Transfer of Development Credits
What is it?
A Transfer of Development Credits (TDC) program is designed to help communities deal with rapid growth and conversion of their valued landscapes. These programs allow developers to build beyond the existing regulated limits by purchasing development ‘credits’ that have been assigned to landowners who have committed to increased development restrictions in another area. While leaving the base zoning in place, municipalities can use TDC programs to encourage development in areas more suited to it, while perpetually conserving ecologically-important lands.
After establishing the program, the municipality allows market forces to take over, as TDC programs rely on market incentives to encourage developers to seek increased density for their development through the purchase of credits, and interested landowners in the conservation area to make credits available for sale. Those transactions (negotiating, price-setting, buying/selling) occur between the buyer and seller, and do not involve the municipality, whose only involvement is to ensure alignment with the program rules.
How can municipalities use it?
The Transfer of Development Credits tool was enabled Government of Alberta, under the Alberta Land Stewardship Act, and is implemented locally by a municipal government. Once the municipality has identified areas suitable to increased development (e.g., increased building density) and areas valuable to the community in their current state (e.g., ecologically- or agriculturally-valuable lands), they can assign development credits to the ‘conservation areas’ and promote the bonus development opportunity in the ‘development areas.’ This is usually accomplished through an Area Structure Plan (for a specific area) or a dedicated bylaw (to enable programs generally across the municipality).
TDC programs can be tailored to the specific needs and opportunities of a community, and should speak to the conservation goal the municipality is trying to accomplish. At a minimum, this should be articulated in the Municipal Development Plan.
What are the advantages?
TDC programs offer several advantages, including:
Harnesses the power of increased demand for development and directs it toward matched conservation of natural assets.
Conservation values are protected beyond the next Council, development proposal, or business plan.
Opportunities are equitable for all landowners (financial benefits exist for developing and for conserving)
Cost-effective, as there are no land acquisition costs for the municipality
Easily tailored to a community’s values
What should you watch out for?
No tool is a silver bullet. There are issues for municipalities to watch out for with TDC programs, including:
Resources are needed for on-going program administration to coordinate with overall planning program, record transactions, register restrictive legal instruments on the land title, tracking success, etc.
All planning programs must consider the effect on a TDC program. If a developer can achieve the same or comparable densities by another, simpler, less expensive methods, then they are not likely to contribute to the conservation of valued landscape features.
There must be sufficient pressure for private development capable of driving participation in the program
The receiving area must have a viable development area so development credits have value.
Buy-in from landowners, developers, and the public at large is essential.
A restriction must be registered on title of the sending property, such as a conservation easement, and must specify that the development credit has been removed and sent to another property.
How can it help maintain natural infrastructure?
Ultimately, planners and decision makers are able to use TDC programs both plan for and catalyze (though incentives) a re-distribution of conserved and developed parcels, clustering both appropriately. The result can be a landscape planning regime that can maintain all aspects of the natural infrastructure system – assets, functions, and benefits.
A Practical Guide to Transfer of Development Credits (TDCs) in Alberta - Website was created by Miistakis Institute to help municipalities and others find answers to questions related to TDCs in Alberta.
Conservation and Stewardship Tools- Government of Alberta’s summary information on Transfer of Development Credits and Conservation Easements.
Efficient Use of Land Implementation Tools Compendium – Government of Alberta recognized Efficient Use of Land (EUL) as one of seven strategies to help reach Alberta’s economic, social and environmental goals. This compendium reviews tools and best practices by municipalities in Alberta and elsewhere to help promote efficient use of land. The document includes transfer of development programs, including case studies (p. 91 – 96).
Rocky View County – Rocky View County's Glenbow Ranch Area Structure Plan is built around a TDC program used to implement their conservation design vision for the area.
Municipal District of Bighorn – The M.D of Bighorn implemented a local TDC program in 2007 (called a transfer of subdivision density program) in their Carraig Ridge Area Structure Plan. Lands in the sending area must be placed in a conservation easement when subdivision potential has been transferred.
Beaver Hills Initiative (BHI) - This report reviews the potential for an inter‐jurisdictional Transferable Development Credit (TDC) program to achieve conservation objectives in the Beaver Hills Initiative (BHI) Area.
The City of Vancouver – The City of Vancouver has developed a combination of a transfer of develop credit program and a density bonus program to protect the city’s heritage resources. A developer is incentivized to rehabilitate and legally protect heritage buildings, through increased density at the site, or transfer the density to another site when increased density at the heritage site is not possible.
Smart Preservation - Rick Pruetz is the leading authority on Transfer of Development Credits programs (called Transfer of Development Rights in the U.S.) and maintains a summary of all TDC programs he has researched.
Miistakis Institute – Conservation research charity based at Mount Royal University in Calgary with extensive experience in the application of TDC programs.
Environmental Law Centre – Alberta-based environmental law charity with expertise in municipal envt and conservation tools.
AUMA Municipal Planning Hub - The hub has been developed to provide members with a basic understanding of land use planning in Alberta. The document includes information on Transfer of Development Credits as a conservation tool.
Did we miss something?
If you know of a resource that should be on this list - or your municipality has a sample or case that should be here, please let us know!