Transferring Development Rights

About the TDR Exchange

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The TDR Exchange primary purpose is to serve as a platform to bring buyers and sellers of commodities together in a convenient online forum to facilitate the transfer of development within the Lake Tahoe Basin. In the Tahoe Basin, regulation of development plays an important role in balancing environmental impacts with the successful growth of area communities. Prevention of environmental degradation and reversal of damage caused by development is achieved in three primary ways:

  1. managing growth through the allocation of development,
  2. transferring of development from more environmentally sensitive land to less environmentally sensitive lands and,
  3. retirement and restoration of previously developed areas.

Together, these approaches help to direct redevelopment and new growth to appropriate areas and further the environmental, economic and community goals of stakeholders throughout the Basin. Transfer of development rights, otherwise known as TDR, is a TRPA regulatory strategy used to manage growth within the Lake Tahoe Basin. Voluntary and incentive-based, TDR capitalizes on market forces to direct development away from sensitive lands into more desirable areas such as town centers. TDR is based on the designation of standard sending and receiving areas, as well as the distinction between land ownership and the rights necessary to develop a parcel.

Sending areas are typically lands that have been identified for preservation or deemed environmentally sensitive and therefore are not suitable for development. Receiving lands on the other hand are areas in which additional growth is desirable and beneficial. Development rights, or commodities as they are sometimes called, serve to quantify development and act as the building blocks for growth management. By transferring the rights from a sending to a receiving parcel, TDR works to implement programs designed to increase affordable housing as well as other desirable development and restore of sensitive lands and achieve the following:

  1. help direct growth away from sensitive areas, facilitating achievement of environmental goals
  2. contribute to more compact development patterns thus making downtown areas more walkable, reducing the need for vehicle trips and reducing greenhouse gas emissions (GHG)
  3. allow property owners to realize value through sales of rights from their parcels

In Tahoe, transferable development rights are those that can be banked and/or verified as legally existing by TRPA. These rights include:

  • land coverage (existing and potential)
  • commercial floor area (CFA)
  • existing residential units of use (ERU)
  • tourist accommodation units (TAU)
  • residential development rights (RDR)
  • residential allocations
  • restoration credits

See glossary below for definition of terms. The suitability of parcels for development and designation as a sending or receiving site is determined on an individual basis according to a series of factors including land capability, historic and existing development, as well as location. While many parcels can serve as sending or receiving sites, incentive programs exist to move development from sensitive lands, into designated town centers, and to help complete projects that benefit the community. For details associated with TDR regulations and incentives please refer to the TRPA Code of Ordinances Chapter 51.

Incentives & Conversions

Under the TDR Program, the opportunity exists to transfer development at a rate greater than ‘1 to 1’ as well as convert commodities based on the characteristics of the associated project and/or those of the sending and receiving parcels. In the case of transfer incentives, a residential development right or existing development in the form of a residential unit, tourist accommodation or commercial floor area can be transferred on a sliding scale ‘1 to 1’ to ‘1 to 3’ depending on the sensitivity of the land from which the commodity is being transferred. Furthermore, an additional incentive may be realized if a commodity is transferred into a designated ‘center’. The tables shown below identify the land capability and distance ratios that can be utilized to calculate a final transfer amount.

Table 51.3-6.1 table 51.5.3.1

 Certain commodity types are also eligible for conversions. These include:

  • TAU converted to residential units
  • TAU converted to commercial floor area
  • Residential units converted to commercial floor area
  • Residential units converted to TAU

For further details associated with TDR regulations and incentives please refer to the TRPA Code of Ordinances Chapter 51. For an overview of the policy analysis completed during the creation of these incentive programs please refer to the document series on the Lake Tahoe Sustainable Communities website.

Participants in the TDR market include individual landowners and their representatives, land banks and lead agencies. Individual landowners may transact with one another directly or may utilize a representative such as a realtor to complete a transaction. Landowners and their representatives may also interact with one of the TRPA designated land banks, the California Tahoe Conservancy (CTC) and the Nevada Division of State Lands (NDSL), both of which serve as a source for commodities. Lead agencies including counties, the City of South Lake Tahoe and TRPA are responsible for facilitating, approving and a tracking transfers. Transaction information is reported by lead agencies to TRPA via the Commodities Reporting Form, a restricted access site.

The process for conducting a transfer varies depending on the location of sending and receiving parcels as well as the commodity and parties involved but can largely be categorized into the removal and/or banking of a commodity from a sending site, application for a project at a receiving site, and transfer of commodity to the receiving site. More information on applying for a transfer is in Transfer Process below.

To help increase awareness, participation and transparency in TDR, TRPA has created the TDR Exchange. An online marketplace primarily designed to connect buyers and sellers of commodities, the TDR Exchange allows seekers and sellers of commodities to create postings and view trends in the market. The TDR exchange does not play a role in completing TDR transactions. Upon creation of a user profile, an exchange user can create posts advertising the need for or availability of transferable commodities as well as view posts from fellow users. To create a profile and/or edit an existing commodity posting go to the TDR Marketplace webpage.

Please contact pdobbs@trpa.org with any questions regarding TDR.

Transfer Process

Below is an overview of the procedure for completing a transfer of development. Steps may vary by lead agency, parties involved in the transaction, and the commodity being transacted. The process outlined below does not replace the application and approval procedures utilized by each individual lead agency. Shown in the table below are steps required to conduct a transfer from the perspective of both a sending parcel and a receiving parcel. Many of these steps may be completed in parallel with one another. Parcel owners should also be prepared to provide proof of ownership, a preliminary title report, and should notify any lien holders who may be affected by the transfer.TRPA Transfer of Development Application

SENDING PARCEL RECEIVING PARCEL
  • Verification of legal existence of commodity
  • Land capability verification
  • Banking application and/or acknowledgment of site restoration
  • Completed project application
  • Transfer application (land banks will submit on behalf of commodity recipient)
  • Land capability verification
  • Completed project application
  • Transfer application (land banks will submit on behalf of commodity recipient)

Trends

Please check back periodically for updates in market trends.

FAQs

Factsheet providing an overview of the Transfer of Development Program at TRPA

Q: I’m building a home on a vacant (previously undeveloped) parcel, what do I need to know about TDR?

A: TDR can help you make the most of your ability to develop a parcel by providing the opportunity to transfer in the rights necessary to build if they are not already on the site. In order to build a new residential unit, a parcel must have a buildable Individual Parcel Evaluation System (IPES) score, a residential development right, and a residential allocation. A parcels IPES score dictates how much of the parcel can be developed (base allowable coverage). In many cases additional coverage may be transferred to the property beyond the base coverage allowed by the IPES score to an upper limit also known as the max allowable coverage. If you have a buildable lot and your max allowable exceeds your base allowable, you may be eligible to transfer in more coverage. Most vacant parcels within the basin have a residential development right and can receive a residential allocation from the local jurisdiction. Should one of these commodities not exist however, they can be transferred from an eligible sending site.

Q: What does it mean to deed restrict a property? Can anything be built on the property in the future?

A: There are multiple kinds of deed restrictions that effect properties differently depending on the sensitivity of the land (i.e. land capability rating). When a sensitive property becomes deed restricted, a permanent restriction is attached to the land making it unbuildable in perpetuity. Alternatively, if the development rights are removed from non-sensitive (i.e. high capability land), the property can be developed in the future by transferring rights back on.

Q: How do I determine if my lot is sensitive?

A: Designation as a sensitive lot is determined through a land capability verification conducted by TRPA. Based on an actual onsite analysis including analysis of soil profile, slope, vegetation and impact on the area watershed, a land capability score is assigned to the parcel. This value may be either a Bailey land capability value or an IPES score depending on the existence and type of development on the site. Traditionally, Bailey ratings of 1-3 are considered sensitive while IPES ratings are those at or below 725.

Q: How do I determine what commodities or TDRs exist on my property?

A: The type and amount of existing commodities on a property are determined via field verification conducted by TRPA. To begin the verification process, a Banking and Verification of Existing Land Coverage and Uses application must be submitted. Only uses and coverage legally established with required permits or proven to be existing prior to 1972 will be verified.

Glossary

Bailey land capability: ranks a parcel’s suitability for development based on the impact on Tahoe’s water quality. The Bailey system is used for all developed parcels and for vacant parcels not proposed for single family residential development.

Base allowable coverage: the allowable coverage on a given parcel determined by using the Bailey land capability classification or IPES system

Commercial floor area (CFA): the gross square footage of floor area within the outer wall of a commercial building, not including stairwells and airshafts

Existing residential units (ERU): derived from the removal of a residential unit on an improved parcel

Individual Parcel Evaluation System (IPES): a numerical score assigned to vacant single-family residential parcels reflecting the sites suitability for development based on the impact to Tahoe’s water quality. The score at which a parcel becomes buildable varies by jurisdiction and the existing amount of development in the area

Land Bank:TRPA designated entities that may conduct land acquisitions, land restoration, and commodity banking to help further TRPA transfer, mitigation, and restoration programs. The California Tahoe Conservancy (CTC) and Nevada Division of State Lands (NDSL) are designated land banks within the basin.

Land coverage: A man-made structure, improvement, or covering, either created before February 10, 1972, or created after February 10, 1972, pursuant to either TRPA Ordinance No. 4, as amended, or other TRPA approval, that prevents normal precipitation from directly reaching the surface of the land underlying the structure, improvement or covering. Such structures, improvements, and coverings include, but are not limited to, roofs, decks, surfaces that are paved with asphalt, concrete, or stone, roads, streets, sidewalks, driveways, parking lots, tennis courts, patios: and 2) lands so used before February 10, 1972, for such uses as for the parking of cars and heavy and repeated pedestrian traffic that the soil is compacted so as to prevent substantial infiltration. A structure, improvement or covering shall not be considered as land coverage if it permits at least 75 percent of normal precipitation directly to reach the ground and permits growth of vegetation on the approved species list.

Lead Agency: an entity, including TRPA, a local jurisdiction or a land bank, that initiates and/or approves the transfer of development

Legally existing: development permitted through TRPA or a local jurisdiction according to the rules in place at the time of development. Development permitted prior to 1972 is “grandfathered” and considered legally existing.

Max allowable coverage: the maximum amount of coverage allowed on a parcel

Residential development rights(RDR): the right to potential residential use that is attached to certain parcels in the region

Residential allocations: an apportionment of additional development needed to build a residential unit

Restoration credit: derived from the restoring an area so as to function in a natural state and be permanently protected from further disturbance

Sensitive Lands: lands identified as having low development capability including those at or below an IPES score of 725, those with a Bailey rating of 1 to 3, and lands within the backshore

Tourist accommodation units (TAU): a unit, with one or more bedrooms and with or without cooking facilities, primarily designed to be rented by the day or week and occupied on a temporary basis.

Town Center: hubs of mostly commercial, activity defined in the regional plan, that have been identified for environmentally beneficial redevelopment and revitalization in order to create more sustainable and less auto dependent development patterns. Certain types of development are eligible for higher transfer ratios as defined by the TRPA Code of Ordinances, Chapter 51: Transfer of Development.