Conservation Easements

Development Rights: Purchase

Introduction | Development Rights: Purchase |

Farm and Ranch Land Protection Program (FRPP)

Natural Resources Conservation Service (NRCS) can purchase an easement on farmland that allows participating landowners to keep their land in agriculture, but not to convert the land for nonagricultural use.

  • Only available in counties that allow the purchase of development rights.
  • Farms must have prime, unique, or other productive soil, be privately owned, and large enough to sustain agricultural production.
  • The easement value is the fair market value minus the agricultural value.

Through the locality, the FRPP reimburses the landowner for the easement value. FRPP does not cover legal or other costs. Easement sale proceeds are treated like any other capital gain for federal, state or local income tax purposes. Some programs have provisions that allow for installment purchases or use securable tax-exempt bonds as a method of payment.

Priority is given to applications for perpetual easements, and a minimum of 30 years is required. All enrolled lands must have a conservation plan developed by an NRCS Field Office. This program is subject to annual congressional funding.

Forest Legacy Program (FLP)

In cooperation with the USDA Forest Service, VDOF can purchase development rights on significant forestlands. The VDOF gives priority to land that can be effectively managed for sustainable timber production, important wildlife habitat, or for watershed protection. Long-term costs of easement administration and easement compliance monitoring are a cooperative effort between the VDOF and private nonprofit land trusts. All landowners must have a Forest Stewardship Plan approved by the VDOF.

Purchase Development Rights (PDR)

State or local government purchase development rights from landowners who would rather sell these rights than donate them. These rights can be retired permanently or for a set number of years.

Transferable Development Rights (TDR)

Development rights are separated from a parcel of land and sold to a private party, usually a developer, for use on another property. Rights are generally transferred to an urban region with a high demand for development.

The local government allows this transfer by designating a “sending area” and a “receiving area.” The sending area is generally a rural region from which development rights will be “sent away”. The receiving area is an urbanized region where those development rights are used. Local governments decide where development rights can be sent from and what areas can receive them.

Politically, a TDR program is difficult. Residents of the urban area where the development is top occur may object to “added density” in their neighborhood. The testament to the difficulty in creating a TDR program is the popularity of PDRs and the relatively sparse adoption of TDR programs nationwide. Elected officials and taxpayers would rather pay to purchase development rights and retire them, than to transfer them to communities that don't want development and will oppose the program.

The most obvious advantage of a TDR program is that the private sector, rather than tax dollars, is paying for preservation of the parcel from which the rights are purchased. The obvious disadvantage is that the number of new residential units in the locality is not decreased, just moved. From the perspective of long-term planning, it makes sense to transfer development rights to areas that are already well served by highways, water and sewer.

The flexibility of these programs makes them popular among landowners, and the retirement of development rights gives the greatest protection to the forest land base. However many landowners do not feel comfortable in making these decisions. Local governments often offer incentives and protection to landowners that can resist developing their property in the near future.

Last modified: Thursday, 06-Nov-2014 10:24:38 EST