If proposed changes to the State legislation (144^th General Assembly, House Bill 244) and the New Castle County Unified Development Code (UDC) are passed, are other existing conditions/factors conducive to the development of a successful transfer of development rights (TDR) program in New Castle County, Delaware?

Simply described, transfer of development rights is a local land management program that authorizes landowners to sell unused development rights from farmland or open space in "sending areas" to be transferred to other private lands called "receiving areas". Sending areas are the locations protected from development and receiving areas are the locations where development is usually permitted to occur at a higher density. There has been a voluntary program under the New Castle County UDC since 1997; however, the TDR program has not been successful. In the past decade, only one or two farm parcels have been protected using TDRs.

It is being proposed that the Delaware General Assembly consider a bill to better enable TDR’s by allowing transfers between local government agencies, transfers between planning districts, the development of a TDR banking programs, and a complex structure of bond funding for infrastructure in areas receiving higher density development. New Castle County Council is looking at land use code changes to make TDR density bonuses a by-right option for development and potentially make TDRs mandatory in defined overlay areas of the growth zone.

The primary unit of analysis will be the TDR process within the constraints and opportunities presented by various factors in New Castle County, Delaware. For this process, success will be defined by the acreage of land protected per year and the acres effectively upgraded to urban density. It is hypothesized that the acreage protected is influenced by numerous factors and not simply the State Law and/or County Code and that of these other factors; downzoning is a critical determinant of TDR success due to its direct affect on market forces and public acceptance of the tradeoff of some increased density for protected land.

The acreage protected and factors that affect the success of a TDR process are the study variables and should be measured annually for 5 years or longer. At a minimum, these would include the following:

• Acres of land protected by TDRs
• Acres upgraded to urban density
• Zoning Classification and Area of Each
• Housing Units
• Housing Lots Approved or Pending
• Real Estate Market Conditions
• Infrastructure Capacity/Adequacy
• Public Support for TDR Program

Each of these variables, their relevancy to the study, and the manner in which they would be operationalized are described below.

"Acres protected" is a simple measurement of the actual acres of land protected by a TDR. It can be readily collected from County records, contracts and/or deed covenants for each property included in the program. It is a critical variable that provides a highly accurate and valid number that can be used to quantify the success or failure of the TDR program as defined in this study. For the purpose of this study, 0- 49 acres per year would be a failure, 50-99 acres per year would be an unsuccessful program, 100-149 acres per year would be modestly successful, 150-199 acres per year would be successful, and 200 acres or more per year would be highly successful. However, this variable is limited in that it cannot determine why the program was successful or a failure. It is a dependent variable that is likely influenced by a number of other independent variables that can help explain why the TDR is or is not a successful program.

"Acres upgraded to urban density" – This will be a measurement of the extent to which more concentrated growth occurs. It will help directly measure the receiving area impact on the landscape. It is assumed that if some increase in density of housing occurs, less land will be developed in a given time frame. Urban densities will be defined using the following scale: 0 to 1 dwelling unit/acres is very low, greater than 1 to 3 dwelling unit/acres is low, greater than 3 to 9 dwelling unit/acres is medium, and greater than 9 dwelling unit/acres is high. These are also a measure of infrastructure use efficiency.

"Zoning" is an independent variable. It has numerous classifications that allow different densities of development. Each of these attributes also has total acreage associated with them. They also can be further attributed as a sub-variable for land that is developed or undeveloped by zoning class in order to determine the supply of land available for either TDR receiving areas or TDR sending areas. These variables are useful for determining the supply and demand ratio that affects the market prices for land in NCC. It also provides an indication, especially when correlated with other variables like "market conditions", as to whether or not developers are able to get the density they desire without TDRs. Without a balance of supply and demand, the real estate market will not support a successful TDR program even with State and County legislative intervention.

"Housing" is another independent variable. This variable is the number of housing units built per year. The data or projections can be obtained from the Delaware Population Consortium. Some data is also available from the Delaware Housing Authority. Certificates of Occupancies issued by City and County agencies can also be used as an accurate attribute of new housing. The attributes should be the number of housing units. Based on this variable, you can gain an understanding of the past, current and projected demand for housing which affects the supply and demand balance for TDRs.

"Housing Lots" is another independent variable. This variable would have attributes for the number of approved development lots and the number of pending development lots. It can be used to determine the supply of building lots. If there is excess when compared to the projected need, it could limit TDR success. If there is a limited supply, it could promote more use of TDRs.

"Market Conditions" are an assessment of the current real estate housing market. It would need to be attributed with the types of housing and the price by planning districts (or some other geographic subdivision) in New Castle County. This is important, as TDRs require density increases and usually result in more compact development with higher numbers of town homes than low-density suburban single family homes. If the market is strong for low-density suburban homes on larger lots, and low for town homes, it may limit TDR success, making it another independent variable of "acres protected".

"Infrastructure Capacity" is also an independent variable of "acres protected". It is vital that infrastructure capacity exists to service the increased density in TDR receiving areas. Without it, the areas cannot be developed. The attributes of this variable that would be a quantification of the sewer, water, road, and school capacity. They would be recorded as the number of housing units for which capacity exists.

"Public Support" is also an important independent variable affecting "acres protected". A factor influencing the use of TDRs in the development process is the real or perceived support or opposition from the public. Data for this variable would be collected from a survey of a statistically valid random sample of county residents. Questions would provide attribute data measuring their level of support for TDRs including land protection aspects in the sending areas as well as their acceptance of increased housing density in the receiving areas. Some questions would also be used to determine their relative level of support based on proximity to where they live.

All variables can be statistically analyzed to determine causality of program response using a combination of analytical techniques such as exploratory factor analysis, correlation of independent variables with dependent variable and other analysis to evaluate causality using off the shelf SPSS statistical analysis software. This will also include calibration and validation analysis for confidence levels.

This study and monitoring plan should be conducted as part of any TDR program implemented in order to provide a framework for program development efforts and to evaluate the performance of the program. This will provide a detailed assessment of the success or failure of the program. More importantly, by tracking the numerous independent factors affecting the market and TDR program, they can more definitively quantify the success and failure of the legislative policies enacted. This will provide quantitative descriptions of the relative contribution of each factor based on statistical regression analysis. It will provide detailed and defensible data and information to guide future policy changes.

In short, a quantitative analysis of the performance of the TDR program will provide critical insights that help explain why the TDR program is or is not successful. Such performance monitoring is useful for ensuring accountability for government actions and ensuring that programs are developed and implemented in the best public interest. It also provides future guidance for adaptive management of the program and mid-course corrections for poor performance of Government programs.