Herd Report #3: Draft Version
August 14, 2002

This report is referred to as Task 3 in the consultants scope of work for conducting a series of analyses to support the Countys preparation of its new Comprehensive Plan.

The purpose of Task 3 is to review and evaluate a range of potential tools that are available to the County to conserve open land, including forest and farmland resources. Below is an outline of the contents of this report.

Executive Summary [forthcoming]

1. Introduction
   1. Purpose and Scope of the Task
   2. Approach to the Research and Analysis
2. Review of Available Techniques Examined
   1. Use Value Assessment
   2. Agricultural and Forestal Districts (AFD)
   3. Acquisition of Conservation Easements
   4. Rural Economic Development Initiatives
   5. Zoning and Subdivision Regulations
   6. Urban Growth Boundaries / Urban Service Areas
   7. Special Service Districts
   8. Community Development Authorities
3. Preliminary Recommendations for Montgomery County [forthcoming]

Appendix

1. Montgomery County Agricultural and Forestal District Ordinance [forthcoming]
   
2. Excerpts from Virginia Agricultural and Forestal District Act [forthcoming]
   
3. Sample Conservation Easement [forthcoming]
   
4. Excerpts from Virginia Code provisions for Special Service Districts and Community Development Authorities [forthcoming]
   

Glossary

[Forthcoming]

1. Purpose and Scope of the Task

The purpose of this report is to review and evaluate a range of potential tools that are available to the County to conserve open land. The report focuses on public programs that the County can implement on its own, but some attention is also given to private techniques that the County may wish to promote among landowners, as well as state and federal programs which the County could pursue.

The scope of this report is limited to those tools which are clearly available to the County under the constraints of state enabling legislation. The major categories of land conservation techniques are:

•Incentives (such as use value taxation, agricultural districts, state and federal programs)
•Investments (such as fee simple land purchase or easement acquisition)
•Regulations (such as zoning and subdivision controls)

The authority for such County efforts is granted by the state primarily through the powers of planning and zoning contained in Chapter 15.2 of the Code of Virginia. The power for some of the tools (easement acquisition, special service districts) is provided for in other sections of the Code; but all of the Countys authority for land conservation comes from the state.

[add more information on the powers granted to the locality to conserve land if necessary]

2. Approach to the Research and Analysis

a. Other Jurisdictions Studied

In conducting the analysis for this report, the consultants examined a range of efforts made by other jurisdictions in Virginia and other states, with a special focus on the land conservation efforts and experiences of four localities:

•Albemarle County
•Augusta County
•Fauquier County
•Loudoun County

These localities were chosen in part because they have some features in common with Montgomery County ( agricultural and forestal resources/economy, population size, development/growth pressures), and in part because they have some experience with a variety of the tools that are available under the state code.

Note, however, that other localities were also cited if needed as examples of specific tools, i.e. Stafford County (Community Development Authorities), Virginia Beach (Purchase of Conservation Easements/Development Rights).

Albemarle County, a jurisdiction of 740 square miles or 474,000 acres, is located approximately 100 miles northeast of Montgomery County and surrounds the City of Charlottesville. The Countys population in 2000 was 79,236, reflecting an increase of 16% over its 1990 population level of 68,172. [add ag data]

Augusta County, a jurisdiction of 969 square miles or 620,000 acres, is the second largest county in the state in terms of land area. It is only 70 miles to the north of Montgomery County. The Countys 2000 population was 65,615 , a 20% increase over the 1990 population of 54,677. Augusta has only two incorporated towns (Grottoes, which is shares with Rockingham County, and Craigsville), but its surrounds the historic cities of Waynesboro and Staunton. [add ag data]

Fauquier County, a jurisdiction of 600 square miles or 442,000 acres, is located approximately 45 miles southwest of Washington, D.C. The Countys 2000 population was 55,139, which represented a 12.9% increase over its 1990 population level. In spite of its relative proximity to the employment centers of the DC Metropolitan area, only approximately 2% of the county is currently developed in urban uses. The Town of Warrenton, the county seat, is the largest urban center in the county, with a 2000 population of 4,830. The countys only other incorporated towns -- The Plains and Remington -- have populations of less than 500 each.
Fauquier County is strongly committed to preserving its rural lands and its healthy agricultural economy. The $47.5 million value of Fauquiers agricultural products ranked it 10th in the Commonwealth according to the 1997 United States Department of Agriculture (USDA) Census of Agriculture, with a total of 957 farms and 239,034 acres in farming. Other USDA statistics show Fauquier ranked 4th in Virginia in the production of all cattle and calves, 5th in the production of corn for silage, and 6th in the production of all hays.
The county is employing a variety of techniques in its efforts to preserve rural lands. These include sliding scale zoning; agricultural, forestal and open space districts; use value assessment; an Agricultural Development Office with various programs supporting county farmers and agricultural tourism; an Agricultural Advisory Committee (AAC) advising the Board of Supervisors on agricultural matters; and the use of public utility service districts to channel growth to desired areas. The county is also currently initiating a purchase of development rights program.

Loudoun County, with a 2000 population of 169,599, is the second fastest growing jurisdiction in the nation. Its population increase of 96.8% between 1990 and 2000 represented growth of 83,414 people, almost as many new people as the 83,629 total people living in Montgomery County in 2000. The countys approximately 517 square miles include a developing eastern half and a still rural western half, split by U.S. Route 15 from north to south. Residential development is concentrated in several large planned communities to the north and south of Dulles International Airport in the eastern half of the county and within Leesburg, the countys largest town and county seat. Commercial and employment uses have clustered along Route 28 in the vicinity of the airport.

In spite of its tremendous urban growth rate, Loudoun County maintains a healthy agricultural economy. As of 1997, the USDA ranked the county 20th overall in the value of its agricultural products, with almost $26 million being produced from 184,988 acres on 1,032 farms. The county also ranked 3rd in the production of hays other than alfalfa in 2000, 4th in all hays and, as of January 1, 2001, 10th in the production of beef cattle. Loudoun also has the largest equine population in the state with 20,000 horses.

There has been concern for many years in Loudoun County about the increasing pace of farmland conversion. The A-3 zoning that covers the countys rural western half, which allows one house per three acres, was established in 1959 to allow farmers to break off individual home sites for children or to raise capital. Over the years, however, the demand for rural residential lots and the decline of traditional farming has resulted in entire farms being subdivided into three-acre lot developments.

The County has tried a variety of policies to preserve farmland without changing the underlying A-3 zoning, but these efforts have largely failed. Rural residential development has accelerated rapidly in recent years. Between 1993 and 2000, the County received applications to rezone or subdivide more than 26,600 acres for more than 3,400 dwelling units in the countys rural area. According to the Countys General Plan, if the conversion of rural land to residential uses were to continue at its recent pace, almost half of the rural area (100,000 acres) would be in residential use by 2020.¹

The County has also been concerned about the loss of open space and historic resources in its suburbanizing eastern half. While large planned communities have included a certain percentage of open space and recreational facilities for their residents, there has been no coordinated effort to connect open space corridors or to preserve sensitive environmental and historic resources. As a result of the farmland and open space issues facing the county, Loudoun has chosen to adopt an open space preservation strategy that targets both farmland preservation and the preservation of its Green Infrastructure sensitive environmental and historic resources throughout the county.


b. Brief Description of the Tools Evaluated and Why They Were Selected

This report examines seven major tools for land conservation, some of which have several sub-components. These tools, and the reasons they were studied, are as follows:

Use Value Assessment.

This is a long-standing program used by most rural localities in Virginia and widely used by local governments in many other states. It is sometimes called land use. It allows farmland to be taxed at its use value for farming rather than at its market value for development or other more intensive uses. This typically provides for a lower local real property tax payment by the farmland owner.

This tool is included in this report because it is a widely used in Virginia and other states, is voluntary, and is a well-accepted program.

Agricultural and Forestal Districts (AFD)

Agricultural and Forestal Districts were established as local tools in the late 1970s by the General Assembly. Local governments are allowed to establish such districts at the request of farmland owners, who are in turn given several benefits, including the assurance that Use Value Assessment will continue to be available to them and protection from local nuisance ordinances.

This tool is included in this report because it is a widely used in Virginia and other states, is voluntary, and is a well-accepted program.

Acquisition of Conservation Easements.

Conservation easements are interests in the ownership of property that typically limit the amount and/or type of development that can occur on a given piece of property. Easements can be purchased in perpetuity, rented or leased for a given period of time, or donated by the landowner (with potential tax benefits to the donor).

Conservation easements are a part of this report because they are voluntary and very effective, particularly where they run in perpetuity.

Rural Economic Development Initiatives.

Economic Development is normally associated with industrial and commercial enterprise efforts, but the basic approach can also be applied to the agricultural and forest industries. Such efforts can include agri-tourism and eco-tourism, development and promotion of alternative and/or local markets and the development of alternative products or production techniques.

Rural Economic Development Initiatives are a part of this report because they are voluntary and address the fundamental benefit of making open space land uses more economically competitive with more intensive uses in order to achieve long term conservation.

Zoning and Subdivision Regulations.

Zoning and Subdivision regulations are widely known and understood, and are used by many localities throughout Virginia and other states. Regulations aimed at open land conservation include Large Lot Zoning, Sliding Scale Zoning (which Montgomery County recently adopted), and Rural Cluster Zoning. Also discussed herein are a variety of subdivision regulations aimed at minimizing the impact of rural residential development on agricultural activities.

Zoning and Subdivision techniques are a part of this report because they are available, well known, widely used, and potentially effective in the short to medium term time frame.

Urban Growth Boundaries / Urban Service Areas

The local Comprehensive Plan in Virginia can include a variety of growth management tools aimed at guiding the location and pattern of development. Among the commonly used techniques is the Urban Growth Boundary, or Urban Service Area. This refers to the designation in the Comprehensive Plan of a specific area which is planned to be served with public utilities, services and facilities during the time frame of the plan.

This tool is a part of this report because while its emphasis is on guiding the location of urban development, if it is successful it will tend to help relieve the pressure for converting rural and open space lands to intensive uses.

Special Service Districts and Community Development Authorities

Special Service Districts and Community Development Authorities are entities which a locality may establish in order to provide a higher level of public service, funded by an incremental additional real property tax on landowners in the district.

Special Service Districts allow for some of the costs and benefits of development to be concentrated among the landowners in a particular sub-area, thereby reinforcing a strong growth management plan.

Community Development Authorities allow for the provision of higher levels of various public facilities and services, including the funding and acquisition of open space conservation easements.

These tools are part of this report because they offer significant potential benefit in implementing growth management policies and by providing a local funding mechanism for acquiring conservation easements on open space lands and other related land preservation efforts.

1. Use Value Assessment

a. Main Purpose and How It Works

Use Value Assessment (commonly called land use) is a state guided program available to localities in which the locality can tax farmland and open space land at its use value rather than its fair market value. In most rapidly growing jurisdictions, this typically reduces the real estate tax on the land by a significant amount, thus reducing the overall costs of a farming business.

The program is administered by the Commissioner of the Revenue, is voluntary to the landowner and is renewed annually by application from the landowner. To qualify for agricultural or horticultural use, the parcel must be a minimum of five acres and have at least a five-year farming history. The property owner must also certify that the real estate is being used in a bona fide program of management and production of field crops, livestock, livestock products, poultry, poultry products, dairy, dairy products, aquaculture products, or horticulture products for sale. Horticulture production includes nursery, greenhouse, cut flowers, plant material, orchards, vineyards and small fruit products. Gross sales/receipts must average more than $1,000 annually. Upon conversion of the land to another more intensive use, a rollback of a portion of the tax benefits received is refunded to the locality.

c. Other localities that have used it and with what success

Use Value is used in nearly every state in the nation and in most counties in Virginia. However, it has not been proven effective over the long term in stopping or inhibiting sprawl development and farmland conversion in localities that are under great market pressure for suburban development. It is a good and important tool, but a relatively weak one.

In Northern Virginia, both Loudoun and Fauquier Counties have adopted use value assessment for farmland, and both jurisdictions believe that this differential assessment program is vital to their farmland preservation efforts. Nevertheless, both jurisdictions face sporadic criticisms from the non-farm public about perceived unfair tax breaks to farm landowners.

A 1998/99 Fauquier County Farmland Study found that while nearly 90 percent of landowners surveyed wish to preserve their land for future agricultural purposes, many would have to quit farming if the land use assessment program were abolished. The survey quoted farmers concerned about citizens who complain about the unfairness of the land use tax and concluded that educating the non-farm public about the benefits of land use taxation is a necessity to ensure continued support for the program by the public and the Board of Supervisors.²

Loudoun's Use Value Tax Program, established in 1973, generally follows State enabling legislation, but excludes certain categories of use potentially eligible for the land use assessment program under state enabling legislation, including woodlands, stream valleys, meadowland, and water quality. Loudoun Countys recent rural economic development report, The 200,000-Acre Solution, recommended that these uses be added to the countys program. The report also recommended two modifications to the program. First would be to expand the roll-back period for taxes upon conversion from eligible use, with lesser roll-back periods for uses that preserve some open space and/or develop at a lower density than permitted by right. This would require a change in State enabling legislation. Second, the report recommended a reduction in Loudouns current Use Value Tax Program rates in order to enhance the profitability of agriculture. The report asserted that Use Value Tax relief is a key factor in allowing the continuation of agricultural operations in Loudoun County.^*

The Loudoun County Revised General Plan supported the Rural Economic Development Task Forces recommendations, suggesting that the county consider amendments to the Use Value Taxation Program that may include the addition of the following:

a. Woodlands, stream valleys, meadowland, floodways, and wetlands and the other natural areas as qualifying uses for reduced real property tax rates;
b. The elimination of roll-back real property taxes on the part of a cluster development that remains in a qualifying land use;
c. The dedication of roll-back real property taxes to the county Purchase of Development Rights program;
d. Allow land used for equine operations as a qualifying use for a lowered real property tax rate, regardless of whether or not it produces a product for sale;
e. A reduction in land use-related tax rates;
f. A reduction in the roll-back period, if the change in land use involves a cluster development or a rural commercial use, and significant open land is preserved;
g. An increase in roll-back period for standard development that does not save open land; and
h. Making farm-worker tenant dwelling land eligible for the Use Value Assessment program if it meets the Uniform Statewide Building Code.³

In December 1999 Loudoun added a sliding scale option to its land use assessment program (not to be confused with Sliding Scale Zoning discussed later in this report) that provides the opportunity for additional deferral of taxes as an incentive for landowners to keep their property in an eligible use for a longer period of time. This deferral of additional taxes requires a recorded commitment by the landowner to keep the property in a qualifying use for a term of years according to the following scale:
á A commitment to hold the property in its qualifying use for more than ten (10) years, but not exceeding twenty (20) years, ninety-nine percent (99%) of the use value taxes otherwise assessed may be deferred for the term of the commitment.
á A commitment to hold the property in its qualifying use for more than five (5) years, but not exceeding ten (10) years, fifty percent (50%) of the use value taxes otherwise assessed may be deferred for the term of the commitment.
The additional deferral applies to qualifying land and does not include ineligible land or buildings assessed at fair market value. The normal five-year roll-back provision is modified for properties participating in the sliding scale option. For these properties, the rollback includes the current tax year plus (a) the previous five tax years OR (b) each year from the date the sliding scale agreement was signed, whichever is greater.

Note that this proposed sliding scale option for Use Value has similarities to the concept of Leasing Development Rights (LDR) discussed later in this report.

d. Summary of pros and cons

Advantages of Use Value Assessment

1) voluntary program

2) provides financial benefit to farmland owners by limiting local property assessment to the actual use value of the land rather than its fair market value for development.

3) few restrictions on the landowner and fairly modest eligibility requirements.

4) well known and accepted program in Virginia.

Disadvantages of Use Value Assessment

1) temporary solution - use value enrollments last only one year.

2) lack of local control - Use Value Assessment is a state-based program and thus the locality has only limited flexibility in designing and administering the provisions.

3) potential for criticism that the program serves as a tax-break for wealthy landowners and land speculators until such time as they choose to develop the land.


2. Agricultural and Forestal Districts (AFD)

a. Main Purpose

§15.2-4300 of the Code of Virginia sets forth the provisions for AFDs. It states that the purpose is to …conserve and protect and to encourage the development and improvement of the commonwealths agricultural and forestal lands for the production of food and other agricultural and forestal products… and to conserve and protect agricultural and forestal lands as valued natural and ecological resources which provide essential open space for clean air sheds, watershed protection, wildlife habitat, as well as for aesthetic purposes.

The law was enacted by the General Assembly in 1977 with major amendments in 1987. It grants local governments the authority to adopt local ordinances that permit agricultural and forestal districts within the locality.

Agricultural and Forestal Districts are designated areas that are given various protections in order to encourage and facilitate the continuance of agricultural and forest production. Such districts are formed voluntarily by landowners, and applications are reviewed and approved by the local governing body in accord with state guidelines as set forth in the Code of Virginia. Twenty-four Virginia counties currently have Agricultural/Forestal districts.

b. How It Works

One or more landowners assembles an application to form a District and submits it to the local governing body. The landowners may seek a term of from 4 to 10 years in duration (which can be subsequently renewed if owners desire and the governing body approves).

The district must have a core of contiguous properties consisting of at least 200 acres. Outlying parcels can be included in the district as long as they are within one mile of the boundary of the 200-acre core or contiguous to district land that is within one mile of the core. There is no minimum acreage for each landowner, no minimum number of landowners (one parcel can be a district), and no maximum acreage for the district.

Landowners can withdraw or add land to the district any time during either the application or the review process. Heirs can withdraw land within two years of the death of the landowner. In addition, for "good and reasonable cause," an owner can petition the governing body for permission to withdraw land. The governing body may establish criteria for addressing such petitions at the time the district is approved. An appeals process is provided.

Landowners applying for a district must provide a description and map of the district, total acreage, acreage and signature of each landowner, proposed conditions, and proposed review period / term of duration. The application is reviewed by the county's Agricultural District Advisory Committee (appointed by the governing body), the Planning Commission, the governing body and the public at a public hearing. The governing body must act on the application within 180 days.

Typically, landowners agree not to subdivide their land to a more intensive non-agricultural use during the term of the district (with the exception of family divisions). The government agrees to provide various protections from non-agricultural interference and development pressure. Some districts request additional limitations on development such as larger minimum lot sizes for the duration of the district.

The effects of the district, as provided in the Code, are as follows:

•Land lying within a district and used in agricultural or forestal production shall automatically qualify for an agricultural or forestal use-value assessment if the requirements for such assessment are satisfied, whether or not a local use-value ordinance has been adopted.

•No local government shall exercise any of its powers to enact local laws or ordinances within a district in a manner which would unreasonably restrict or regulate farm structures or farming and forestry practices in contravention of the purposes of AFD chapter unless such restrictions or regulations bear a direct relationship to public health and safety.

•Local ordinances, comprehensive plans, land use planning decisions, administrative decisions and procedures affecting parcels of land adjacent to any district shall take into account the existence of such district and the purposes of this chapter.

•It shall be the policy of all agencies of the Commonwealth to encourage the maintenance of farming and forestry in (AFD) districts and all administrative regulations and procedures of such agencies shall be modified to this end insofar as is consistent with the promotion of public health and safety and with the provisions of any federal statutes, standards, criteria, rules, regulations, or policies, and any other requirements of federal agencies, including provisions applicable only to obtaining federal grants, loans or other funding.

•No special district for sewer, water or electricity or for nonfarm or nonforest drainage may impose benefit assessments or special tax levies on the basis of frontage, acreage or value on land used for primarily agricultural or forestal production within a district, except a lot not exceeding one-half acre surrounding any dwelling or nonfarm structure located on such land. However, such benefit assessment or special ad valorem levies may continue if imposed prior to the formation of the district.


c. Other localities that have used it and with what success

Agricultural and Forestal Districts have become a popular tool in Virginia, as well as in several other states, particularly in the eastern half of the U. S.

The following tables show the activity among local governments in Virginia. The first table shows the number and acreage in Ag Districts by locality in order of total number of acres. The next table lists data in alphabetical order of the localities.

Number and Acres of Agricultural and Forestal Districts in Virginia
Listed by Acreage in Each Jurisdiction
as of February 25, 2002
(number of acres rounded down to nearest acre)

Source: Virginia Department Of Agricultural And Consumer Services

County/City Total Districts Total Acres

Accomack 22 86,661
Fauquier 12 85,670
Albemarle 21 69,501
Loudoun 24 62,964
Culpeper County 12 52,412
Shenandoah 20 43,428
Montgomery 12 41,222
New Kent 37 31,415
Clarke 2 28,286
Isle Of Wight 4 27,845
James City County 17 20,346
Rappahannock 9 18,073
Louisa 13 17,880
Fluvanna 11 16,741
Rockingham 5 15,600
Augusta 3 15,577
Greene 7 15,298
Frederick 1 15,013
Hanover 8 14,115
Wythe 3 8,737
Northampton 14 8,082
Powhatan 9 7,526
Tazewell 1 7,362
Warren 1 6,089
Prince William 2 3,466
Fairfax County 30 3,232
Staunton City 4 2,823
Orange 1 668

Total 305 726,045

Number and Acres of Agricultural and Forestal Districts in Virginia
Listed in Alphabetical Order by Jurisdiction
as of February 25, 2000
(number of acres rounded down to nearest acre)

Source: Virginia Department Of Agricultural And Consumer Services

County/City Total Districts Total Acres

Accomack 22 86,661
Albemarle* 24 64,531
Augusta 3 15,577
Clarke 2 28,286
Culpeper County 12 52,412
Fairfax County 30 3,232
Fauquier 12 85,670
Fluvanna 11 16,741
Frederick 1 15,013
Greene 7 15,298
Hanover 8 14,115
Isle Of Wight 4 27,845
James City County 17 20,346
Loudoun 24 62,964
Louisa 13 17,880
Montgomery 12 41,222
New Kent 37 31,415
Northampton 14 8,082
Orange 1 668
Powhatan 9 7,526
Prince William 2 3,466
Rappahannock 9 18,073
Rockingham 5 15,600
Shenandoah 20 43,428
Staunton City 4 2,823
Tazewell 1 7,362
Warren 1 6,089
Wythe 3 8,737

Total 305 721,000**

*Through July 16, 2000
**Rounded

Albemarle County. Albemarle County is one of the leading counties in the state in terms of number and extent of AFDs. It has 24 districts totaling over 64,500 (as of the July 16, 2000). The considers the AFD program an important but not a sufficient tool for agricultural and farmland preservation, and thus it is pursuing a range of other related policies and programs, discussed elsewhere in this report.

Augusta County. Augusta County is one of the leading agricultural counties in the state in terms of economic productivity of the farm sector. It has three AFDs totaling about 15,000 acres. When compared to the Albemarle, Fauquier and Loudoun, Augusta has a relatively low number acres in AFDs in relation to the total number of acres of land in farms and the size of the Countys agricultural economy. However, this may be due to the relatively lower pressure for land conversion on farms in Augusta when compared to the other three counties.

Fauquier County. Fauquier County has a long-standing program of agricultural, forestal and open space districts. The county accepts land in forestal, open space, and agricultural or horticultural uses. To qualify for forestal use, the parcel must be at least 20 acres and the owner must certify that the land is being used in a planned program of timber management and soil conservation practices through submission of a signed agreement and a professional forestry management plan for the property.

To qualify for open space use, the parcel must be at least 25 acres and must either be 1) within an agricultural and forestal district; 2) subject to a recorded perpetual conservation easement held by a public body; or 3) subject to a recorded agreement with the county restricting the use of the property to compatible open space uses and prohibiting the propertys subdivision during the term of the agreement. The open-space use of the property must be consistent with the land uses, natural resources conservation or historic preservation objectives, goals or standards of the county land use plan.

Loudoun County. Loudoun County has 24 agricultural districts covering approximately 62,000 acres. These districts continue to grow, with over 1400 acres added in the last fiscal year alone. The goal of the Loudoun Agricultural District Program is to promote the preservation of agricultural land and open space by restricting subdivision densities for a termed period. Qualifying criteria are similar to those of Fauquier County, but there is no minimum acreage to participate. The term of the districts ranges from 4 to 10 years. Participants commit to maintaining a qualified use of the property and to limiting subdivision during the term of the district to agriculturally-related lots of between 10 and 50 acres, depending on the district.

d. Summary of pros and cons

Agricultural and Forestal Districts have several key strengths and weaknesses. Some features may be considered both a strength and a weakness depending upon the point of view taken.



Advantages of Agricultural and Forestal Districts

From the landowner's point of view, the district provides

1) assurance that use value taxation will continue for the property if it already qualifies for that program.

2) protection from nuisance ordinances that could limit customary farming practices, such as manure spreading or prescribed burning.

3) greater confidence that agriculture will be maintained in the area for the duration of the district.

4) assurance that the district will be taken into account in local planning decisions, such as rezonings.

5) limitations on government acquisition of land or special assessments for public utilities.

6) limitations on state policies and spending as they affect the district.

From the government's perspective, districts serve the public good by helping to maintain the rural character of the community, protecting productive agricultural and forest land, and contributing to the preservation of water supply and other natural resources. In addition, such districts are voluntary, which helps create a more positive and less adversarial approach to land conservation.

Disadvantages of Agricultural and Forestal Districts

1) voluntary - although the voluntary aspect of the program is an advantage, it is also a disadvantage in that the districts may not be as extensive or as restrictive as needed to fully protect farmland from development in the long term.

2) temporary - districts last from 4 to 10 years before they are reexamined for renewal.

3) withdrawals - although technically the local governing body must approve any request to withdrawal from a district, it is politically difficult to turn down any claim of hardship by a landowner.

4) lack of local control - AFDs are a state program and thus the locality has only limited flexibility in designing and administering the provisions.



3. Acquisition of Conservation Easements

a. Purchase of Conservation Easements (Purchase of Development Rights)

1) Main Purpose

Programs for Purchasing Conservation Easements (commonly called Purchase of Development Rights or PDR programs) involve public acquisition of conservation easements on open land that will permanently protect it from development, effectively retiring the right to develop the property by buying that right from the landowner. Priorities are typically farmland but may also include environmentally sensitive areas, recreational lands and other open space resources.

Virginia Counties have the legislative authority to enact a PDR program. The City of Virginia Beach pioneered the PDR concept in Virginia, with Albemarle County and Loudoun County subsequently enacting their own version of the concept. Other Virginia localities are examining PDR. Examples are discussed below.

A PDR program could serve several purposes:

reinforce an urban growth boundary by preserving undeveloped land at the outer edge of the growth area

preserve farm and forest land resources through conservation easements

protect environmental quality by keeping significant amounts of land undeveloped

create a permanent reserve of land for potential future open space uses

reduce the total amount of potential dwellings in the rural areas and thus the potential costs associated with providing those dwellings with public services

2) How It Works

Summary of the Concept

PDR is a voluntary program whereby a County buys the development rights from farm and forest land in designated areas. Development Rights refer to a conservation easement that limits the landowner to only specified rights to the property (access, minerals, agriculture, very low-density development such as one dwelling per 50 or 100 acres.) The underlying remaining fee simple ownership of the land remains in the hands of the landowner, but the number of houses that can be built on that land is greatly reduced or eliminated in return for compensation from the County.

After the development rights are purchased from a property, a permanent conservation easement is placed on the land and held by the County and/or a qualified third party. The land remains in private ownership. Typically, the easement permits continued agricultural or recreational activities but does not provide for public access unless the landowner wishes.

The value or cost of such an easement depends on many factors, but it basically amounts to that portion of the market land value that is due to value that could be gained from developing the land with houses. Therefore, the landowner is essentially being paid for the potential development of his property without having to actually develop it.

Typically, a County would allocate a fixed amount of money annually for purchasing easements and take bids or offers from landowners to sell their easements (development rights) to the County.

The County would typically establish criteria for choosing among the bidders, up to the amount of money available annually.

Examples in Virginia

Loudoun County. The Loudoun County Board of Supervisors approved a PDR Program in 2001, and allocated $8.4 million from the General Fund for purchases during the FY 03 and FY 04 fiscal years. The Loudoun PDR Program originated from a recommendation of the Rural Economic Development Task Force in its November 1998 report, The 200,000-Acre Solution: Supporting and Enhancing a Rural Economy for Loudouns 21st Century. The program operates under guidelines recommended by a PDR Design Subcommittee composed of members of the Rural Economic Development Task Force, as well as the county Open Space Advisory Committee, Agricultural Advisory Committee, citizens and town representatives.

The Loudoun Program differs from many PDR programs in that it targets two categories of open space: farmland and Non-agricultural resources. The latter category includes natural, historic and scenic resources, which may be found not just in agricultural areas, but throughout the county. Sixty percent of funds are to be allocated to purchases within the farmland category, and forty percent to the nonagricultural resources category. The program is voluntary, purchasing development rights from property owners who choose to apply to participate in the program.

A property ranking system assigns properties that have been submitted for consideration a score based upon criteria established for each of the two funding categories.

Criteria for the farmland category include:

1) proximity to protected property or within an agricultural district;
2) availability of surface water;
3) type of soil;
4) size of parcel (minimum 25 acres required to earn points);
5) percent of farm to be placed under easement;
6) percent of property in active cropland, pastureland or woodland uses;
7) existence of farm infrastructure;
8) estimated lot size if subdivided (based on zoning and soils);
9) availability of other funds to leverage purchase; and
10) purchase price is below market value.

Non-Agricultural Criteria include:

1) proximity to critical environmental areas, including wetlands, steep slopes, mountainside areas (based on elevation), woodlands, or stream headwaters;
2) proximity to endangered or threatened species habitat;
3) high groundwater recharge potential;
4) provides buffer between distinct urban communities;
5) opportunity to link open space or recreation resources;
6) historic significance;
7) presence of archaeological resources;
8) established or familiar visual feature;
9) proximity to designated scenic byway, river and/or ridgeline;
10) contains distinct scenic resource such as mature forest, tree stands, open fields, waterways, hedgerows, stone fences;
11) proximity to an urban growth boundary, town or village boundary;
12) located in an urban growth area;
13) availability of other funds to leverage purchase; and
14) purchase price is below market value.

In February 2002 the Loudoun Board of Supervisors approved the first round of purchases under the program 9 acquisitions costing a total of $4.4 million. The county PDR staff is in the process of closing on these purchases, with a goal of completing them all by the end of December 2002. The second round of purchases is underway, with 18 properties having been selected for negotiation from a pool of applicants. Approximately $4 million is available for this second round, with which the county hopes to purchase development rights on either 8-10 lower value properties or 2-4 higher value properties.

Appraisals are currently being completed on those properties that agree to continue with the application process once easement language is discussed. These appraisals are funded by the county out of the PDR programs operating budget, not from PDR acquisition funds. The current year funding includes a one-time allocation of $980,000 from the countys annual transient occupancy tax (TOT) revenues. The county is examining its TOT allocation formula and may decide to allocate additional TOT revenues to the PDR Program in future years.

Albemarle County. The Countys PDR program is in its third year and has so far preserved over 1,000 acres of land. It is aimed at preserving open space lands and all of the various benefits derived from that. It is called the Acquisition of Conservation Easements (ACE) program, and is funded by the County at $1,000,000 per year. The program works as follows:

Step One: The landowner contacts the County Department of Planning and Community Development to obtain information.

Step Two: The landowner submits and application to the County.

Step Three: The property is evaluated according to ACE program criteria for priority and eligibility. The criteria are:

•Size of the property
•Soil productivity
•Threat of conversion
•Within reservoir watershed
•frontage on scenic byway or entrance corridor
•Presence of rare species or exemplary natural community
•Rural historical district or historic resource
•Highly visible mountain ridge

Step Four: The highest priority properties are appraised to determine value of the conservation easement.

Step Five: The landowner is offered the appraised value or adjusted value, depending on income. Landowners of modest means receive full value.

Step Six: The landowner accepts or rejects the Countys offer.

Step Seven: The Board of Supervisors approves appropriation of funds to landowners.

Step Eight: Landowner and County sign deed of easement and record in Clerks office.




Fauquier County. Fauquier County already has 47,792 acres protected by conservation easements, representing over ten percent of its total land area. Nevertheless, in recognition of the increasing development pressure on the countys farmland, the Fauquier County Board of Supervisors has authorized the establishment of a Purchase of Development Rights (PDR) Program for the preservation of farmland and directed that revenues from roll-back taxes collected through the countys Land Use Assessment Program be allocated through the countys Capital Fund exclusively for the PDR Program. FY 2003 is the first year of the Fauquier PDR Program, and $175,000 is available from roll-back tax revenues to fund first-round purchases. The county hopes to match this funding in the future with funds from State, Federal and private sources. The countys Agricultural Development Officer is currently working with a PDR Team to establish procedures and criteria for the program. The countys dairy belt along U.S. Route 28 is the first priority for preservation. The goal with the programs limited funding is to buy development rights on one to two farms in the first year of the program.

Applicants will be sought during the second quarter of FY 2003, with Board of Supervisors approval of the first round of purchases targeted for the third quarter, and closings on approved properties by the end of June 2003. To be eligible for consideration under the program, the farmland must be a minimum of 50 acres, generate farm income of at least $25,000 per year, be zoned in one of the countys two rural/agricultural zoning districts, not be covered by an existing conservation easement, and not be under consideration for donation of a conservation easement. Properties will be assigned a high, medium or low ranking based on criteria such as the quality of soils, existence of farm infrastructure, and the risk of development.

How PDR Might Work in Montgomery County

One of the most appropriate PDR models for Virginia localities is the first one, which was established by the City of Virginia Beach in 1995. Based upon that model, a potential outline for a local program might be as follows:

Procedures

County defines a target area in which the County will seek to purchase development rights from owners of undeveloped rural land.

Potential areas include all land outside the Growth Area. (A County might be wise to target a smaller area, however, in order to improve effectiveness - possibly a greenbelt area adjacent to a Growth Area boundary)

Each year, the County entertains applications from landowners of qualified lands in the target area who wish to sell development rights on their land to the County.

The County ranks each application according to adopted criteria and makes an offer to purchase the development rights from the landowners whose applications meet the qualifications.

The offer price is determined by the County and represents the difference between the fair market value of the land before and after being encumbered by a permanent conservation easement that extinguishes the development rights of the property.

The County purchases the development rights by entering into an installment-purchase agreement with the property owner.

The County agrees to pay the purchase price in one lump sum installment after 25 years and to pay interest on the unpaid balance of the purchase price. The County purchases a U. S. Treasury strip or zero coupon bond in the amount of the full value of the easement, which will mature in 25 years. The County pays the landowner annual interest for the life of the note (the interest is tax free to the landowner). At its maturity, the landowner is paid the full amount of the easement value in a lump sum payment. This procedure allows the County to leverage its funds and gives the agricultural land owner a stream of tax free income which may be used as the owner sees fit.

A landowner applies to sell his/her development rights to the City. The City appraises the property and offers a value equal to the difference between market value with the development rights and without. That is the purchase value of the development rights. The City enters into the purchase agreement with the landowner, places the land under easement and then pays the owner an annual interest payment equal to the interest rate received from the Treasury security. This interest is tax free to the landowner. After 25 years, the City takes the money from the mature Treasury security and pays the landowner a balloon payment to complete the purchase of the development rights.

The City allocates about $3,000,000 per year to purchase development rights. This money is raised through a 1 and 1/2 cent increment on the real estate tax rate.

The City has designated about 30,000 acres as eligible for this program. At current values, the 1 and 1/2 cent real estate tax allocation will allow the purchase of development rights on about 25,000 acres of land.


Feasibility and Cost/Benefit

Actual costs and benefits of a PDR program will depend upon the specific elements and commitments that are adopted by the County.

Since the real estate tax base is higher in Virginia Beach than Montgomery, the above values must be tailored for Montgomery County to get an accurate assessment of the feasibility. However, using the concept outlined above, and the following cost and funding assumptions, Montgomery might expect the following:


[add data and analysis here if desired]

Montgomery County receives approximately $________ for every penny on the real property tax rate. The range of available funding might range from one to three cents on the tax rate, or $_______ to $_______ per year. The funding level is the Countys choice.

Easement values on farm and forest land might be expected to range from $______ to $______ per acre and average about $_____ per acre (roughly half to two-thirds of the full market value).

A one and one-half cent real estate tax allocation would raise approximately $_____ annually.

Assuming a value of $____ per acre for development rights, approximately ____ acres could be preserved each year, or _____ acres during a 25 year period. If the tax allocation was increased to 2 cents annually, about ____ acres could be preserved annually, or ____ during 25 years.

Either of these totals would be a significant contribution to supporting a Growth Area boundary and preserving land in the rural areas. However, a more detailed analysis of cost trade-offs would of course be necessary before deciding to proceed further.

A summary of the above analysis is shown in the following table.

Potential Number of Acres Preserved Through a PDR Program
During a 25 Year Period

Value/Cost of Easements (per acre)

Annual Funding $1,000 $2,000 $3,000

$______ (1 cent on tax rate) _____ acres _____ acres _____ acres

$______ (2 cents on tax rate) _____ acres _____ acres _____ acres

$______ (3 cents on tax rate) _____ acres _____ acres _____ acres

Approximately _____ acres of land in Montgomery County is classified as being in agriculture uses (about ____% of the Countys total land area). Thus, the PDR options shown above could in theory preserve from ___% to ___% of that land.


Relationship to other efforts

A PDR program would reinforce the Countys planning policies for both urban and rural areas. It could reinforce a Growth Area boundary and could be used in conjunction with other rural growth management efforts such as the Countys sliding scale zoning, as well as any additional flexible zoning provisions such as rural cluster development. It would compete, however, with funds required for other County goals, especially provision of basic public services such as schools. As the County looks backward in time from a point 25 years in the future, it is very possible that citizens would feel very proud and satisfied that development rights were acquired on several thousand or more acres of open land at the edges of the urban areas. At that point in time, the investment might well seem like a wise one.

3) Other localities that have used it and with what success

In addition to the Virginia localities discussed above, many other localities and states around the nation have successfully used PDR, including Howard County, Maryland, and King County, Washington. In addition to such locally-based efforts, at least 14 states have state-based programs (including Maryland, New Hampshire and Pennsylvania) which had preserved over 400,000 total acres as of 1997.

A selection of locally-based programs in the United States are shown in the following table.

Local PDR Programs in the U.S.

Following is a summary table showing the features of various local PDR programs throughout the nation.

Source: Saving American Farmland: What Works, American Farmland Trust, 1997

Jurisdiction Year of Inception Acres Protected Farms Protected Funds Spent to Date (1997)
Funding Source

California
Marin County 1980 25,504 38 $17,000,000 State bonds, 10% of unallocated county funds
Sonoma County 1980 22,850 60 $34,000,000 .25% sales tax, state bonds

Colorado
City of Boulder 1984 1,092 6 $6,833,732 Sales tax

Florida
Green Swamp Land Authority

1994

12,826
22
$10,500,000 State agencies and a water management district

Michigan
Peninsula Township

1994

724
10
$1,253,000

Property tax, state grants, FPP**

New York
Southampton 1980 765 19 $5,640,000 Municipal bonds, FPP**
Southold 1986 627 24 $5,010,000 Property taxes
Suffolk County 1974 5,568 139 $26,000,000 Municipal bonds, FPP**

North Carolina
Forsyth County 1986 1,236 20 $1,869,965 County budget reserve, FPP**

Pennsylvania
Buckingham Township

1996

137
3
$1,100,000

Municipal bonds

Virginia*
Virginia Beach 1995 48 1 $267,016 Property taxes, cell phone tax

Washington
King County 1979 12,691 209 $54,113,724 Municipal bonds, FPP**
San Juan County

1990

670
5
$1,419,401

Real estate transfer tax

Wisconsin
Dunn 1996 174 1 $260,000 Property taxes

Total 84,912 557 $165,266,838

*table does not include post-1997 programs including Albemarle and Loudoun Counties
** FFP: Federal Farmland Protection Program




4) Summary of pros and cons

Potential advantages of Purchasing Development Rights include:

Most effective way to ensure that a given tract or area of land is preserved

Permanent solution

Voluntary solution

Public action by the County may spur supportive private action such as land trusts, donations, etc.

Potential disadvantages include.

Cost is high - funding may be difficult given the other demands on the County budget

High cost may limit the overall effect of the program in terms of total number of acres protected






b. Donation of Conservation Easements (including technical assistance to facilitate)

1) Main Purpose

Many thousands of acres of land have been placed under easement by landowners in Virginia through donations of the easements to non-profit agencies such as the Virginia Outdoors Foundation.

The donation of a conservation easement that meets federal tax code requirements (Section 170 (h) of the Internal Revenue Code) can be deducted from state and federal taxable income, just like tax-deductible gifts made to a non-profit organization. There are limits on how much can be deducted in any one year, though the deduction can be carried forward for up to five succeeding years. Installment donations can ensure that none of the income tax deduction is lost after year six. This incentive to donate an easement can be very powerful to a person facing a high level of capital gains tax on other investments.

Enacted in 1999, Virginia now offers a state income tax credit for donations of conservation easements (Section 58.1-512). This is in addition to the state income tax deduction described in the previous paragraph. The amount of the credit is 50% of the value of the donated easement. The maximum annual tax credit amount is $100,000. Unused credit can be carried forward for five years or until the credit is used up. A credit is not the same as a deduction. A deduction is taken from taxable income. A credit directly reduces the donors income tax bill.

Local governments stand to benefit from the promotion and encouragement of conservation easement donations, because an easement that is donated is one that a local government does not have to purchase through a PDR or ACE program.

2) How It Works

Currently, local governments are not actively involved in organized efforts to promote easement donations, educate landowners about the benefits, or provide technical assistance to landowners to facilitate such donations. (As noted below, Albemarle County is providing some such assistance for the niche area of smaller parcels). Such efforts could be organized in a variety of ways with a variety of potential methods and activities. The main features could be one or more of the following activities:

•Promoting and encouraging landowners to make easement donations
•Providing general information about the potential benefits to landowners
•Providing technical assistance to individual landowners
•Facilitating the linking of landowners with appropriate specialists such as tax attorneys, appraisers, land planners, etc.


3) Other localities that have used it and with what success

None of the four counties examined for this report have a formal program to provide technical assistance to facilitate easement donations.

However, Albemarle County is pursuing the niche of accepting conservation easements on smaller tracts of less than 50 acres that may have special or unusual public importance for conservation purposes (typically, conservation easement recipients often look for larger tracts of 50 or 100 acres or more).

Also, Loudoun Countys Revised General Plan, recommends that the county consider the establishment of a conservation foundation whose main purposes are to educate landowners about the income and estate tax benefits of conservation easement donation, to accept donations to support the Countys Purchase of Development Rights (PDR) program, and to develop a network of charitable creditors and conservation-oriented buyers to guarantee loans and to purchase eased property.

4) Summary of pros and cons

Potential advantages of promoting Easement Donations include:

Relatively inexpensive (compared with the PDR option)

County can design the provisions and activities without State control

Involvement of landowners is voluntary

Potential disadvantages include:

Results and cost/benefit to the County are uncertain

c. Lease of Conservation Easements (Lease of Development Rights/ LDR)

1) Main Purpose

Leasing of Development Rights (LDR) is one alternative to a PDR program. LDR can also serve as a supplement or alternative to the current Use Value Assessment Program (Land Use).

Such a program is a kind of blend of PDR programs and Use Value Assessment, with similar purposes of agricultural land preservation. While the LDR concept lacks the permanent solution that a PDR program achieves, it can have a broader, more inclusive and longer term impact than Use Value Assessment.




2) How It Works

LDR is a temporary acquisition of development rights (conservation easements), instead of the permanent acquisition or purchase of development rights as described in the PDR program. The easement acquisition may be for a time period as short as five years.

As with PDR, the program would be voluntary on part of landowner.

The criteria, priorities, terms and compensation would be established by the County as it deems reasonable, and it could include some kind of rollback provision, particularly in the case of an early withdrawal from the program if the County chooses to permit such an option. The compensation to the landowner is accordingly less than permanent easements obtained under a PDR program

An LDR program could be offered as an alternative to or enhancement of Use Value Assessment and/or Agricultural and Forestal Districts. The easement would not affect the underlying zoning of a parcel, but it would preclude all non-farm development for the duration of the lease period.
Procedures

There are conceivably many ways an LDR could be structured, and no examples are available in Virginia. However, an outline of one possible approach is shown below.

County defines a target area in which the County will allow owners of qualifying lands to apply for the Leasing program. As with PDR, potential areas include all land outside the Growth Area. County may want to target a smaller area.

Each year, the County entertains applications from landowners of qualified lands in the target area who wish to lease development rights on their land to the County.

Lease periods could be set for as little as five years, but the County might offer a range of periods, say five, ten or 15 years, with different terms and compensation levels associated with each.

The County evaluates each application according to adopted criteria and enters into an agreement to lease the development rights from the landowners whose applications meet the defined minimum qualifications.

In contrast to PDR, the lease price would likely be a set value, possibly based upon the characteristics of the land, similar to the Use Value Assessment program. It would likely be non-negotiable. Value would be determined by the County based upon the impact of the lease on the value of the land and on the benefit to the County of holding such temporary easements. The County would want to set the price of the lease at a level that had the effect of reducing the landowners real property tax on the land, but not eliminating it, and not producing a negative tax revenue to the County.

The County enters into a lease agreement for the defined period.

The County agrees to pay an annual fee to the landowner, drawn from the general fund. The County would likely offer LDR as a substitute for Use Value Assessment. As such, the additional funds that the County would receive upon abolishing Use Value could be used to fund the LDR program as a replacement for Use Value. If Use Value was retained, the LDR program would likely be funded from general revenues.

Costs/Funding Assumptions

Lease values will have to be set in accord with what the market will bear. One could assume that the lease payments could be set at levels equivalent to or slightly higher than the benefits that landowners currently receive through Use-Value Assessment, due to the more restrictive nature of the lease terms. Therefore, payments would probably be higher in order to attract the same amount of acreage into the program. However, the County could re-capture all or part of the lease payments through a strong rollback provision at the end of the lease period.

Potential Outcome

Leasing would thus be far less expensive than a PDR program, and could be a more effective substitute for Use Value. Depending upon the level of participation among landowners, the County could enter into lease agreements with owners of most of the agricultural land in the County without allocating hardly any additional funds. If additional funds were needed in order to make the program attractive, most or all of these funds could also be recaptured through a rollback provision. Clearly, the level of participation from landowners will greatly depend upon the attractiveness of the terms of lease payments and rollback requirements. As with Use Value Assessment, the purpose is to delay development, encourage farming, and reduce County expenditures for other capital and operating expenses.

3) Other localities that have used it and with what success

No localities in Virginia have been identified as having implemented an LDR program, although Fauquier County considered such a program in its 1995 Rural Areas Land Use Plan, which recommended leasing development rights for five or more years in conformance with the Open Space Land Act, Section 10.1-1703 of the Code of Virginia.

Further, as noted previously in this report, Loudoun County identified potential amendments to its Use Value Assessment program that would have some features similar to an LDR program.

4) Summary of pros and cons

Potential advantages of Leasing of Development Rights include:

Voluntary

Relatively inexpensive (compared with the PDR option)

County can design the provisions without State control

Potential disadvantages include:

Temporary solution

Untested in Virginia

May result in compensating landowners for what they were going to do anyway


d. State and Federal Programs

There are several potential Federal funding sources, including:

•Farmland Protection Program (1996 and 2002 Farm Bill, administered by USDA)
•Hazard Mitigation Grant Program (1988 Disaster Relief and Emergency Assistance Act, administered by FEMA, purchases easements only on farmland in the 100-year floodplain)
•Transportation Equity Act for the 21st Century (TEA-21, administered by VDOT, applies to rural lands along scenic roads; reauthorization after FY 2002 is still pending).

State funding sources could include the following though future funding levels may be greatly affected by current State budget problems:

•Virginia Land Conservation Foundation (created in 1999, administered by the Virginia Department of Conservation and Recreation (DCR))
•Open Space Lands Preservation Trust Fund (administered by Regional Open Space Preservation Advisory Boards and the Virginia Outdoors Foundation, funding for legal/administrative the costs of setting up donated easements
•Conservation Reserve Enhancement Program (created in 2000, administered by DCR, applies to pasture and crop land adjacent to streams, wetlands, ponds, and sinkholes)
•Forest Legacy Program (administered by the Virginia Department of Forestry, purchases easements on forest land)




4. Rural Economic Development Initiatives

a. Main Purpose

The main purpose of Rural Economic Development Initiatives is to promote new kinds of economic activities in the rural areas that allow farmland and forest owners to reduce costs and increase revenues from the use of their land in a way that maintains the traditional agricultural landscapes and natural systems in the rural areas.

b. How It Works

Rural Economic Development Initiatives include programs to promote or establish new rural-based businesses that are compatible with the existing natural and agricultural environment. These can include agri-tourism, eco-tourism, new, alternative and local markets for agricultural and forest products, and new or alternative production techniques and methods. Methods for accomplishing this are shown in the examples from other jurisdictions outlined below.

c. Other localities that have used it and with what success

Fauquier County. The 1995 Fauquier County Rural Areas Land Use Plan recommended several measures to support the countys rural economy, including creation of an Agricultural Advisory Committee (AAC) and establishment of an Agricultural Development Office within county government. Both of these recommendations have been implemented, and both the committee and new staff have been very active.
The Fauquier County AAC is a standing committee whose mission is to promote the agricultural industry within Fauquier County, to increase the economic viability of farming, and to advise the Board of Supervisors on matters affecting the agricultural economy and its development. The committee includes a representative from the Board of Supervisors and five to nine citizen members, appointed at-large by the Board, to represent the major agricultural sectors in the County.

Besides advising the Board of Supervisors on county agricultural development issues, the AAC has created a number of rural economic development initiatives. One of the more successful is the annual Piedmont Small Farm Festival, created in cooperation with adjacent Rappahannock and Culpeper Counties, the Rappahannock-Rapidan Regional Commission, and the newly created Agricultural Development and Marketing Committee. The festival promotes the Think Globally, But Locally marketing campaign of the committee by encouraging visitors to buy local agricultural products. An award-winning Fall Farm Tour, in its sixth year, also supports local agriculture by encouraging visitors to the countys farms.

The Fauquier Agricultural Development Office in 2001 worked with the local Cooperative Extension Office to create the Virginia Independent Growers Cooperative, which is a non-profit agricultural cooperative modeled after a successful organic growers cooperative in Hustontown, Pennsylvania. The cooperative, which is open to local growers of horticultural and food products in Fauquier and surrounding counties, is intended to support the development and maintenance of independent family-run agricultural enterprises. Members pay $125 per year plus 15 % of their sales to support the cooperatives operating expenses. The cooperative has permanent market space where it sells goods every Sunday, including over 80 herbs, perennials and topiary greens, fruit, vegetables and pork sausage.

Other rural economic development initiatives by the Agricultural Development Office include maintaining an annual list of county farm products; creating and maintaining a list of agricultural land for rent/land needed; assisting in the marketing of local farmers markets; and promoting rural getaway stops, such as orchards, farm markets, vineyards, Christmas tree farms, horseback riding stables, and pick-your-own businesses.

Loudoun County. Loudoun County has made a major commitment to preserving and enhancing its rural economy. The county has an Agricultural Advisory Committee (AAC) similar to that in Fauquier County, and a whole section of its Economic Development Department is devoted to rural economic development. The 1998 200,000-Acre Solution report of the countys Rural Economic Development Task Force and the Loudoun County Revised General Plan provide strategies for strengthening the rural economy that are being implemented by the AAC and the Agricultural Development Office.

Some of Loudouns rural economic development initiatives, which run the gamut from agri-business development to agri-tourism, that are currently being implemented include:

á Loudoun Valleys Initiative. The Loudoun Valleys Initiative hopes to link the traditional, market-driven agriculture economic base with the related industries of biotechnology, tourism and rural business.

As part of this initiative, the county plans to target agricultural biotechnology, or pharming, as a growth industry within the county because it believes that very high profit potential exists in this emerging industry. Agricultural biotechnology firms include well-known pharmaceutical companies, such as Novartis, chemical giants Monsanto and Dupont, as well as genetic research firms. Products being developed will provide more disease-resistant or more nutritious plants, will help with bioremediation for solid waste facilities, and will provide new pharmaceuticals. The countys effort will involve seeking Federal funding for biotechnology demonstration projects; conducting a biotechnology industry study to identify businesses for recruitment, to develop strategies to attract these businesses, and to propose incentives for their location in Loudoun County. The county plans to establish a demonstration biotechnology farm to promote pharming within the county as a link to the growing biotechnology sector of the countys economy.

Another thrust of the Loudoun Valleys Initiative is to encourage the location of new rural economy uses within the rural area as an alternative to residential subdivision and in support of both agriculture and tourism. Uses as diverse as country inns, corporate retreats, farm and feed stores, antique shops, and farm machinery repair shops are being encouraged to local in rural areas through amendments to the county zoning ordinance discussed in a later section of this report.

á Farm Tours. Two annual farm tours are offered in cooperation with local farmers, the Spring Farm Tour and the Fall Farm Color Tour, which allow residents to experience rural life and purchase directly from the producers. The Agricultural Development staff publishes a brochure for each farm tour that is widely distributed in the Washington Metropolitan area. Although only initiated six years ago, the farm tours now draw 10,000 people each year and generate over $30,000 in weekend farm sales.⁴

á Market Guides. The Agricultural Development Office produces an annual market guide to Loudoun fruits and vegetables, horticulture products, hay and straw, and Christmas trees that may be purchased directly from the grower or at one of the countys five farmers markets. The Loudoun Farm Fresh Market Guide features products from over 30 farms. The Office also coordinates and markets all of the farmers markets.

á The Loudoun Wine Trail. The Office has created a Loudoun Wine Trail brochure that guides visitors to nine wineries located in the county. Grape production is a growth industry for the county, and wineries are finding high tasting room sales due to the countys proximity to a major metropolitan area.

á Agriculture Facts. The Agricultural Development Office maintains a web site that includes the latest facts on Loudouns rural economy.

á FarmLink Program. The Office maintains a list of farmers in need of land to lease and landowners with land to lease.

All of these initiatives are intended to work together to promote three overall goals listed in the 200,000-Acre Solution report: greater profitability for farming, new initiatives to increase the rural economy, and preserving the natural resource base for future agriculture. One idea in the 200,000-Acre Solution report to address the profitability issue that has yet to be implemented is development of an agricultural lending program with community banks, making agricultural lending a mandatory criterion for the placement of County funds with a bank (similar to an existing county program for affordable housing). Another is to assist rural agri-businesses in exploring innovative lending vehicles, such as U.S. Department of Agriculture (USDA) intermediary re-lending loan programs and risk leveraging mechanisms. The report also recommends that the County consider the use of tax credits on real property taxes to encourage capital investment and expansion in agri-business.

To increase the rural economy, the Task Force recommended focusing commercial agriculture on high-value crops for which there is strong market demand and high producer profits, including multi-year horticultural crops such as wine grapes, Christmas trees, nursery stock, small fruit, tree fruit, and greenhouse or field-grown specialty produce. A demonstration farm was also recommended to showcase new crops and new production methods, so that farmers can readily assess the production potential of these new crops, and consumers can sample the produce.

Establishment of an agricultural cooperative similar to the one established in Fauquier County is planned to allow access to new markets and methods, to provide professional marketing and technical support, and to increase local producers access to existing markets. This traditional cooperative will be enhanced through an electronic cooperative producers network using county technology and linked to the county web site.

Rural tourism is strongly supported within Loudoun County not only through the efforts of the Agricultural Development Office noted above (farm tour and marketing brochures), but also through the programs of the Loudoun Convention and Visitors Association (LCVA). LCVA has developed visitor packages for groups with rural Loudoun themes in cooperation with the Washington Area Concierge Association and other local tourism groups. LCVA also provides marketing assistance to rural towns and rural businesses, such as bed and breakfast inns.

d. Summary of pros and cons

Advantages of Rural Economic Development Initiatives include:

•All programs are voluntary on the part of landowners

•Addresses the underlying cause of the loss of farmland, which is the lack of economic competitiveness with other more intensive land uses

•Relatively economical compared to programs such as easement acquisition

Disadvantages of Rural Economic Development Initiatives include:

•The solutions are long term and indirect, thus success is difficult to measure and may not be evident in the short to medium term

•The level of uncertainty is high in terms of the prospects for success




5. Zoning and Subdivision Regulations

a. Large Lot Zoning

1) Main Purpose

Large lot zoning (also called Agricultural Zoning) is simply a regulatory measure in which the minimum lot size in a designated rural zoning district is set at a large enough size so as to protect the existing agricultural activities and economy from excessive encroachment of residential and other non-agricultural land uses. While the main purpose is to establish a large lot size or low density development pattern, the list of permitted uses in the zoning district is also tailored to ensure that new development will be compatible with and supportive of the existing or planned agricultural uses.

The American Farmland Trust defines a large lot for the purposes of agricultural protection as being 20 acres or more. However, given the potential productivity of small acreages and the limited amount of land needed for merely a residential use, it would be reasonable to consider any zoning density of 10 acres or larger as a large lot measure.

2) How It Works

Large lot zoning functions as stated above, by simply limiting the density/intensity and kind of land uses permitted in the designated agricultural areas. This will tend to limit land use conflicts as well as stabilize land values, or at least help ensure that land values are related to the underlying economic power of agricultural activities rather than more intensive uses such as housing.

3) Other localities that have used it and with what success

In Virginia, several counties use large lot zoning and the minimum permitted lot sizes range from 10 acres in Powhatan, Prince William, and Fauquier Counties, to 25 acres in Rapphannock County. (Note also that Loudoun County is currently in the process of re-mapping a portion of its rural area to a district that would have a minimum lot size of 50 acres, except for cluster development).

Most of these localities are characterized by one or more of the following features:

The large lot zoning was established a relatively long time ago, before development pressures became intense
The locality is not experiencing high growth pressure, and thus lot size is not a huge issue
The agricultural industry is large, valuable and intensive and farm owners and operators actually want real protection from encroachment of residential uses



In some other states, the minimum lot size in large lot zoning districts is even larger than in Virginia. In the midwest and in California, for example, there are counties with minimum lot sizes of over 100 acres, although these tend to be in areas that have relatively little development pressure in relation to farmland values and farm income, or in areas where farms are very large and extensive due to soil or climate conditions.

(Note also that in some localities in Virginia where a version of sliding scale zoning is used, the effective minimum lot size and/or density is as high as 40 acres or more per unit, but these examples are discussed under the Sliding Scale technique below).

Examples of conventional Large Lot Zoning in Virginia include Hanover County (10 acre minimum), Prince William County (10 acre minimum) and Rappahannock County (25 acre minimum).

Fauquier County. The Fauquier County Zoning Ordinance provides a large lot development option in its two rural zoning districts as an alternative to division under its sliding scale zoning provisions (discussed below). The minimum parcel size to be eligible for the large lot division is 100 acres, and the lots created must be a minimum of 50 acres each. The large lot development option is exempt from the requirement of the subdivision ordinance, but any resulting lots less than 100 acres may not be further subdivided.

4) Summary of pros and cons

Advantages of Large Lot Zoning include:

Inexpensive - it helps protect farmland from encroachment of residential development through use of the police power, and thus at a low public cost

Reduces conflicts between farms and non-farm neighbors

Helps prevent sprawl and reduces public infrastructure costs

Can be used in combination with other tools such as easement purchase, clustering, etc.

Simple - it is relatively simple to implement and easy to explain

Can help limit land speculation by stabilizing land values and expectations for future development

Most effective in areas where the farm economy is strong and farmers want protection from development



Disadvantages of Large Lot Zoning include:

Difficult to implement without support of the farming community, due to the potential impact on the market value of the land. It is typically controversial in areas where the value of the land for development is far higher than its value for farming, and where farmers have the impermanence syndrome or the expectation of selling the land for development in the foreseeable future

Not permanent - it is a temporary measure and can be changed easily by local legislative action

Does not preserve farms or farming, per se, but rather merely provides the setting to allow farming to continue with less disruption


b. Sliding Scale Zoning

In 1999, Montgomery County joined the Virginia counties of Clarke and Fauquier in adopting a sliding scale zoning provision. Below is a basic explanation of the sliding scale technique and a comparison of Montgomerys and Clarkes approach.

1) Main purpose and focus/priority of the tool

Sliding scale zoning has similar basic purposes to large lot zoning, but is designed to have a relatively minimal impact on the development potential of smaller properties and have a greater effect in conserving the agricultural capacity of larger tracts.

2) How It Works

Sliding Scale zoning essentially requires that the larger the initial size of the parent parcel prior to subdividing, the lower the permitted density. The permitted density decreases on a sliding scale as the size of the parent parcel increases. The rationale for sliding scale is that higher densities should be allowed on smaller tracts because they are difficult to farm and may have already moved out of agriculture into the residential land market.

This can be illustrated by an example from Clarke County, as follows:


Size of Tract of Land Number of Single Family Detached Dwellings Permitted

0 - 14.99 acres 1
15 - 39.99 acres 2
40 - 79.99 acres 3
80 - 129.99 acres 4
130 - 179.99 acres 5
180 - 229.00 acres 6
230 - 279.99 acres 7
280 - 329.99 acres 8
330 - 399.99 acres 9
400 - 499.99 acres 10
500 - 599.99 acres 11
600 - 729.99 acres 12
730 - 859.99 acres 13
860 - 1,029.99 acres 14
1,030 or more 15


Minimum Lot Size is 1 acre; maximum lot size is 2 acres

Using the above scale, a landowner with an existing parent parcel of 200 acres would be permitted to divide it into six lots for dwelling units, for an average density / lot size of 33.33 acres. Each new lot would have to be no greater than two acres, with the remainder of the tract (188 acres) remaining in open farmland or forest land.


Montgomery Countys Sliding Scale provision differs somewhat from Clarke Countys in that it is not as restrictive in terms of overall density.

Excerpts from Montgomery Countys Zoning Ordinance showing the sliding scale provisions are as follows:

1. Minimum Lot Area: One (1.0) acre

2. Density

In addition to the minimum required lot area defined above, the maximum gross density (total number of lots per parent parcel after subdividing) for residential development in the A-1 District shall be in accord with the following sliding scale:

Parent Parcel Area Total Lots Permitted on Parent Parcel

0.0 to 10.0 acres up to 3 Lots

more than 10.0 acres up to 30.0 acres up to 4 Lots

more than 30.0 acres up to 50.0 acres up to 5 Lots

more than 50.0 acres up to 70.0 acres up to 6 Lots

more than 70.0 acres up to 90.0 acres up to 7 Lots

more than 90.0 acres up to 110.0 acres up to 8 lots

More than 110.0 acres up to 130.0 acres up to 9 lots

more than 130.0 Acres
one (1) additional lot for every 20 acres over 130 acres

All lots in the A-1 District are subject to all applicable regulations for on-site water supply and wastewater treatment, which may limit the number of lots permitted; except for public utility, telecommunications towers or public water or sewer installation lots which are not for habitation and which may be a minimum of 10,000 square feet.

Moreover, the Board of Supervisors may authorize the issuance of a special use permit for more lots than the total permitted by the sliding scale in situations where a family subdivision conflicts with the sliding scale.

2.1. Clustering of permitted lots between parent parcels

A landowner with several contiguous parent parcels may cluster the number of permitted lots from any one parent parcel to any other contiguous parent parcel provided the landowner merges the two contiguous parent parcels into one parcel by vacating the boundary line and all other lot requirements under Section 2-105 are met.

4. Maximum Coverage

A. Net residential density on a parent tract shall not exceed one dwelling per two and one-half (2.5) net acres, including accessory dwellings, and shall also be subject to the sliding scale limitations of Section 2-105-2

B. No more than twenty (20) percent of any lot shall be covered by buildings or other impervious surfaces.



Modified Sliding Scale Zoning

A variation on sliding scale zoning is used in several jurisdictions in Virginia. This is known by various names, including conservation lots, one step system, and fixed-lot, among others.

Essentially, this technique establishes a maximum number of lots that may be subdivided from a given parent parcel, regardless of the size of the parcel. In some versions, a fixed number of lots is permitted for the land area up to a given amount, and then for the remainder of land on a larger parcel, a large lot size such as 40 acres is required of all subsequent subdivided lots.

An example of modified sliding scale system is shown in the table below. If the maximum number of permitted lots for any parent tract is five and the minimum lot size of the subdivided lots is 3 acres, the effective permitted density for a range of parent tract sizes would be as follows:



Size of Tract of Land Number of Single Family Detached Dwellings Permitted

Effective Average Density

10 acres 3 1 unit per 3.33 acres
20 acres 5 1 unit per 4 acres
50 acres 5 1 unit per 10 acres
100 acres 5 1 unit per 20 acres
200+ acres 5 1 unit per 40+ acres


3) Other localities that have used it and with what success

Localities that use Sliding Scale Zoning in Virginia include Montgomery County, Clarke County and Fauquier County.

Localities that use Modified Sliding Scale Zoning or Conservation Lot Zoning in Virginia include Albemarle County, Isle of Wight County, and Bedford County.




4) Summary of pros and cons of Sliding Scale Zoning

Advantages of Sliding Scale Zoning include:

Limits development of a farm tract; allows residential development to occur on the site without unduly encroaching on farm activities

Focuses protection on the large tracts which are typically most important for farming

Uses the police power, and thus protects land at a low public cost

Can be used in combination with other tools such as maximum lot sizes, clustering, etc.

Relatively simple to implement

Most effective in areas where the farm economy is strong and farmers want protection from development

Disadvantages of Sliding Scale Zoning include:

Sometimes difficult to implement without support of the farming community, due to the normally restrictive nature of the requirements

Temporary measure - can be changed easily by local legislative action (note however, that sliding scale ordinances may require that upon recording a sliding scale subdivision, a permanent easement must be placed on the tract, locking in that low density subdivision).

Advantages and Disadvantages of Modified Sliding Scale Zoning

The pros and cons of these modified versions of sliding scale are similar to the basic sliding scale provision, except that these modifications are simpler and easier to understand. Further, depending upon the specific provisions, this provision can be made either more or less restrictive than a conventional sliding scale ordinance.



c. Rural Cluster Zoning

1) Main Purpose

The purpose of Rural Cluster Zoning is twofold: to allow a relatively significant amount of residential development to occur in rural and farming areas, while at the same time to ensure that such development is designed and laid out to have the least possible impact on the landscape and to preserve large chunks of open land even after the development is complete.

2) How It Works

Cluster zoning essentially provides that when a rural residential subdivision is created, it be designed so that the dwelling units are clustered together on a relatively small portion of the tract, leaving the remainder available for agricultural and other open space uses.

Typically, the remaining open space is preserved through restrictive covenants or permanent conservation easements. The preserved open space is sometimes allowed to simply be an oversized lot within the developed that is sold like the other lots, but is larger in size and thus remains suitable for continued farm or forest use.

There are many variations on this theme, in Virginia and other states. The range of options includes, but is not limited to the following:

Rural cluster provisions can be voluntary options within a conventional rural or agricultural zoning district, including large lot or sliding scale regulations as discussed above.

Rural cluster provisions can be either mandatory (the only permitted subdivision option within such a district) or can be voluntary and by-right, or voluntary by special use permit.

Rural cluster provisions can require rezoning in order to implement (examples include Loudouns Rural Village provision and Isle of Wights rural cluster with density incentives, described below).

Variations on Cluster Zoning

Percent of Land Developed

One variation on rural clustering is to specify a maximum percentage of the parent parcel or tract that can be converted to non-agricultural or non-open space uses. Such a provision can be relatively simple and may permit a great deal of flexibility to the developer in terms of lot size and unit type on that portion of the land that is permitted to be converted.

(An example of this technique from another state is East Hopewell Township, PA. The ordinance limits development to 10 percent of the total tract area and sets a minimum lot size of one acre).

Lot Size Averaging

Another variation on rural clustering is to specify the average minimum lot size for a rural subdivision, but permit the developer to achieve that average by creating some lots that are larger and some smaller. Again, the advantage of this variant is to provide more design flexibility in order to respond to unique site conditions and to the market demand. Potential disadvantages include the risk that the small lots will be grouped near the existing public road, creating the perception of greater overall density than actually exists.

(An example in Virginia is Powhatan County. In the rural, agricultural zoning districts, the Zoning Ordinance establishes a minimum lot size (for example two acres) and a different average lot size (for example five acres) so that, for example, each three acre lot must be off-set by the creation of a seven acre lot so that the average remains no less than five acres).

Maximum Size of Building Lots

Another variation on the rural cluster concept is to set a maximum rather than minimum lot size for rural subdivisions. This in effect forces a clustered layout, with some percentage of open space remaining after subdivision. The percentage of open space that remains will be determined by the actual maximum lot size required in relation to the maximum overall site density required.

One potential disadvantage of this approach is that it would require that the open space be held in common and/or be a strictly agricultural parcel with no development rights remaining on it. From a practical, long term administrative standpoint, this approach may be less practical than allowing open space parcels to have one dwelling unit on them, with a permanent easement that prohibits further subdivision or additional dwellings.

(An example in Virginia is Clarke County - in conjunction with sliding scale zoning. Typical overall density of 15+ acres per unit, with a maximum lot size of two acres per unit. The concept of a maximum lot size in a sliding scale subdivision in effect results in a cluster development. Montgomery County could consider adding such a provision to its existing sliding scale requirements).



3) Other localities that have used it and with what success

Some examples of Rural Cluster provisions in Virginia include:

Hanover . Mandatory rural cluster to obtain maximum permitted density. Sixteen clustered lots are permitted per each 100 acres with a minimum of 70% open space required. If cluster is not used, minimum lot size / density is 10 acres per dwelling in the agricultural zone.

Isle of Wight . Voluntary with density incentives. In order to get a higher density than the restrictive agricultural zone allows (about 40 acres per lot), the owner may cluster the subdivision lots and achieve a density of 1 per 10 acres if 50% of the tract is preserved in open space, 1 per 8 acres if 60% is preserved, and 1 per 5 acres if 70% is preserved.

Fauquier County. Fauquier Countys zoning ordinance permits cluster development in all of its single-family residential districts. In its two rural districts, cluster lots may be as small as 30,000 square feet, and at least 85% of the parcel must be preserved in permanent open space. Evaluation criteria are provided in the ordinance requiring the cluster subdivision to incorporate into the open space as many environmentally sensitive areas as possible and to take into account any scenic and/or historic resources on the site. The ordinance also requires that the developer of a cluster subdivision buffer the residences from existing agricultural uses.

Loudoun County. The current Loudoun County zoning ordinance permits voluntary clustered development in its A-3 rural zoning district through rural hamlet provisions. The rural hamlet arranges all or a portion of the density permitted on a parcel into one or more clusters of smaller lots. The hamlet concept is a cluster of lots of 1/3 acre or larger around a hamlet green, surrounded by common open space or larger, privately owned residential conservancy lots. Permanently eased open space must equal at least 85% of the total land area of the parcel, and can be located in non-building areas of the lots or in common open space. The ordinance contains detailed design criteria for rural hamlets. A larger Rural Village with a slightly higher density is permitted through a rezoning process.

[add a hamlet illustration here]

Loudoun County is currently holding public hearings on a revised zoning ordinance that would replace the rural hamlet provisions with new cluster provisions. The two new rural zoning AR-1 and AR-2 districts would have a conventional minimum lot size of 20 acres and 50 acres, respectively. The cluster option in AR-1 would permit cluster lots at minimum lot sizes of 10 acres with a minimum 70% open space set aside. In AR-2, the minimum lot size is 20 acres, with a minimum 85% open space set aside. Rather than the rural hamlet design provisions of the existing ordinance, the revised ordinance would require cluster subdivisions to use the ordinances new conservation subdivision design provisions.

These new provisions follow the principles of conservation subdivision design included in Randall Arendts 1996 book, Conservation Design for Subdivisions: A Practical Guide to Creating Open Space Networks. The purpose of this design process is to ensure that a propertys natural and historic features are preserved to the greatest extent during the layout of the subdivision. The ordinance outlines a mandatory design process that involves county review staff in the design process at an early stage and that ensures that the subdivision designers have identified all important natural and historic resources of the site and have maximized their preservation prior to submission of a subdivision plat to the county for formal review. Primary conservation areas, including steep slopes, river corridors, sensitive mountainside areas, must be preserved. Secondary conservation areas, including prime agricultural soils, forests, historic structures, scenic corridors and views, and planned greenways/trails, are to be protected if their protection does not require the landowner to exceed the total open space set aside requirement for the district.

[add an illustration of conservation subdivision design here]

The conservation design process is intended to assist the county in preserving its Green infrastructure, which consists of the primary and secondary conservation areas noted above. The countys Green Infrastructure policies are discussed further later in this report.

4) Summary of pros and cons of Rural Cluster Zoning

Potential advantages of Rural Cluster Zoning include:

May achieve essential County goals for resource preservation while still meeting the desires of rural landowners to obtain a high development value for their property.

May allow roads and dwellings to be sited with less disruption to views from the public road right-of-way and/or with greater buffer distances between neighboring properties.

May helps meet Countys need to protect its groundwater supply, yet does not overly restrict development potential because it may allow dwellings to be sited on smaller lots while the septic fields are dispersed into the surrounding open land.

May help to reduce the costs of development by requiring less grading and road construction, thus keeping housing costs to a minimum.

May provide greater capability for the County to retrofit communal water or sewer lines in the event that such facilities are ever necessary.

Potential disadvantages include:

Doesnt completely solve the problem of preserving agriculture or rural character, because it typically does allow development at the underlying zoning density. If such a cluster provision were applied to Montgomery Countys zoning agricultural zoning district, it would be more effective in this regard than in most other counties with conventional large lot zoning provisions, because the sliding scale regulations would prevent large impacts on the larger tracts. (although on smaller tracts, relatively high densities could still be achieved, even though clustered). On smaller tracts, even rural clustering may produce subdivision patterns that would produce more of a suburban landscape over the course of time and leave little opportunity, if any, for significant agricultural activities.

Market demand is uncertain for smaller lots surrounded by open space as opposed to larger individual lots. Developers often fear that smaller, clustered lots surrounded by permanent open space and protected views can not compete in the market against conventional, larger, estate lots because the demand for rural estates may be driven by the desire for privately controlled space, rather than for preserved views and convenient life style.

Additional design effort is required to lay out the cluster subdivision.

There are inherent conflicts in land use needs - good farmland is often the best for septic fields, causing conflicts between managing waste disposal and preserving good land.

Technical concerns - although many cluster ordinances have resolved most of the technical issues, concerns can still arise regarding such items as:

- Who will own and maintain the preserved open space that surrounds clustered lots?

(solution: allow it to be in large lots with permanent conservation easements prohibiting further subdivision)

- How will it be kept from being eventually developed, thus destroying the purpose of the cluster?

(solution: require permanent conservation easements prohibiting further subdivision)

- Who will maintain the roads?

(solution: require public roads or a strong Homeowners Association)

- How will water supply and wastewater disposal be handled?

(solution: allow off-lot septic easements; strict well requirements; community water systems)

d. Subdivision Regulations

There are various ways to restrict and control rural development through the use of the subdivision ordinance, either solely or in combination with the zoning ordinance. Two prominent examples include:

Incentives for Lower Density

This approach can take many different forms and use a wide range of provisions in various combinations. The basic concept is to establish more stringent requirements on rural subdivisions that have higher densities, and fewer requirements on those with lower densities. This can create a substantial difference in the cost and risk of subdividing at lower densities versus higher densities, and thus create a powerful incentive for landowners to choose to develop at a lower density. Examples of the kinds of provisions that can vary in accord with density in order to create these incentives include the following:

Road and Access Standards. Low density rural subdivisions can have less stringent standards for on site roads, including permitting private roads and/or access easements as opposed to state standard roads; low density subdivisions can also have less stringent road frontage requirements on public roads.

Hydrogeologic Testing. Low density rural subdivisions can be exempted from normal testing requirements for groundwater supply, or subject to less stringent requirements.

Review and Approval Procedures. Low density rural subdivisions can be exempted from the normal subdivision procedures or be subject to less stringent review procedures compared to regular subdivisions, thereby providing a quicker and cheaper approval process.

These and other subdivision requirements, when applied in carefully designed combinations, can create powerful incentives for landowners to voluntarily choose the lower density option. Note that a critical requirement of this approach, however, is that when the low density option is selected, a permanent open space easement that prohibits further subdivision of the tract must be recorded in conjunction with the final record plat.

Loudoun County is an example in Virginia of the use of Incentives for Lower Density.

Minor / Administrative Subdivision Restrictions

A variant on the idea of providing differential approval procedures for minor subdivisions is to restrict the number of lots that can be divided from the parent parcel in any one year time period using the minor subdivision process.

Examples in Virginia of Minor Subdivision timing restrictions include Augusta and Rockingham Counties. Augusta County, for example, has two agricultural zoning districts. One allows the owner to subdivide one lot per year from the entire contiguous tract. The other district allows the owner to subdivide one lot per year from each existing parcel. In either case, if the owner wants to subdivide more than a single lot at a time, he would have to receive a rezoning of the property to residential.

Fauquier County also has an administrative subdivision process originally enacted in 1968 to permit landowners to quickly sell a little land by allowing the creation of up to three lots per parcel with minimal county review and using private roads. The result was the steady creation of 10- to 30-acre subdivisions in scattered locations with private roads which homeowners have begun demanding be taken into the State system.

To address these problems, the Board of Supervisors recently amended the process to impose greater controls and to reduce the number of lots that can be created. The amendment reduces the number of lots that can be created from three to two in most zoning districts, including the countys rural districts. If remaining lots permitted under the density of the district are desired, the landowner must go through the regular preliminary and final plat review process. The county also retains its family subdivision process as an alternative to the administrative subdivision process.

Another variant on the minor subdivision process is family subdivision exemption. Some exemption for family subdivisions is required by state law, but localities have some latitude for regulating such divisions.

The Loudoun County, for example, in its Revised General Plan recognizes and supports the intent of the family subdivision statute to provide for small family lots on family farms and indicates that they will continue by-right. The plan recommends, however, that the amount of time the family member must retain ownership of the lot prior to resale be increased from the current one-year period to a five-year period, with a possible exception for estate sales. The Plan also recommends that the county provide a spin-off lot subdivision process similar to the administrative subdivision process in Fauquier County. As proposed, the spin-off lots would not be limited by a minimum lot size, could be clustered, and could be served by a private road, although the based density for the area must be maintained.


e. Density Transfer through Proffers in the Conditional Zoning Process

Density Transfer is a concept that was derived from the same principles as Transferable Development Rights (TDR), in which the right to develop one parcel of land is transferred to another parcel of land located elsewhere in the County. The purpose of such techniques is to preserve rural land while protecting the value of that rural land by allowing the rural landowner to sell the development rights from his land to a developer who owns land in an area more suitable for development.

Density Transfer is a way of circumventing the lack of enabling legislation for TDRs in Virginia. Density Transfer is accomplished by combining two tools that localities are currently permitted to use under existing provisions of the Virginia Code. These are conditional zoning and open space easement acquisition.

Density Transfer is accomplished by allowing (encouraging) applicants for a rezoning of land in designated urban areas to proffer permanent open space easements on farmland in designated rural areas, as part of the approval for the urban rezoning. In return for proffering the open space as a way of mitigating the impacts of the proposed development, the developer is then granted additional density than would otherwise be approved.

Effectively, this technique functions like a TDR program, except that it has to be voluntary because it relies on the conditional zoning process. However, if the density incentives established in the Comprehensive Plan to guide the review and approval of density transfers are sufficient, density transfer has the potential to be an effective rural land preservation tool.

The only example of using density transfer for farmland preservation in Virginia is in Loudoun County which saved a few thousand acres through this program during the 1980s.

The main disadvantage to the program which has constrained its success in Loudoun, is that a developer will tend to proffer on-site amenities that will not only satisfy County policies but will also help market his development, rather than proffer open space that may be located miles from the site and thus provide little if any benefit to the development project itself. The developer will tend to make proffers of roads, school sites and other infrastructure, and the County will tend to accept these, as a practical matter, rather than push for open space preservation at the expense of such practical amenities.

Given the complexities and difficulty of implementation, Density Transfer is not worthy of a significant effort by Montgomery County at this time.




f. Transferable Development Rights (TDR)

A formal TDR program is not available under current Virginia enabling legislation. For many years, many local governments in Virginia have asked the General Assembly to permit a pilot program, but no avail.

A TDR program allows landowners to transfer the right to develop one parcel of land to another parcel of land located elsewhere in the County. The transfer must be ma