Monday, July 14, 2008

TDRs: A Shell Game In The Making?

More than a year and a half after its target date, the Transferable Development Rights Committee has finally released its much-anticipated report. The issue of TDRs has been bandied about locally since at least 1999, and for the entirety of that period I have been dubious as to the effort, noting that the county lacked both sending zones and receiving zones.

Consider the following paragraphs, taken verbatim from my 2006 campaign web site:

The Mayor has appointed a committee to study Transferable Development Rights (TDRs), with a report expected by the end of 2006. Just as in 2002, I am receptive to the idea of a TDR program, but have doubts as to such a program’s suitability for Athens-Clarke County.

There are two reasons for this, one concerning potential “sending areas” and one concerning potential “receiving areas.” Regarding the former, the Commission has already down-zoned the development potential of the AR zones by 90 per cent; over the years, it has steadily reduced the allowable density of residential development from one house per acre to one house per ten acres. Also, the Commission has deleted some 35 linear miles of sanitary sewer lines projected for the outlying areas of the county from the Public Utilities Department’s original Service Delivery Plan, as called for by the Unified Government’s Charter. Without sanitary sewer lines, any area’s development potential drops precipitously. The Commission is already using the possible implementation of a TDR program, at some unspecified point in the future, as a reason for denying rezoning requests in the formerly unincorporated areas of the county. In light of these actions, one may reasonably wonder just what development rights remain in the peripheral areas of the county to be transferred anywhere else.

Regarding receiving areas, the questions of where they may be located or how they may be structured have yet to be answered. As an observer of local politics for several years, I fully expect that any proposals to increase density in existing neighborhoods will be fought tooth and nail. Without receiving areas willing to increase their residential densities, there can be no workable TDR program.

About the only thing that has changed since then is that the idea of transferring development rights from rural residential areas to in-town residential ideas proved too daunting, so the Committee shifted the focus to transferring development rights from rural residential areas to in-town industrial and/or commercial areas. Even so, I still have questions about just what will be transferred. The Committee’s recommendation that “for the purpose of transfer only, A-R zone property owners should be allowed one property right per acre” strikes me as arbitrary, especially given that what that really means will be determined at a later point by Planning Department staff.

Says Blake’s article on the Committee's report from last week:

But a TDR program alone won't work, [Commissioner Alice] Kinman said. The committee recommends using sales tax revenue and grants or working with nonprofits to buy undeveloped land and easements near waterways and wetlands.

Great. Let’s use even more of my tax money to take more property off of the property tax digest, thereby forcing taxes up on that property remaining on the tax rolls to compensate for the loss. I have pointed out the ultimately self-defeating nature of this process for years, to no avail whatsoever.

Continued Blake’s article:

Commissioner David Lynn said he'd like officials to consider downzoning property in receiving zones to a lower density so TDR credits are more attractive. Athens-Clarke officials should also work with counterparts in surrounding counties to add sending zones in Jackson, Madison and Oglethorpe counties, protecting the Athens water supply upstream and avoiding doughnut-style development with subdivisions just across the green belt on the Clarke County line, Lynn said.

No disrespect intended toward Commissioner Lynn, but this is worst than the idea floated by John Barrow back in 2002 (you know, back when the erstwhile congressman was the darling of Athens’ progressive set and not W’s “rubber stamp”). Barrow’s bad idea was to “downzone” property in receiving areas and make developers pay through the nose merely to reclaim the original density. Lynn would take that bad idea and make it worse by drawing surrounding counties into the scheme. Given the serious implications for their own sales and property tax revenues, good luck getting any responsible officials in adjacent counties to buy into that one.

Which brings me to another point. I commented on Barrow’s downzoning idea In response to an Athens Grow Green Coalition questionnaire back in 2002:

Would you support implementation of a Transferable Development Rights program to protect open space and direct growth?

YES "I am not opposed to TDRs if such a program is structured in a reasonable manner. I would not support a plan, through which an area's existing development rights were 'down zoned,' only to be 'up zoned' at a later date back to their previous level by virtue of a fictitious transfer of development rights from another area. In such a case, I feel that no transfer of rights has occurred in any meaningful sense."

I thought that AGGC’s assessment of my response was deliberately disingenuous, as the organization knew full well that such an approach was precisely what a sitting commissioner, one that it invariably supported, had proposed:

James Garland’s positions consistently contradict those of Grow Green. In addition, his answers to our questionnaire suggest a lack of understanding of issues such as TDRs . . .

Be that as it may, this entire TDR thing is sounding more and more like a shell game to me.

Such cynicism may be forgiven by recalling the “conservation subdivision” ordinance adopted back in 2003. That ordinance, which gave the green activists everything they wanted, was touted as the end-all for managing development in the greenbelt. That ordinance has been a complete and total failure, as its draconian regulations made the construction of a conservation subdivision prohibitively expensive, a fact evidenced by the number of such subdivisions proposed since then, which is precisely zero (zip, zilch, nada). On the other hand, though, if the idea was to go through the motions of passing a development ordinance – one that effectively prevented such development - thereby locking in the one house per ten acres restriction in the greenbelt and giving the Commission political cover, it has been an astounding success.

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Adrian said...

So what is your current assessment of the TDR concept for Athens then?

A TDR program is what this county needs to give some sort of compensation to those who have been downzoned in the AR zone. Since land use rights under zoning are already arbitrary, yes, the transfer system is even more arbitrary. Rights are effectively given and taken by legislation, and what is often done in a situation like ours is that transferable rights are assigned to AR landowners that they can only sell but not use on their lands. (It doesn't have to be a development right that they can actually exercise now under the current zoning, though it often is.) The kind of input that the government needs now is ideas on how we want it to work. It is counterproductive to stay skeptical and dismiss the concept at this point. There are two goals, compensating the AR landowners and encouraging development where we want it (and of the type we want).

Downzoning in the receiving areas is a bad idea for constitutional reasons. The purpose of zoning is to establish reciprocal benefits, and limiting development rights too much defies the rational justification for the zoning scheme. This can be explained in more words. Upzoning the AR might be a good idea if we really want TDR participation to voluntary in a meaningful way, but again TDRs don't actually have to be useable development rights in the sending area.

I agree that using tax money to fund TDR purchases is also a bad idea. Governments that purchase TDRs often seem to get the funds from other sources.

James said...

Yes, I continue to be skeptical. From my perspective, the fact that development rights may be ones that greenbelt property owners “can sell but not use” is a large part of the problem. That being the case, there is really nothing to be transferred as the development rights do not exist in any meaningful sense. Couple that with the proposal that potential receiving areas be downzoned before the application of any transferred development rights into them and the entire TDR process amounts to nothing more than an administrative fiction.

I agree that property owners in the AR zones deserve to be compensated for having the value of their land and its potential uses slashed by the various ordinances implemented over the past several years. However, the Commission can do that at any time under existing structures. Rather than institute yet another regulatory bureaucracy, I think that a better way to accomplish that goal would be to lower the millage rate in the general services district (with the realizations that not all property in the district is in AR zones and that such a move entails difficulties of its own, but given the near complete absence of services in the district, this strikes me as a better approach).

Anonymous said...

"I think that a better way to accomplish that goal would be to lower the millage rate in the general services district"

I may be wrong on this (feel free to correct me) but I don't believe that, under the GA Constitution, you can have separate millage rates within the same jurisdictional entity.

James said...

There are currently five tax districts within Athens-Clarke County. They are the general services district (the formerly unincorporated area of the county), the urban services district (the area of former city limits), the downtown district, Winterville, and that portion of Bogart that lies in Clarke County.

There is no legal prohibition against having differing millage rates in different areas of the county. As a practical matter, the Unified Government's millage rate is the same for all of the districts, with the exception of the downtown district which has an additional 1 mill. Of course, Winterville and Bogart have higher millage rates, but the added mills are a function of the respective municipal governments.

Regarding general and urban services districts, see Part I Article VII Section 7-104 of the Charter. Paragraph (c) specifies uniform assessments, but not uniform rates:

Tax and services districts; taxation therein.
(a) The general services area, as defined and authorized in paragraph (1) of subsection (a) of section 7-301 of this Charter, shall constitute a general services tax district wherein the commission shall levy and collect taxes and shall appropriate money to perform and discharge those powers, functions and services provided therein by the unified government.
(b) The urban services area, as authorized in paragraph (2) of subsection (a) of section 7-301 of this Charter, together with any enlargement or modification thereof pursuant to the provisions of this Charter, shall constitute an urban tax district, as the case may be, wherein the commission may levy and collect additional taxes and may appropriate additional money therefrom to perform and discharge those additional powers, functions and additional services provided therein by the unified government.
(c) The assessment of real and personal property for ad valorem tax purposes shall be upon a uniform basis throughout the entire area of the unified government; provided, however, the rate and manner of additional taxation of services districts may vary in any services tax district from that in another or other services tax districts in such a way as to reflect reasonably the kind, character, type, degree and level of services afforded to such services tax district or districts.

For information on the downtown district, see Part II Chapter 3 Section 5:

Special tax district.
The downtown Athens area, as now or hereafter defined, shall constitute a special tax district. The Downtown Athens Development Authority shall have the power to submit for approval to the mayor and council of the City of Athens a proposed millage rate to be collected based on values of real property in the downtown Athens area, (as herein or hereafter defined) fixed from time to time by the tax digest of the City of Athens, such millage rate not to exceed one (1) mill, for the operation of said Authority. Upon approval by the mayor and a two-thirds vote of the council of the City of Athens such taxes shall be levied and collected by the mayor and council for the City of Athens in the same manner as other City of Athens ad valorem taxes are levied and collected but shall be kept in a special fund or funds restricted to the uses for which such taxes were levied and collected.