taxing jurisdiction can increase its overall property tax revenue by no more than 1 percent a year, so that if it collects more taxes in one place, it must collect less, on average, everywhere else. New construction, however, allows the jurisdiction to bump the base up.

This mechanism for saving forests and farms would  require no new regulations, no new taxes, no new net government expenditures. Therefore, it avoids the resentment and backlash that regulation and new taxes currently provoke.  And it avoids the weakness of regulations, such as zoning restrictions, that tend to be undercut by economic and political pressuresover time, and circumvented by people and companies with large enough budgets for legal fees.

It wouldn't work just anywhere — or any time. CLC president Gene Duvernoy and Seattle attorney Gerry Johnson, who chairs the CLC's advisory council, explain that you need both population growth — you won't get much interest in transfering development rights if there's no development — and constraints on growth, so that the legal framework puts a premium on adding density in cities, rather than permitting low-density sprawl.

The proposed legislation assumes current zoning. The number of units available in each “sending area” would be based on the number that could be built now. The whole scheme works only under that assumption. At current zoning, cities would have to absorb only about 18,000 new dwelling units.  The development rights would cost no more than about $2 billion.  If one were to assume upzoning, both the number of new units and the cost would become prohibitive.

Current zoning permits only one house per 80 acres on east King County's resource lands, but no one really thinks that even such low-density zoning by itself can hold the line. Experience shows that if houses are actually built in such places, new residents soon exert pressure on the farmers or timber owners to stop running tractors or chain saws in the early morning; landowners are expected to preserve the open space without generating any income from it. Then, the landowners themselves start generating pressure to upzone, and pretty soon, there goes the neighborhood.   A market for development rights enables current owners to keep doing what they're doing, and may give them enough additional cash flow to justify the underlying value of their investment.


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Comments:

Posted Mon, Jan 31, 7:03 a.m. Inappropriate

If you were a city, why wouldn't you simply upzone on your own and skip the hassle of dealing with transfer purchases? The costs associated with bonding against a future tax revenue stream? CLC was trying to make TDR's mandatory at one point for any modifications to Growth Management boundries, it sounds like they are moving in the same direction again.

Cameron

Posted Mon, Jan 31, 7:57 a.m. Inappropriate

Tools to deal with the concurrency mandated by the GMA but ignored by many cities, particularly Seattle, are welcome. I'd feel a lot more comfortable if this aspect of the law:

"The city COULD use the bond proceeds to build infrastructure that would both accommodate new people and, potentially, ameliorate the effects on people who already live there."

was changed to this:

"The city MUST use the bond proceeds to build infrastructure that would both accommodate new people and, potentially, ameliorate the effects on people who already live there."

The reason is cities could use bonded incremental increases to support general fund obligations and maintenance. This is nothing more than borrowing against our kids' futures. Seattle has been good about this traditionally, but there is no guarantee that will continue.

Mandating the TDF funds be used to deal with infrastructure to meet GMA concurrency requirements is a sound edit to the legislation and one the Legislature should strongly consider.

ddmiller

Posted Mon, Jan 31, 9:06 a.m. Inappropriate

It sounds like the legislation would encourage building beyond current development standards in "willing" cities with little or no regard to legacy population and buildings. Well, what is a "willing city"? one that is prepared to jettison its zoning regulations? do the authors of the subject legislation have any particular city in mind?

kieth

Posted Mon, Jan 31, 10:33 a.m. Inappropriate

A problem with the legislation is buried in the definition of "receiving city" which denies cities smaller than 22,500 population the incentives of participation. This unnecessarily inhibits that important class of jurisdictions from dealing with the same growth/infrastructure problems that the larger ones face. In fact, the smaller jurisdictions have greater challenges in competing for the existing state and federal funding programs.

-curmudgeon

Posted Mon, Jan 31, 11 a.m. Inappropriate

Looking at Seattle's 630,320 population wiping out much of the road and other infrastructure, I say 'sprawl' is good. The state would benefit if more people and action took place in Omak, Pomeroy, and Skamania County. This transfer scam is similar to the Catholic indulgences and carbon credit swaps proposed in the dead cap and trade (tax) legislation. Good thing that T.I.F is unconstitutional. That fact helped kill the Seattle Commons.

animalal

Posted Mon, Jan 31, 12:07 p.m. Inappropriate

Agree with Miller. Bait and switch is as old as the world famous comprehensive plan aka:"Towards a Sustainable Seattle." The fairer way to preserve local farmland remains that practiced by the PCC Farmland Trust. Reasons are as stated here (note, also, valid reasons for urban protest):
http://www.housingforall.org/mallach_calavita_on_land_and_IZ.pdf

afreeman

Posted Mon, Jan 31, 8:34 p.m. Inappropriate

New tool for fighting urban sprawl?

How about some old tools: condoms and birth control pills.

Lincoln

Posted Mon, Jan 31, 11:01 p.m. Inappropriate

It's a noble effort but it seems implausible that people in, say Wallingford, are going to allow, say, six story buildings so that people who live out in the suburbs -- next to the preserves -- will benefit. I.e the problem of the receiving area.

It's tough.

I think that buying timberlands (and what farmland still exist) should be purchased and managed for income to pay off the bonds etc etc.

Posted Tue, Feb 1, 10:16 a.m. Inappropriate

Wow. What this appears to be is a way to use the issue of rural land preservation to sell increased public debt to build infrastructure for developers.

TDR – transfer of development rights – is already allowed in Washington, but has not been widely embraced. It’s an efficient urban tool – and was created in New York City almost 100 years ago to preserve urban open space.

TDR tends to increase the price of rural working lands. As a conservation measure, it’s inefficient – a developer will buy the cheapest rights and that is typically not the land best suited for long-term preservation.

CLC and Washington have been participating in an experiment mentioned here to set up a regional TDR program for the last few years. It was sold as a demonstration. Where are the results so the public can evaluate its efficacy? Why create a mechanism to create more debt – using tools that have not been proved to work here in Washington – when local governments can barely pay their current bills?

Posted Sat, Feb 5, 2:05 a.m. Inappropriate

If TDRs were such a great idea, they would be popular with developers, rural areas and cities. So far as I can see, TDRs are only popular with theorists who think unpopular manipulation will work. It won't.

When populations grow, growth happens. The majority of people do not expect, nor desire to live where they can reach out and touch someone. Surprisingly, it's still a free country, and most of us refuse to live the dream that someone else created with regulatory manipulations.

Farming is dwindling here because we've outsourced that too. Think about where the cucumbers that your pickles are grown: not in the US.

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