Transfer of Development Rights

What are Transfer of Development Rights ?

Transfers of Development Rights (TDRs) relieve market pressures that threaten to turn low-density property, such as agricultural land or a historic building site, into a higher density use that promises greater economic return.

How Does It Work?

Municipalities must determine which areas of town require preservation and which areas will be developed. Property owners in the preservation area may split off the rights for further development of the land from the rest of their property rights and sell them to be used in areas designated for development. Owners of development sites pay the cash value of the development rights to increase the value of their property proportionately.

What Are The Limitations?

TDR's are not useful in areas experiencing less than high growth or with no high growth prospects. They have limited use in a town with a large area of land requiring preservation yet without an equivalent amount of land where increased density would be appropriate.

What Does It Do?

TDR's allow increased development on land considered best able to absorb it and no, or decreased, development on land to be preserved. With TDR's, a town provides protection for valuable land and buildings without direct cost to the taxpayer and while allowing for beneficial development.

Preservation Easements & Covenants

What are Easements and Covenants?

Individual property owners can chose to protect their significant property through the use of preservation easements and covenants. A preservation easement is a legal document by which specific rights held by property owner are donated or sold to a government agency or a non-profit organization. This document provides protection for historically or architecturally significant buildings, parcel of land or natural resources by regulating alteration and use. The agency holding the easement receives the right to review and comment on proposals for changes as outlined in the document. The registration of the easement at the local land records office binds subsequent owners and ensures protection either in perpetuity or for the specified length of time.

A covenant is simply a binding legal agreement, attached to the property title, which can limit alterations to or use of significant property.

What do they do?

Preservation easements can be designed to provide protection for whatever features of a property are considered important. An exterior or facade easement protects outside features of a building and often regulates development on the lot itself. An interior easement, on the other hand, protects valuable interior features. For farmland, archaeological sites and exologically significant land, scenic or open space easements control development on the property. The donation of a preservation easement usually provides the owner with certain tax advantages, particulary if the property has been listed on the National Register of Historic Places.

A covenant, unlike an easement does not necessarily invove an alteration in property value. A more varied range of regulations on the property can apply, frequently not applicable until a change in ownership occurs. A covenant is very flexible and includes whatever is considered worthy of protection. Because property value is not definitley affected, no tax advantages are available.

What Are Its Limitations?

Although easements are a very powerful tool, they are most commonly used in large urban centers. In more rural areas, with little development pressure, it can be difficult to calculate the exact difference in the fair market value of the property before and after the donation. This value should be established by a qualified appraiser.

Where To Go For Further Information?

The Preservation Trust of Vermont, a charitable non-profit organization, and the State Division for Historic Preservation are both elegible to hold and enforce easements in Vermont. The Preservation Trust holds covenants on significant properties in this state.

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The Vermont Heritage Network
The University of Vermont Historic Preservation Program
Wheeler House, University of Vermont
Burlington, VT 05405
(802)656-3180
http://www.uvm.edu/~vhnet
E-mail To: vhnet@zoo.uvm.edu