Dear Neighbors,
As promised last month, here is the special
edition on Transfer and Development Rights (TDR). I did a lot of digging and interviewing
to research this topic. I tried to simplify
it as much as possible without oversimplifying it. TDR is an important
issue. It has been Lumberton's primary program for managing development
and preserving open space for the past eight years. The future of the
program will be one of the major issues in this year's Township Committee
elections. Unlike my normal issues, this article is pretty long and is
focused on TDR only. Please take the time to read it and share it with
your neighbors and friends.
The article is organized into three
areas:
The Past, The Present and The Future. The Past
section provides a good overview on the program, its goals and impact to
date. The
Present section outlines the current state of the program and the different
views on how the program should go forward. Finally, The
Future section provides some insight into where the program is going and
what forces will be influencing the direction of TDR.
The Past ...
In 1989, New Jersey passed a law permitting pilot TDR programs in Burlington
County. In 1995, Lumberton was the first municipality to implement TDR.
The objective of the program was to preserve large, contiguous tracts of
farmland as open space. Under the program, much, but not all, of the land
designated as Residential Agriculture was further designated into either a
Sending or Receiving Area. The Sending Areas were targeted for
preservation, and the Receiving Areas were designed for higher density
development. A two-acre per house minimum was maintained across all land
in the Sending and Receiving Areas. The goal was to concentrate all the
development in the northern part of town and preserve the farmland along the
southeastern end of town, see map.
The program was voluntary for landowners. Each parcel of land was granted
credits based on the suitability of the soil for septic and the number of
existing dwellings. Land with slight (good) soil quality was given one credit for two acres. Land with moderate soil quality was provided
one credit for four acres, and land with severe soil quality was assigned one credit for 50 acres.
Based on the soil quality and the number of existing buildings, each parcel of
land over six acres in size and farmland qualified at the time of the adoption
of the ordinance was given TDR credits. As an incentive to
participate in the program, each parcel of land was provided an additional 10%
in TDR credits for participating. As another incentive, the Receiving Area
was set at only 70% of the size of the Sending Area. If landowners want to participate in the program, there was an incentive to sell into the program before potential
Receiving Areas were gone. This was also designed to prevent excessive run
up in TDR credit prices as the number of remaining TDR credits decreased.
Once the credit program was set up, all new development applications had to either build a house on
a two acre lot or purchase TDR credits from landowners in the Sending Area for construction in the
Receiving Area. For example, to build a 100 house development on a 50 acre parcel
of land (with 25 credits) in the Receiving Area, a developer would have to purchase an additional
75 TDR credits from landowners in the Sending Area. Once those credits were purchased, the
Sending Area landowner retained ownership of his or her property, but the development rights
for that land to were legally extinguished. The credits were bought and sold on the market at a price negotiated between the developer and landowner.
From 1995 to 2001, the market rate of TDR credits increased from approximately
$19,000
to $30,000 per credit.
In 1997, the program was modified to add additional farmland north of the
Rancocas Creek in the program. Additionally, the credit ratio for senior
housing was modified from one house per credit to one house per .6 credits for Lumberton Leas
and one house per .7 credits for another proposed, but never built, senior housing development off
Earyestown Road. The rationale for this was to make it more economical to build
senior housing since it places no burden on the school system and is actually profitable for the township in terms of
property tax revenue received minus cost of township services rendered.
Under the TDR program, three developments were completed: Lumberton Leas, Coventry Glenn and Powell's Mill.
This development preserved 840 acres of farmland or about 10% of the total area of
Lumberton (click to see map).
This occurred without any direct taxpayer expense. However, it should be noted that if you purchased one of these houses, you probably paid
at least some of the cost of preservation in the purchase price of your home.
The Present ...
In August 2002, the Township Committee passed two direct and one indirect changes to the TDR Program.
The direct changes increased the minimum lot size from two to five acres per house and changed the credit values from
based on soil quality from one credit per
two, four or 50 acres to five, 10 or 50 acres respectively. The indirect change came from the rezoning around the South Jersey Regional Airport from Industrial to Residential Agriculture.
This increased the amount of land available to residential development. The net change to landowners is a 60% reduction in number of
credits for land with slight or medium soil quality. The table below illustrates the
revaluation.
Value of One Credit by Acres of
Land
| Soil Quality |
Old (Acres) |
New (Acres) |
| Slight |
2 |
5 |
| Medium |
4 |
10 |
| Severe |
50 |
50 |
* Assumes no existing building on
land.
Shortly after the changes were
enacted into Ordinance, three of Lumberton's largest landowners - Cave
Enterprise, Village Rentals and Medford Nursery - filed lawsuits against the
township seeking to get the changes overturned as well as other court
remedies.
The proponents of the changes are
the Democrats who took control of the township committee in 2001. The
Democrats state the reasons for making the changes
were to reduce sprawl development and slow growth. At the time of the
changes, the Democrats asserted there are 4,000 acres of land open in town and that by changing the minimum from 2 acres to 5 acres per house, they were reducing the number of houses by 1,200 units. Under
pressure from opponents of the changes, they later revised this number to 800
units. The Democrats argue further that TDR does not reduce the number of houses. It only moves them
from one location to another. The table below compares the maximum
number of units based on a two and five acre minimum lot size based on three different scenarios.
Maximum Number of House
in TDR Areas
| Building Options |
2 Acre Minimum Plan |
5 Acre
Minimum Plan |
| Using TDR (Higher Density
Development) |
633 |
254* |
| Without TDR (2 or 5 Acre Lots)** |
2000 |
800 |
| With Senior Housing |
550 Senior
Houses & 248 2 Acre Homes |
Can't Be Done
*** |
* 86 acres were added to RA/S as
part of the indirect changes.
** Assumes all remaining land has
slight soil quality and ideal lot orientations.
** *There is not an
official allocation of TDR Credits since the 2002 Changes. Under
the old program, 385
Credits were required for a 550 unit Senior Housing Center. There
would only be 253 Credits remaining base on Devalued Pre-2002 Credits
and additional Rezoned Land.
The Democrats also argue that TDR has
accelerated the rate of growth in Lumberton because higher density developments
like Coventry Glen and Powell Mill are more attractive than houses on bigger
lots. They cite a statistic that on average 100 new houses were built per
year in Lumberton during the seven years prior to TDR (1988-1995). This
increased to 150 houses per year for the seven years after TDR was implemented
(1995-2002). Additionally, the Democrats assert that the
accelerated growth rate has placed a major strain on municipal services and the
township's schools resulting in higher taxes to support new school construction
and expanded services.
Finally, the Democrats assert that
for every 400 new houses, Lumberton requires a new school. On average,
each new house has a net cost to the township of about $3,000 per year because
of the high costs of public education and
municipal services. By reducing the number of houses by 800 units,
Lumberton will have to build two less schools which will prevent two major
increases in property taxes.
The Republicans who designed and
implemented the original TDR program are the principle opponents of the changes.
The Republicans argue that the changes
have several fundamental flaws. First, the Republican argue that the
changes enacted in 2002 along party lines is illegal for all the reasons that
the plaintiff assert and is very unlikely to stand up to litigation leaving
Lumberton with the same program and a large legal bill. The Republicans
further assert that there are not 1,200 or 800 more houses
that can be built in Lumberton's TDR Areas. They argued that there
are only about 600 more homes that can be built under the original two acre
minimum program and that the numbers provided by the township planner do not reflect
lot orientation or soil
quality. The Republicans further argued that landowners will opt to sell their land
for development on five acre lots which would create more, not less sprawl and
stretch school bus and emergency services routes even further. The
Republicans cite the proposed Foxcroft
Estates development as an example (See Lumberton
E-News August 5, 2003 for more details). Foxcroft Estates will be
built on 36 acres of land that only supports seven homes under both the previous
and current programs. Thus, there are no reduction in the number of units,
only a reduction in open space.
The Republicans also
challenge the argument that TDR caused growth. The last eight years has
been the largest real estate boom in American history while the years prior to
TDR included several years of a real estate slump. When leveled against
state and national averages, the growth rate before and after TDR is about the
same. For example, neither Mount Laurel nor Burlington Township have a TDR programs. Both of those towns have
seen as much, if not more development pressure than Lumberton.
Finally, the Republicans assert that not all
houses produce an equal impact on the community. The
construction of one, 550 unit senior housing complex will almost exhaust the rest
of the TDR credits and create no burden on the school system while still
preserving at least another 300 more acres of land as open space. The
changes made in 2002 make it impossible to build an age restricted
development. After the 60% reduction in the number of credits, there are
not enough credits left in the program. The Republicans argue that the best approach
would be to maintain the five acre minimum lot size in the Sending Area, but
restore the credit allocations from the original program. This would accommodate
a 550 unit deed restricted development, almost exhaust the TDR program, create
no burden on the schools and preserve several hundred more acres of open
space. The table below compares this proposal with the existing
program.
Existing TDR vs. New Proposal
| Building Options |
Existing Democrat
Plan |
Proposed
Republican Plan |
| Senior Houses |
0 |
550 |
| Single Family Homes on 5 Acres
* |
254 |
99 |
| Minimum Acres of Additional Open Space Preserved |
0 |
571 |
* Assumes all remaining land has
slight soil quality and ideal lot orientations.
The Future ...
The future of the Lumberton TDR
program is dependent on two events - the outcome of the three lawsuits and the
fall Township Committee election.
Three of Lumberton's largest
landowners filed separate lawsuits against the township in New Jersey Superior
Court. All three parties filed on grounds that the township ordinances changed the minimum acreage and TDR credit formula violate Federal
"Taking" Laws, NJ Municipal Land Use Law, NJ TDR Law, and Lumberton's
original TDR Ordinance. The three cases are still pending and have
been combined into one case under the same judge. There is not much
more information available on these cases because all parties are under a court mandated
gag order. If the judge rules in favor of the township, the changes
enacted last year are more likely to stay in effect. If the judge rules in
favor of the plaintiffs, then there is a wide range of remedies available to the
judge including overturning the ordinances, imposing punitive damages against Lumberton
and requiring Lumberton to pay all parties legal fees.
The other event that will have a
large impact on the direction of TDR program is the Fall 2003 Township Committee
election. The two incumbent Democrats up for re-election, Mayor Preston Taylor and Township
Committeeman Lou Kinicki, championed and voted for the 2002 changes. The
Republican challengers, John Pagenkopf and Mike Mansdorfer, both support the proposal
to restore the TDR credits, but maintain the five acre minimum on the
Sending Area.
Closing
I hope you found this article
informative and increased your understanding of the TDR program. I also
want to make people clear that there still is a significant amount of new home
development capacity in Lumberton outside the TDR program and with approvals
that are grandfathered to a higher density than the 5 and 2 acre minimums that
have been in effect for the past eight years. The Meadow Glen and
Country Estates Phase 3 developments are two large examples of this, but that is
a topic for another newsletter.
Finally, I would like to thank all
the people who I interviewed or helped gather information for this article
including by not limited to: Lou Kaniki, Susan
Kraft, June Madden, Mike Mansdorfer,
Beverly Marinelli, John Pagenkopf, Dewitt Pennypacker, Susan Purisky, Dan Seager, Preston
Taylor and Bruce Whited.
Patrick Delany
Founder & Editor
Lumberton E-News
