The Puget Sound Regional Council (PSRC) has approved a resolution that will engage cities in a Transfer of Development Rights (TDR) program to protect rural lands in King, Pierce, and Snohomish Counties. Under this program, counties would buy the right to develop from landowners, thus ensuring that those lands will remain as farmland or other rural activity. Cities would then require developers to purchase TDRs if the developers wish to build to the maximum allowed height and density.
The “Landscape Conservation and Local Infrastructure Program” implements a law approved by the Legislature in 2011, thanks to the work of the Cascade Land Conservancy (now known as Forterra). The law also creates a voluntary program that allows infrastructure financing through the incremental increase in property values that result from development in a specific area. The area must be designated to receive the development rights transferred from the rural lands and must have infrastructure needs that are necessary to fund in order to generate the development that will use the transferred development rights. Under these circumstances, the local government can receive up to 75% of the incremental property taxes that would otherwise be paid to other entities in order to finance the necessary infrastructure.
The first step in implementing this program is for each county to calculate the total number of development rights that may be available on eligible natural resource and rural lands. The Puget Sound Regional Council then allocates these development rights to cities that are eligible under the state legislation to receive them. Only King, Pierce, and Snohomish Counties are covered by the legislation.
Each county calculated the number of development rights that can be transferred by determining how many acres of agricultural, forest, other rural land are currently unprotected, and how many development rights exist on that land that could be purchased from the property owners. King County then added the number of development units that already have been purchased under other programs and not yet transferred into urban areas. King County proposed allocating 7,643 development rights, Pierce County 5,371, and Snohomish County 11,619, for a total of 24,633 development rights. If the program succeeds, 811,535 rural acres would be permanently protected from development. The role of PSRC is to allocate those development rights to each city based on the City’s share of regional housing and employment targets, modified by “other relevant factors”.
The City of Seattle strongly supports this program, and we are looking forward to participating. However, we also have a complex structure for allocating development rights that includes requiring developers to fund affordable housing, protecting historic buildings, and other priorities within the City. We were concerned that an unrealistic number of development rights were proposed to be allocated to Seattle under this program – that the Counties were not going to be able to obtain as many rights as they thought they could, and that Seattle would not be able to use the nearly 6,300 TDR’s that were allocated to us. After much negotiation, a new formula was agreed to that reduced the total number of TDR’s expected to be generated in this program by 25%, which we believe is a more accurate reflection of what is realistically possible, and included a couple of other provisions that directed more TDR’s to smaller cities, who generally do not have the existing TDR type of programs that Seattle does. The result is that Seattle will receive 3,440 TDR’s through this program – still more than half the number of TDR’s expected to be generated in King County.
This new allocation is still ambitious. In order for the City to use the infrastructure financing tool that is part of this program, developers or the City need to purchase a certain portion of those 3,440 TDRs. City staff is currently evaluating the costs, benefits and risks to determine whether the program will be financially feasible for the City. We are hopeful that we will find a way to participate in this program that could protect so much of our farmland and other rural areas, and are looking forward to the next steps. These would include ordinances approved by the County and City to get the program up and working. If all goes well, we hope to have those completed in the next few months.