Williams – Spring 2023

Transfer of Development Rights in Urban-Rural Settings: A Conservation and Pro-Housing Strategy for Michigan

Jessie Williams

By “moving” development rights from preserved land parcels to provide density increases elsewhere, transfer of development rights (“TDR”) programs combat urban sprawl and preserve natural and agricultural open space, while incentivizing urban planning best practices such as increased housing density and urban infill.[1] TDR programs are voluntary, allowing agricultural landowners to gain an economic windfall by selling rights to develop their land, while allowing for more housing density in designated receiving sites.[2] TDR programs are currently not implemented in Michigan, due in part to their lack of express authorization in Michigan under the Michigan Zoning Enabling Act.[3] However, Michigan would benefit from TDR programs, given the need in its growing communities to preserve existing rural, agricultural, and ecological land while also creating increased housing abundance. More familiar purchase of development rights programs (“PDR”) are in place in several Michigan counties and townships, and also available through the Michigan Department of Agriculture and Rural Development.[4] While these programs do important work to preserve ecologically and historically important land through deed restrictions, TDR programs fill the additional housing stock gap in growing communities, by maintaining the same amount of housing that would have been built without preservation measures.[5] Therefore, in communities with both preservation interests and the need for new housing to enter the market, a TDR program would be particularly appropriate and would address multiple land use concerns at once.

TDR programs classify certain parcels as “sending sites” and “receiving sites.”[6] Methods can vary between communities for selecting sending sites or receiving sites. Sending sites are parcels of land where conservation is desired, typically in a natural and agricultural state (or, in some jurisdictions, land containing historic landmarks); property owners voluntarily choose to preserve their land by selling a certain number of “transferable development rights” in exchange for economic compensation.[7] Receiving sites purchase a desired number of transferable development rights and are authorized to increase their density as a result; density increases can come in allowable units per acre, or variances on building specifications such as height.[8] Receiving sites must be selected consistently with a town’s future land use plan (sometimes contained in the master plan) — this can occur either on a case-by-case basis or through the designation of specific districts as locations “where […] communities already have determined more development is desirable.”[9] In order to ensure the efficiency of TDR transactions, many municipalities with TDR programs administer the program through a TDR bank run by a local government or nonprofit organization.[10] A bank can “store” development rights where there is not a one-to-one sale and purchase ratio; for example, a property owner interested in selling their development rights can sell them to the bank, regardless if there is a buyer seeking to purchase that exact amount of development rights.[11]

By allowing for increased density in areas designated as appropriate for development while preserving land that a community seeks to keep in agricultural or natural use, municipalities with TDR programs can develop needed area housing while mitigating urban sprawl. Urban sprawl is undesirable with regard to city services’ efficiency, transportation planning and traffic volume, and sustainability concerns.[12] Suburban, low-density development (particularly in jurisdictions with large lot requirements) has been traditionally high-impact in land consumption, with large parcels of formerly undeveloped or agricultural land converted to residential use.[13] The increased distance of these homes from an urban center (where most jobs and amenities are located) creates car-dependent commuting patterns.[14] This increases traffic on roads, which, in turn, increases stormwater pollution from runoff and carbon emissions.[15] In contrast, dense urban infill (the location of likely receiving sites in TDR programs) creates the ability for increased development on land that is already in an improved, or non-natural, state within an urban setting — this can include parking lots, unused municipal parcels, or blighted structures for which a city seeks redevelopment.[16] New infill development is able to use existing utilities, without the need for physical extension of municipal services as in urban sprawl (only an increased capacity on existing city utilities).[17]

There are several barriers to overcome before the benefits of TDR programs can be realized in Michigan. First, the institution of a TDR program requires a community’s openness to denser development types in exchange for preserved open space in their rural environments. Although multi-family developments provide a more efficient use of resources, and provide important age-in-place and first home options, they can also prove controversial in growing city settings. [18] Communities’ zoning ordinances and master plans allow them to individually determine which types of denser development are suitable for them within a TDR program (including missing middle housing options, sized to the current development scale).[19] Additionally, the preservation of land through a TDR program can serve as a factor to change attitudes towards denser housing options; a 2016 study found that notification of the “public benefits” of density (including increased preserved agricultural land) reduced aversion to denser housing types by four times the impact of a control message.[20]

Second, Michigan’s current lack of express authorization of a TDR program creates a level of uncertainty as to the measures municipalities can take towards implementing TDR, and a disincentive to establishing programs. Land use scholar Tom Daniels states that transferable development rights themselves “must be created through state enabling legislation and a local ordinance to allow a landowner to transfer a development right to another parcel owned by someone else.”[21] As transferable development rights do not innately exist in property ownership, express enabling is required to establish TDRs.[22] TDR programs are currently authorized and applied in many states and territories, with either the requisite express authorization in state statutes, or municipalities themselves enabling them in their zoning codes when express statewide authorization is not present (although statewide enabling legislation is seen as “ideal” to instituting a program).[23] [24]

To incentivize communities to take next steps in implementing and benefiting from TDR programs, Michigan should follow the lead of many other states in expressly authorizing municipalities to implement TDR programs. Issues of open space preservation and housing availability are urgent in Michigan — particularly in rapidly growing and urbanizing areas.[25] The density increases provided by a TDR program support urban planning best practices and smart growth goals, ensuring that as cities add requisite housing, the amount of land conversion and new public services construction required are as minimal as possible.[26] TDR programs demonstrate that the addition of new housing to a community can work hand-in-hand with preserving its natural resources, and preserving the rural character around a denser urban area. The implementation of TDR programs in the state of Michigan would support communities’ planning goals and general ideals of agricultural and open space preservation, economic efficiency, and creating walkable and livable communities.

Jessie Williams is a Junior Editor with MJEAL. Jessie can be reached at

[1] American Planning Association, “APA Policy Guide on Smart Growth” (Apr. 14, 2012), https://www.planning.org/policy/guides/adopted/smartgrowth.htm (“The preservation of smaller towns and rural areas in light of development pressures caused by sprawling development patterns is often more economically efficient. Making housing choices available to a range of households, ages, and incomes, all while maintaining the character of the community and the quality of life is important to new and existing residents alike.”).

[2] Center for Land Use Education, “Planning Implementation Tools, Transfer of Development Rights” (2005), https://www3.uwsp.edu/cnr-ap/clue/Documents/PlanImplementation/Transfer_of_Development_ Rights.pdf.

[3] Mich. Comp. Laws § 110 (2006).

[4] See Peninsula Township, Mich., Ordinance 23, Purchase of Development Rights (May 4, 1994), https://www.peninsulatownship.com/uploads/1/0/4/3/10438394/pdrordinance.pdf; Michigan Department of Agriculture and Rural Development, “The Farmland and Open Space Preservation Program,” https://www.michigan.gov/mdard/environment/farmland/general/the-farmland-and-open-space-preservation-program.

[5] Rutgers University New Jersey Agriculture Experiment Station, What Is A Transfer of Development Rights (TDR) Program?, https://njaes.rutgers.edu/highlands/transfer-development-rights.php.

[6] ​​Huron River Watershed Council, Potential Impacts of Transfer of Development Rights for Michigan Communities: The Huron River Watershed Scenarios, 6 (2007), https://www.hrwc.org/wp-content/uploads/HRWC_TDR_FinalReport.pdf.

[7] Tom Daniels, Zoning for Successful Transferable Development Rights Programs, Zoning Practice, American Planning Association, 2 https://planning-org-uploaded-media.s3.amazonaws.com/ document/Zoning-Practice-2007-12.pdf.

[8] Transfers of Development Rights, Local Housing Solutions, ​​https://localhousingsolutions.org/housing-policy-library/transfers-of-development-rights/.

[9] Huron River Watershed Council, supra note 5, at 10.

[10] Local Housing Solutions, supra note 8.

[11] Id.

[12] Douglas Kelbaugh, The Urban Fix: Resilient Cities in the War Against Climate Change, Heat Islands, and Overpopulation 219 (1st ed., 2019).

[13] See American Planning Association, supra note 1; Nolan Gray, Do Minimum Lot Size Rules Matter?, Strong Towns (June 20, 2019), https://www.strongtowns.org/journal/2019/6/19/do-minimum- lot-size-rules-matter.

[14] Organisation for Economic Co-Operation and Development (OECD), Rethinking Urban Sprawl: Moving Towards Sustainable Cities (June 2018), https://www.oecd.org/environment/tools-evaluation/Policy- Highlights-Rethinking-Urban-Sprawl.pdf.

[15] Id.

[16] Supra American Planning Association, note 1.

[17] Supra American Planning Association, note 1.

[18] See Patrick Sisson, Housing’s Missing Middle: A Debate in Arlington, Va., Magnifies the Challenge, Commercial Observer (Feb. 13, 2023), https://commercialobserver.com/2023/02/housing-missing- middle-arlington/; Ryan Stanton, Call for housing density in A2Zero plan a concern for some Ann Arbor officials, MLive (June 1, 2020), https://www.mlive.com/news/ann-arbor/2020/05/call-for-housing-density- in-a2zero-plan-a-concern-for-some-ann-arbor-officials.html.

[19] Mich. Comp. Laws § 110 (2006); Tyler Augst, Community discussion around housing: Identifying existing missing middle housing, Michigan State University Extension Planning, https://www.canr.msu.edu/news/community-discussion-around-housing-identifying-existing-missing-middle-housing.

[20] Carey Doberstein, Ross Hickey, & Eric Li, Nudging NIMBY: Do positive messages regarding the benefits of increased housing density influence resident stated housing development preferences?, July 2016 Land Use Policy 276, 278.

[21] Supra Daniels, note 7, at 2.

[22] Supra Daniels, note 7, at 2.

[23] See the following: Arizona, Arizona Revised Statutes § 11-817 (LexisNexis 2010); California, see Irvine, Cal. Zoning § 9.36.18 (2010); Colorado, see Castle Rock, Colo. Municipal Code § 20.02.015 (2018); Connecticut, Conn. Gen. Stat. § 8-2f (1987); Delaware, Del. Code Ann. tit. 22, § 310 (1999); Florida, see Alamonte Springs, Fla. Land Development Code § 3.45.5 (2008); Georgia, Ga. Code Ann. § 36-66A-2 (2010); Hawaii, Haw. Rev. Stat. § 46-163 (2011); Idaho, Idaho Code § 67-6515A (2014); Illinois, 65 Ill. Comp. Stat. 5/11-48.2-1A (1971); Kansas, Kan. Stat. Ann. § 12-755 (1991); Kentucky, Ky. Rev. Stat. Ann. § 100.208 (1990); Louisiana, La. Rev. Stat. Ann. § 33:4722 (1972); Maine, Me. Rev. Stat. Ann. tit. 30-A, § 4328 (2001); Massachusetts, Mass. Ann. Laws ch. 21A, § 27 (LexisNexis 2018); Maryland, Md. Code Ann., Land Use § 22-105 (LexisNexis 1957); Minnesota, see Blue Earth County, Minn. Code of Ordinances § 24-336 (2021); New Jersey, N.J. Rev. Stat. § 4:1C-51 (1993); New Mexico, N.M. Stat. Ann. § 5-8-43 (LexisNexis 2003); New York, N.Y. Gen. City § 20-f (Consol. 1989); North Carolina, N.C. Gen. Stat. § 136-66.1 (1987); Ohio, see Powell, Ohio Code of Ordinances § 1143.12 (1991); Puerto Rico, P.R. Laws Ann. tit. 21 § 4622 (1991); Rhode Island, R.I. Gen. Laws § 45-24-46.3 (2010); South Dakota, S.D. Codified Laws § 1-19B-26 (1974) (regarding historic properties); Tennessee, Tenn. Code Ann. § 13-7-101 (2001); Texas, see El Paso, Tex. Code of Ordinances § 20.10.695 (2007); Utah,Utah Code Ann. § 10-9a-509.7 (LexisNexis 2007); Vermont, Vt. Stat. Ann. tit. 24 § 4423 (2003); Virginia, Va. Code Ann. § 15.2-2316.2 (2006); Washington, Wash. Rev. Code Ann. § 43.362.020 (LexisNexis 2007); Washington, D.C., D.C. Code § 6-641.01 (1938); West Virginia, W. Va. Code Ann. § 7-1-3mm (LexisNexis 2003).

[24] Lawrence W. Libby and Peggy Kirk Hall, Transfer of Development Rights: A Real Policy Option for Ohio?, The Ohio State University (April 2003), 10 https://aede.osu.edu/sites/aede/files/publication_files/TDR%20ps%20File.pdf.

[25] Beth Milligan, More Dollars, More Say: Traverse City Becoming Metropolitan Planning Organization, Traverse Ticker (March 15, 2023), https://www.traverseticker.com/news/more-dollars-more-say- traverse-city-becoming-metropolitan-planning-organization/?fbclid=IwAR1koT3NLWeEN6cVh3pHg3E2-fcZRDWxsi-CPQzEgAM7-4hOoUWcKh-TV4g.

[26] Supra American Planning Association, note 1.

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