Purchase of Development Rights

From PlanningWiki

A Purchase of Development Rights (PDR) is the acquisition of the rights to develop certain parcels of property. The usual purpose and result of this is to create a conservation easement by depriving the land's owner of the rights to develop the land or use it for other than specified purposes. Especially in the Eastern United States, programs to acquire development rights to preserve agricultural land are called Purchase of Agricultural Conservation Easement (PACE).

Contents 1 Pricing of development rights 2 Distinguishing PDR from other programs 2.1 PDR versus Conservation Easement 2.2 PDR versus Transfer of Development Rights (TDR) 3 PDR Programs 4 External Links

Pricing of development rights

The price of development rights is calculated as the difference between the full value of the land (i.e. the price it would fetch for its "highest and best use") and the residual price of the land (i.e. the market value of the land with the restrictions applied). The residual price of the land is often calculated using income capitalization, which divides the net annual income of the land by current interest rates.

Distinguishing PDR from other programs

PDR versus Conservation Easement

A PDR is any purchase of development rights. A conservation easement exists anytime anytime development rights are transferred to another party so as to prevent development. Because a conservation easement may be created by either a purchase or a donation of the development rights, not all conservation easements involve PDR.

PDR versus Transfer of Development Rights (TDR)

Whereas a PDR program usually retires or locks up the development rights, transfer of development rights programs allow developers to transfer development rights from one parcel to another. Often, this transfer is from a parcel in a designated "sending" area to another parcel in a "receiving" area. This is often used as an incentive to preserve farmland and historical landmarks. For example, the New York City Landmarks law forbids the substantial changes to landmark sites. To blunt the impact this might have on the owner of designated landmarks, a transfer of the development rights is allowed to other nearby parcels. This allows larger structures to be built than would otherwise be allowed.

PDR Programs

• Suffolk County, NY - The nation's first agricultural PDR
• Alchua, FL - Uses both PDRs and TDRs
• Conservation Trust for Florida - Organization that purchases development rights in Florida

External Links

• "Purchase of Development Rights: Conserving Lands, Preserving Western Livelihoods" - Publication detailing the use of
• Cyburbia forum thread on PDRs
• Fact Sheet on PDRs