Montgomery County approves $5 million for agricultural reserve
Washington Business Journal
The Montgomery County Council has allocated $5 million for the county’s latest piece of agricultural legislation, a program aimed at sustaining the county’s 93,000-acre agricultural reserve in perpetuity.
The building lot termination program, as with many such programs before it, is designed to compensate farmers for keeping their land as agricultural property instead of selling it to developers.
They are paid for the development rights on the land, about a third of the county.
The difference between the BLT program and its predecessors is that the BLT program only allows a one-time purchase of development potential. It also allows for bidding, which could up the ante, giving farmers more money for their land.
Under the new program, the county executive will establish an annual price for lots with development rights based on comparable appraisals in the reserve. One BLT equals 5 acres, though the county only plans to buy easements on properties larger than 50 acres.
The price set by the county executive will be the maximum the county will pay and the likely starting price for private developers.
The county has not yet completed its BLT buying criteria, but plans to evaluate land based on several factors such as soil quality, the number of lots for sale and whether lots are contiguous.
One BLT will allow a developer in a transit-oriented mixed-use zone to increase a project’s density by 12.5 percent.
If a development company needs a smaller density increase than 12.5 percent, it can write a check to the fund for a proportional amount. The county will then use the private money for more of its own BLT purchases.
“With the BLT program we’ll have the easements in place that will make sure people can farm this land for the rest of this county’s future. It will get rid of last buildable elements,” said Councilman Mike Knapp, D-District 2
Councilman George Leventhal, D-At large, highlighted the lack of public knowledge of programs aimed at preserving agricultural land and called the board’s unanimous approval of the appropriation a “down payment” on the county’s commitment to saving the reserve.
The first rural density rules, established some 30 years ago in the northern portion of the county allowed one house for every 5 acres. The rules changed in 1981, turning protected farmland into an agricultural zone or a rural density transfer zone that allowed only one house per 25 acres.
But farmers wanted to recover the value of the lost development potential. Thus, the transferable development rights program was born in 1982. TDRs allow agricultural land owners to sell their development rights to developers, who use them to increase the density of projects in other parts of the county. One TDR equals 5 acres and one additional residence above base zone density.
The Agricultural Easement Program, created in 1987 and funded by the county, and the Maryland Agricultural Land Preservation Foundation, a state and county partnership formed in 1977, are two other programs that allow the county to purchase easements from farmers. Those initiatives and other public programs added 70,000 acres of protected land to the reserve between 1980 and 2008, but left some development potential in the property.
At the program’s peak, TDRs fetched up to $40,000 each, but when the economy deteriorated and development pipelines in other portions of the county stalled, the demand for TDRs slumped.
The BLT program, planned to be a self-sustaining system, is making its first appearances in master plans the council is considering, namely the White Flint Sector Plan and the Gaithersburg West Masterplan.
Developers with major redevelopment plans in the two areas would be among the first to purchase BLTs in exchange for greater density.
And though Montgomery County’s 561 farms and 350 horticultural enterprises are eager to reap the benefits of the program, developers are less keen on making additional payments for developments in the county.
Currently, developers with projects near Metro pay school impact taxes, transportation impact taxes, traffic mitigation and school facility payments that total about $8,203 per multifamily high-rise unit, 16,988 per multifamily garden unit, $25,372 for each single-family attached house and $34,050 for a single-family detached home.
“Developers have rightly pointed out the concept of the development parfait which is the layering on of different things they are expected to pay for,” Knapp said.
The county is left to juggle its priorities — transit-oriented development, schools, economic development and preserving its open space.
The council will finalize the BLT program by the end of January.
