Wednesday, July 16, 2008

Too many TDRs?

Farm     High agricultural prices have encouraged many farmers to plant on land that has been left unplowed in recent years, often because of government subsidies or incentives to leave wetlands and other lands undisturbed.  What should government do to keep land for conservation purposes?  Increasingly, governments are turning to transferable development rights –- a technique that is often used to preserve historic buildings and other socially desirable (but privately held) land uses.  Government regulates the land to be preserved, but quells private objections by giving the landowner a TDR to use or sell; the TDR allows a more intensive land use in other, receiving locations, than would otherwise be permitted under zoning and land use laws.
   TDRs make sense as a matter of moderate land use regulatory theory.  But when I teach about them, I inevitably run into this colloquy from a sharp student:
   Student:  “So, if the TDR allows for doing more on the receiving end than would otherwise be permissible, there must have been some reason for the previous land use restriction on the receiving end, yes?”
   Me:  “Well sure, but not a reason that now seems as important as the preservation of the land use on the sending end.”
   Student:  “Okay, maybe this makes sense for some especially urgent ad hoc preservation project, like a plan to demolish Grand Central Terminal.  But if it becomes a permanent part of land use policy, doesn’t this encourage government to impose artificially restrictive laws over wide areas, in the expectation that some of these restrictions might be lifted with the receipt of TDRs, with the result that widespread zoning restrictions are imposed beyond what is needed to serve the public interest?
   Me:  “Well …”

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At first blush that argument makes sense, however as a practical means large scale restrictive land use regulations intended to TDR's, even for valid public purposes, would still be subject to scrutiny over possible regulatory takings concerns especially in light of post-Kelo paranoia - as a result such issues would never get off the ground. I would support the contention that regulatory taking fears would drive greater use of TDRs as relief valves to otherwise reasonable regulations.

Posted by: Derek | Jul 17, 2008 12:54:21 PM