County Sets Purchase and Retirement Fund Price
The County has accumulated over $4 million in unspent land preservation funds designated to be used for the Purchase and Retirement (PAR) Fund. The program retires (permanently removes) Transferable Development Rights (TDRs) from the market, thereby protecting farmland. On September 24th, the Board of County Commissioners approved purchasing Transferable Development Rights (TDRs) at the rate of $3,037 based on recent developer market purchases.
However, the price was much lower than $5,500 as suggested by the Agricultural Preservation Advisory Board (APAB) or expected by the general farming community. Below is a table the staff provided for what a reasonable cost of a TDR might be and how many TDRs could be purchased with available money.
When TDRs or easements are sold from a property, its residual value is reduced. The Maryland Agricultural Land Preservation Program (MALPF) and the Maryland Rural Legacy Program calculate that loss of value based on appraisals. The table below is for farm easements sold throughout Southern Maryland. That way, land owners can see how preserving their land might affect the equity in their land.
Rather than using comparable data from the state programs or trends from previous years, the Commissioners appeared to rely on the average price paid by developers for TDRs over the last three years. However, the price that developers have been paying have been deflated in part due to a County development moratorium from 2012 to 2017 for a failure to adopt septic area maps required by the state.
Background. Calvert County’s land preservation program was one of the first in the nation and until recently it has been one of the most successful. Being within easy commuting distance of Washington, D.C., Calvert became a mecca for commuters seeking lower taxes, proximity to the Bay, and high quality of life, beginning in the 1960s. However, even back in the early 1970s, Calvert’s citizens were concerned about the resulting loss of rural character and the loss of Calvert’s rural economies (farming, forestry, fisheries, etc.) which today amount to over $100 million per year for the local economy according to a 2018 BEACON Report. That plus the fact that citizens love Calvert’s rural character may explain why 79% of our citizens support protecting most agricultural land from development according to a recent survey.
The County’s land preservation program was not intended to stop growth. Rather, it created a more equitable way to preserve the rural character and rural economies by allowing developers to increase development in one place through the purchase of TDRs from land owners wishing to preserve their lands in prime farm and forest areas. In essence, development paid for preservation.
Following the preparation of the 1997 Comprehensive Plan, which addressed the county’s rapid residential growth, the county took deliberate actions to reduce residential development potential by setting a residential buildout goal of 37,000 households, by downzoning twice, by tightening the adequate public facilities ordinance, and by buying and retiring development rights (e.g. the PAR Fund) from rural lands. The goal was to buy half of the development rights over time while preserving a total of 40,000 acres. To fund the Program, the County increased the recordation tax and dedicated funds to that purpose. It worked.
After the turn of the century, the land preservation programs and growth control measures were working very well. Along with our state land preservation programs, the County was preserving well over 1,000 acres a year and residential growth rate gradually slowed down toward the state average.
Then came the Great Recession in 2007. Residential development crawled to a halt, putting a near stop of developer purchases of TDRs. Facing revenue shortages, the County moved the funds from the recordation tax increase for land preservation back into the general fund. Even though the economy has improved, annual County support for land preservation has not returned to the previous level. The defacto moratorium from 2012 to 2017 put further downward pressure on the value of TDRs.
As a result land owners with their farms in the County land preservation program have not had an outlet for sale of their TDRs. New Agricultural Preservation Districts have been put on hold and some owners feel betrayed by the County’s redirection of land preservation funds, a drop in overall funding support, and the County failure to even buy and retire TDRs some years. To see the full PAR Fund Presentation from September 17, click here.
To conclude, Sustainable Calvert Network is pleased that the County has finally re-started the PAR Program. However, there is the hope that it will at some point reconsider the price offered. Some owners of TDRs may feel that they are so pressed for funds that they have to sell at $3,037. However, they won’t have to look too far to find that their development value has been priced far below that of neighboring counties.