Transfer of Development Rights Report - Rhode Island Department ...

ights to land in a receiving area. Over the long term, in theory, such a change should have a neutral
or even positive impact on the owners of land in the sending area. However, these individuals are
likely to view TDR as an untried and complicated program with no guarantee that they will be able to
recover their equity by selling their rights; and they are likely to focus on the short-term impacts on
their ability to use their property in the way that it has been zoned.
Scale
As noted earlier, a TDR program must encompass a significant portion of an active real estate market
if it is to have a meaningful influence on development patterns. At the town level in South County
this condition probably cannot be met. The real estate market in this area is indeed an active one,
particularly in the West Bay communities. However, there are probably not enough transfers within
one community for TDR to affect the overall pattern of growth; and without strong incentives on
both sides there may not be enough potential purchasers of development rights to encourage potential
sellers to participate.
Moreover, the local real estate markets in South County are not independent of each other, but rather
are subsets of larger regional markets that are defined by the major highway routes (Routes 4 and 1
along the coastline, and Interstate 95 running through the interior). This means that there is some
degree of interchangeability among parcels in different towns from the perspective of potential
buyers. As a consequence, development restrictions within one community can have a ripple effect in
adjacent communities: for example, a downzoning in an part of town designated as a TDR sending
area might shift demand to another community rather than (or in addition to) stimulating the TDR
program.
A TDR program would have a greater likelihood of success if it were established on a regional scale,
for example, at the state or county level or through a consortium of towns. By encompassing a larger
portion of the real estate market, a regional program would would have two benefits: the numbers of
potential buyers and sellers within the TDR market area would be increased, and the number of
alternative sites outside the market area would be reduced. To establish such a program, however,
would require the creation of a regional land use regulation system in addition to existing permitting
authority at the local level. Such a regional system would entail amendments to the State Zoning
Enabling Act. Even more problematic would be creating a revenue-sharing system to resolve the
intermunicipal fiscal impacts that would arise from shifting development across town borders.
Disregarding the larger issue of “smart growth” (that is, managing the overall pattern of development
within the community or region), TDR might be useful within a single town for protecting specific
environmental, historic or aesthetic resources. In this case, the TDR program would be targeted to
individual landowners and would involve a more directed program of outreach and negotiation,
rather than depending on the workings of the real estate market to achieve its objectives.
Issues Affecting TDR Feasibility in South County 17