Report: Law allowing transfers of development rights doesn't work

JARED PABEN - THE BELLINGHAM HERALD

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Under existing law, developers can transfer development rights from the Lake Whatcom watershed into urban areas north of Bellingham, but a new report from the city says the law hasn't worked.

And a separate Whatcom County report says that if county government expanded the program to include the endangered agricultural lands, it probably wouldn't be successful.

Meanwhile, city planners will soon propose law changes aimed at accomplishing the same thing as the existing "transfer of development rights" law. Instead of transferring rights, they'll sell development rights in urban growth areas and use the money to buy watershed land or development rights.

PROTECTING LAKE WHATCOM, AGRICULTURE
Whatcom County and Bellingham have programs where they spend public money to buy land and development rights, protecting the land from housing construction. These programs buy the rights, and they're different than the "transfer of development rights" programs currently under discussion. In the "transfer" programs, developers and landowners work with each other to purchase rights and transfer them to allow more homes in new housing projects.
Under the "purchase" program:
Whatcom County: Using property tax money and federal government grants, the county buys development rights to protect agricultural land. Through its first five years, it spent $4.1 million to buy 84 development rights and protect 641 acres.
Bellingham: The city has spent more than $18 million to buy about 700 development rights and protect 1,450 acres in the Lake Whatcom watershed. The program uses money from a surcharge on water users' bills.
Read Whatcom County's study on transfer of development rights
Read the City of Bellingham's study on transfer of development rights

The city's goal is to curb development in the watershed that is damaging the quality of Lake Whatcom, drinking water source for the city's residents.

EXISTING LAW

The law currently allows owners of land in the Lake Whatcom watershed to sell the right to build houses to developers, who can then take those rights and build more homes in certain areas of Bellingham's unincorporated urban growth area. But only one developer, Ralph Black, has ever done it, and he said he wouldn't do it again.

According to the city's report, by consultant Property Counselors, the extra development rights don't have much or any value to developers, so they'd have to get a lot of rights for the purchase of one valuable watershed development right, for example.

Inside city limits, the recently annexed King Mountain neighborhood has the biggest single area that's designated for using transferred development rights, city planner Greg Aucutt said. Most of the areas already allow for six homes per acre, which is where the market is, he said.

CAUSES OF PROBLEMS

The transferred rights lack value for the following reasons, according to the Property Counselors' report:

• Developers in Bellingham's urban growth area aren't building as many homes as they are allowed to anyway. A study of 11 housing projects showed they were building only 43 percent of the number of homes zoning outright allows. Black said wetlands and other environmental constraints make it hard to even build as many homes as zoning allows.

• Uncertainty for developers. Black transferred development rights from his own watershed land to land he owned near East Bakerview and Irongate roads. After he signed papers to reduce development potential on his watershed land, he still had to face City Council approval to use the rights as part of the Stonecrest project, and neighbors fought back.

"Most developers are skeptical about the value of TDRs primarily because of uncertainty about exactly how it would work and whether higher density projects could ultimately be approved," the consultant wrote.

"I believe it will not work without fundamental changes," Black said. Developers need to be able to use the transferred rights if they meet certain predetermined conditions, not based on public opinion and the council's approval.

AG LAND PROTECTIONS

Whatcom County is considering allowing transfers from agricultural lands to help meet its goal of preserving at least 100,000 acres of agricultural land, according to a new report by county planners.

But the chances of it working are low for many reasons, including that the value of development rights to developers is so low.

Also, developers may be able to develop more densely under law by doing things like providing affordable housing, child-care facilities or open space, according to the report.

CITY PLANS CHANGES

The city's report recommended setting up a program because, while it might not be used in the next decade, it could become useful later when developable land becomes rarer.

In April, city planners expect to bring the Planning Commission a draft new law that would allow developers to buy outright from the city the right to build more housing or larger buildings in certain areas, Aucutt said. Prices would be set by the council.

The city would then take that money and buy land or development rights in the watershed, he said.