Amicus Curiae Brief — Suitum v. Tahoe Regional Planning Agency

Table of Contents

Page

TABLE OF AUTHORITIES . .............ceeseeees ii

STATEMENT OF INTEREST ...................05: l

INTRODUCTION AND

SUMMARY OF ARGUMENT ........ ined aaeinenes 2

SE tdcbe S64Gn6GR beeNesceccesercsevcces 5

I TDR Programs Are a Valuable Tool for Making

Land Use Regulation Fairer and More Effective... . 5

A. The Promise of TDR Programs.............. 5

B. TDR Programs Are Effective

Se eee 8

Il. Petitioner's Proposed Constitutional Rule

Would Favor Traditional Low Density

Zoning, Encourage Sprawl and Perpetuate

PG Cha aURSURRheRSSeSeeceebedeseccece.s 12

III. Unequal Impacts on Different Landowners Are

an Inevitable Consequence of Reasonable and

Necessary Land Use Regulations Which TDR

Programs Can Help Mitigate ................. 15

IV Urban Sprawl Imposes Substantial Economic

and Social Costs on the Public as Well as

Private Citizens and Firms................... 22

cceeeka wave eccdsedvivevescuvecese 28

ii

Table of Authorities

Page

Cases

Adolph v. Federal Emergency Management Agency,

O54 F.28 732 (i Ch. IUGR. . oss cccaddeeseeeeee 16

Agins v. City of Tiburon, 447 U.S. 255 (1980) .......... 13

April v. City of Broken Arrow, 775 P.2d 1347

Pe eer Pe 17

First Lutheran Church v. Los Angeles County,

S62 U.S. 306 (1SGF).. oe vcccasdedaugeieneae 15

First Lutheran Church v. Los Angeles County,

210 Cal. App. 3d 1353, 258 Cal. Rptr. 893 (1989),

cert. denied, 493 U.S. 1056 (1990)... 2.0... cece. 16

Foreman v. State Department of Natural Resources,

367 WN.226 455 Gab. ITED... sccctsaccuse ee 17

Goldblatt v. Hempstead, 369 U.S. 590 (1962) .......... 13

Keystone Bituminous Coal Assn. v. DeBenedictis,

SSO U.S. S70 (0GBF) .. o's 5000 cceu uw 13

Lucas v. South Carolina Coastal Council,

JUS U.S. 16GB CRGEED.. «occ cecnadeunee 13, 16

Penn Central Transportation v. City of New York,

SOS US. 106 (IDTED.. cc cvccccceseaseseee 12

Pope v. City of Atlanta, 242 Ga. 331, 249 S.E.2d 16

(1978), cert. denied, 440 U.S. 936 (1979) .............. 17

ili

Usdin v. State Department of Environmental Protection,

173 N.J. Super 311, 414 A.2d 280 (1980)...........-. 17

Village of Euclid v. Ambler Realty Co.,

tes cod epectbceccccoccce §, 13

Statutes and Regulations

N.J. Parks and Recreation Act of 1978, 16 U.S.C. §4711 ..9

State Pinelands Protection Act,

as ce sceseoccccces 9

Miscellaneous

Abrams, Stanley D., "Flexible Zoning Techniques to

Meet State and Local Growth Policies," C930 ALI-ABA

GIP CIIIDD ov cc ccccccccccccccvcccccccvccccccccees 28

Asabere, Paul & Peter Colwell, "Zoning and the Value

of Urban Land,” 8 Real Estate Issues 22-27 (1984)...... 19

The Baltimore Sun, (Feb. 18, 1996),

1996 WL 6605863 ... 2.6... cece cece rere weer eereeee 28

Bank of America, et al., Beyond Sprawl, New

Patterns of Growth to Fit the New California (1995) . . 22, 24

Beaton, P.W., "The Impact of Regional Land-Use

Controls on Property Values: The Case of the

New Jersey Pinelands,” 67 Land Economics 172 (1991) . . 21

Beaton, P.W. & M. Pollock, "Economic Impacts of

Growth Management Policies Surrounding the

Chesapeake Bay,” 68 Land Economics 434-53 (1992) .. . .21

iv

Burchell, Robert W. and David Listokin, The Economic

Effects of Trend Versus Vison Growth in the Lexington

Metropolitan Area, Report prepared for Bluegrass

Tomorrow, Lexington, KY (1994). .................. 24

Burchell, Robert W., et. al., Impact Assessment of the

New Jersey Interim State Development Plan, Report III:

Supplemental Al PLAN Assessment, Report Prepared for

the New Jersey Office of State Planning, Trenton, New

SS ebcesskcenendsdacebenedadsesotenesce 24

Burchell, Robert W., William Dolphin and Harvey S.

Moskowitz, Jmpact Assessment of DELP CCMP Versus

Status Quo on Twelve Municipalities in the DEP Region,

Report prepared for the Deleware Esutuary Program,

PURINE, DUR GIOEED s cc ccccccoeccccccocesoccess 25

Chiocine, David L., "Farmland Values at the Urban

Fringe: An Analysis of Sale Prices," 57 Land

FS er ee 19

Cohn-Lee, R.G. & D.M. Cameron, "Urban Stormwater

Runoff contamination of the Chesapeake Bay: Cources

and Mitigation," 14 Environmental Professional 10-27

daecicteisundebetsucnsetsanteabeseciuesas 27

Egan, T., "Drawing the Hard Line of

Urban Sprawl,” The New York Times,

8 ee 22, 23

Egan, T., The New York Times,

ANS duddhbcnabactccoeceseoces 22, 23. 27

Ewing, Reid, "Is Los Angeles Style Sprawl

Desirable?,” 63 J. Am. Pla. Ass. 107-126............. .23

Force, Floodplain Management in the United States,

Wa 0 i iid i ch tee Chadcktdeds dvctedawececes 6

Federal Interagency Floodplain Management Task Force,

Floodplain Management in the United States:

An Assessment Report, Vol. 2 (1992) .......----0-+45 16

Frank, J.E., The Costs of Alternative Development

Patterns: A Review of the Literature, Urban Land

RRO oo vc ddecsddccnccseccceteceseos: 24, 25

Johnson, E.W. , Avoiding the Collision of Cities and Cars:

Urban Transportation Policy for the Twenty-First Century,

Report of a Study Project sponsored by the American

Academy of Sciences in cooperation with the Aspen

Re IETE oo cc cccacecccccccescccccccccccccce 26

Katz, Lawrence & Kenneth Rosen, "The

Interjurisdictional Effects of Growth Controls on

House Prices,” 30 Journal of Law and Economics

REDD AISEED 0 oc ccccctdcssccssodoccocececcccccess 5

Klein, R.D., "Urbanizationand Stream Water Quality,”

15 Water Resources Bulletin 4 (1979)... .. 2... 620-055 27

Leinberger, Christopher, "Metropolitan Developoment

Trends of the Late 1990s: Social and Environmental

Implication,” in H.L. Diamond and P. Noonan,

Land Use in America (1996) ..... 2... 60 e cece eee eces 23

Lemly, J.H., Expressway Influences on Land Use and

Value: Atlanta 1941-1956. Report to the State

Highway Department of Georgia. Bureau of Business

Research, Georgia State College (1958) ..............-- 18

Lincoln Institute of Land Policy, Alternatives to Sprawl

BE vc ccbecceccccesdvorssecsecscecescucuceece 23

vi

Michael, H.J., et al, Water Quality Affects Property

Prices: A Case Study of Selected Maine Lakes (1996)... .. . 7

New Jersey Pinelands Commission, Pinelands

Development Credits: A Landowner's Guide, (1981) . . App.

McMillen, Daniel P. & John F. McDonald,

"Urban Land Value Functions with Endogenous

Zoning,” 29 J. Urb. Econ. 14-27 (1991)... . 2.2.0.2... 19

Nelson, John, "Residential Choice, Hedonic Prices

and the Demand for Urban Air Quality,”

5 J. Urban Econ. 357-69 (1978) . 2... ccc ee ee wees 7

New Jersey Pinelands Commission, Pinelands

Development Credits, Summary Report,

Through December 31, 1995 (1996) .......... 9, 10, App.

New York Regional Plan Association,

The Region Tomorrow (1990)... . 2.2... ccc cee eee 23

Nicholas, J., A Report to the Pine Barrens Credit

Clearinghouse on Value of Devlopment Rights

Within the Towns of Brookhaven, Riverhead, and

a ee 12

Platt, R.H., Land Use and Society, Geography,

Law and Public Policy (1996) ........ 0.2.0.0. 5, 22, 23

Ridker, R.G. & J.A. Henning, “Determinant of

Residential Property Values with Special Reference

to Air Pollution,” Rev. Econ. Stat. 246-259 (1967) ....... 7

Roddewig, R. & C. Ingraham, Transferable

Development Rights Programs (1987) ................ 11

vii

Shuffett, M. & J. Hoskins, "Capitalization of Burley

Tobacco Allotment Rights into Farmland Values,”

51 American Journal of Agricultural Economics

FN PTOI TTT ELTL ELT LET LL TET Tee 18

Segal, David & Philip Srinivasan, "Impact of Suburban

Growth Restrictions on Urban Housing Price Inflation

1975-1978," 6 Urban Geography 14-26 (1985).......... 5

U.S. Department of Agriculture, Soil Conservation

Service, 1992 National Resources Inventory ............ 27

U.S. Department of the Interior, Draft

Environmental Impact Statement, Proposed

Comprehensive Management Plan for the

Pinelands National Preserve (undated) ........... 9, App.

U.S. Department of Transportation, Social and

Economic Effects of Highways (1974) ........ 6... 0005: 18

U.S. Congress Office of Technology Assessment,

Saving Energy in U.S. Transportation (1994) ........ 25, 26

U.S. General Accounting Office, Traffic Congestion:

Trends, Measures and Effects (1988) ..........-.0555: 26

Vantreese, V.L., M.R. Reed & J.R. Skees, "Mandatory

Production Controls and Asset VAlues: A Case Study

of Burley Tobacco Quotas," 70 Amerian Journal of

Agricultural Economics 319-25 (1989) ..........0000+: 19

von Thunen, J.H., The Isolated State (1826)............ 18

: In The

Supreme Court of the Gnited States

October Term, 1996

No. 96-243

BERNADINE SUITUM,

Petitioner,

v.

TAHOE REGIONAL PLANNING AGENCY,

Respondent.

On Writ of Certiorari to the United

States Court of Appeals for the Ninth Circuit

BRIEF OF DR. STEVEN BERRY, DR. ROBERT

BURCHELL, DR. ROBERT CERVERO, DR. ROBERT

CONSTANZA, DR. BENJAMIN CHINITZ, DR.

ROBERT HEALY, DR. JOHN KEENE, DR. DAVID

LISTOKIN, DR. JAMES NICHOLAS, DR. C. FORD

RUNGE AND MR. RICHARD TUSTIAN AS AMICI

CURIAE IN SUPPORT OF RESPONDENT

STATEMENT OF INTEREST

Pursuant to Supreme Court Rule 37, we file this brief

with the consent of the parties as amici curiae in support of

respondent Lake Tahoe Regional Planning Agency.'

| Letters from the parties consenting to the filing of this

brief have been filed with the Clerk of Court.

Amici are economists with expertise in land use and

regulated markets. They have an interest in helping this

Court to understand the economic results of existing and

proposed takings rules. Many amici have "in the trenches"

experience in the effort to make land use regulations both

more efficient and more equitable.

INTRODUCTION AND SUMMARY OF ARGUMENT

This brief is submitted by economists with e ise in

Nyt pects rsh tpt opts npr

analysis which may be of assistance to the Courtin resolving

this case. A fundamental issue in this case is whether the

value of a Transferable Development Right (“TDR”) should

“count” in deciding the threshold question of whether a land

use regulation does not effect a taking requiring the payment

of Just compensation under the Fifth Amendment. Amici

believe that, from the standpoint of sound economic policy,

the answer should be “yes.”

TDR programs provide a valuable market mechanism

for improving upon both the effectiveness and equity of

traditional land use regulations. Traditional land use

regulations reflect a serious conflict between the legitimate

need of State and local governments to regulate land uses to

. Steve Berry, Yale University

- Robert Burchell, Rutgers University

. Robert Cervero, University of Califronia at Berkeley

i

|

HEE

HH

E

»D versity

Keene, University of Pennsylvania

. David Listokin, Rutgers University

James Nicholas, University of Florida

. Cc. Ford Runge, University of Minnesota

- Richard Tustian, University of Pennsylvania

:

SP9ygyy!

address important public concerns and the legitimate

interests of individual landowners in reaping the financial

rewards of land ownership. To balance these interests,

traditional land use programs often severely limit

development in certain parts of the community or on certain

types of land, while at the same time attempting to

accommodate at least some development on each parcel to

avoid potential takings liability. The result is a land use

regulatory system which has failed to adequately control the

location of development, producing economically inefficient

"sprawl" development patterns, serious public safety

problems such as excessive flooding, and losses of valuable

environmental resources. At the same time, the current

system has sometimes produced significantly unequal and

severe effects on different landowners.

Transfer of Development Rights programs offer a

market-based tool for mitigating this conflict. By severing

the issue of the appropriateness of restrictions on land use to

achieve important public purposes from the issue of the

owner's entitlement to an equitable share of the community's

total development potential, TDR programs provide the

opportunity to both accomplish the goals of effective

regulation and achieve greater equity. Unequal economic

impact is a necessary and unavoidable consequence of

appropriate land use regulation because it would not be

socially beneficial to allow all lands to be developed to the

same degree. Even the same rule affects different properties

differently because of their different physical characteristics,

proximity to infrastructure and market conditions. TDR

programs provide a mechanism for improving upon the

fairness of the current land use system through more similar

treatment of landowners while allowing for necessary

differences in the regulation of different lands. As discussed

below, the promise of TDR programs is confirmed by

extensive experience around the country with functioning

TDR markets that yield substantial economic benefits to

landowners.

Petitioner proposes that the takings clause be read to

require sharply different treatment of TDR programs which

achieve the same or greater equity as traditional zoning

density controls. Under this view, traditional density

controls on land use would continue to be constitutional,

despite the fact such controls frequently have widely

unequal impact on different landowners, but TDR programs

would be of no value to State and local officials in avoiding

constitutional takings judgments. As a result, they would

have a strong incentive to continue to rely on traditional

density controls and perpetuate the conflict of interests

described above.

The continued reliance on density controls to address

land use concerns, which do not reduce the magnitude of

development but simply spread it out, would exacerbate the

dispersal of development or “urban sprawl.” Recent

economic studies and reports document the high public and

private financial costs of sprawl Providing public services

to dispersed communities is significantly more costly than

providing those services to concentrated communities. Other

recent studies have attributed to this land use pattern part of

the responsibility for the increasing costs of congested

transit systems, air and water pollution, and loss of prime

farmland and natural resources.

ARGUMENT

I. TDR Programs Are a Valuable Tool for Making

Land Use Regulation Fairer and More Effective.

A. The Promise of TDR Programs.

Our nation’s current land use practices and policies

often reflect a collision between competing values. On the

one hand, to address the financial, social, and environmental

costs of some land development, state and local governments

have imposed land use regulations that, like many other

government actions, can have highly differential economic

impacts. On the other hand, our social values -- and the

language of the Bill of Rights -- require careful consideration

of the property interests of those individuals or firms who

may be disproportionately affected by land use regulation.

These competing forces have created a situation which

can be less than optimal from both social and individual

standpoints. Faced with the desire to limit demand for new

government services, and limit the impact of development on

existing communities, while assuring some economic use for

each landowner, land use regulations have relied heavily on

density controls.’ These controls limit the permitted amount

of development on a per acre basis. As discussed in more

depth below, see Section IV, the effect of density restrictions

has been to spread out development in a manner that has

been recognized to have high economic and social costs. At

the same time, these regulatory systems have left little or no

3 “Euclidian zoning” named after the form of zoning approved in

Village of Euclid v. Ambler Realty Co., 272 U.S. 365 (1926), is the

dominant land use regulatory approach across the country. See Platt,

R.H., Land Use and Society: Geography, Law & Public Policy 215-48

(1996). Zoning regulates the density of development, the dimensions

or bulk of buildings with minimum lot sizes. /d. at 235.

role for markets to encourage development in those locations

where development is most valuable.

Land use regulations have also recognized the different

physical attributes of land and the economic, health and

environmental costs involved in the development of such

areas as floodplains and coastal erosion zones, fire hazard

zones, and areas where development can disproportionately

contribute to water pollution, such as wetlands and riparian

zones. But lacking alternative tools to create equity,

officials often permit some limited development in sensitive

areas such as flood hazard zones that undermine the goals of

the regulation. (For example, flood damages have risen

steadily, even on a per capita basis adjusted for inflation,

over the last fifty years despite some restrictions on new

development in flood areas. See The Federal Interagency

Floodplain Management Task Force, Floodplain

Management in the United States, Vol. 1, Summary at 17

(1992).

On the other hand, the current land use regulatory

system often has uneven impacts on different landowners,

and has probably helped spawn increasing litigation over the

“takings” question. Some development for all does not mean

equal economic impacts. Moreover, the inherent limitations

of density controls as a tool for addressing development

costs tend to lead local officials in the direction of applying

this tool more and more aggressively in an effort to make it

work -- to attempt to reduce new development to the

minimum, instead of to attempt to channel that development

into places where it can be more easily serviced.

Traditional land use tools that spread development

may be less productive of aggregate property values than

alternative regulatory mechanisms such as TDR's that

concentrate development or restrict it in sensitive areas while

encouraging it in others. A number of studies have revealed

that environmental amenities, such as water and air quality --

whose protection has motivated land use restrictions -- can

indeed enhance the private property values of residential

communities.‘ Studies have also shown that development

restrictions tend to trigger increases in property value of

developable properties, and local officials could reasonably

conclude that growth restrictions are a sound strategy for

increasing local property values as a whole.’ The equity

problem arises, of course, because the restricted property

owner may not share in this increase.

Transferable Development Rights provide a quasi-

market solution to this paradox that has the potential to

accomplish more effectively the goals of land use regulations

while also increasing their fairness. By allowing a parcel’s

development potential to be severed and sold separately

from the land itself, TDR programs offer officials an escape

from the problem that limiting development on some land

now also means limiting the development rights of the

landowner. Instead, TDR programs can pursue development

restrictions where they make sense and offer landowners a

fair share of community development rights on condition

that some or all of those rights be exercised off-site.

4 Fora recent example of studies showing how improved water

quality increases the value of lakefront property, see H.J. Michael, er

al, Water Quality Affects Property Prices: A Case Study of Selected

Maine Lakes (1996) (demonstrating association between lake water

quality and lake front property). Studies showing strong relationships

between property valuess and air pollution include R.G. Ridker & J.A.

Henning, "Determinants of Residential Property Values with Special

Reference to Air Pollution,” Rev. Econ. Stat. 246-259 (1967); John

Nelson, "Residential Choice, Hedonic Prices and the Demand for Urban

Air Quality,” 5 J. Urb. Econ. 357-69 (1978).

See, e.g., Katz, Lawrence & Kenneth Rosen, “The

Interjurisdictional Effects of Growth Controls on House Prices,” 30

Journal of Law and Economics 149-60 (1987); David Segal & Philip

Srinivasan, “Impact of Suburban Growth Restrictions on Urban

Housing Price Inflation 1975-1978,” 6 Urban Geography 14-26 (1985).

In most TDR programs, landowners retain all the rights

of landownership, including the right to exclude others,

except that they must exercise some or all of their

development rights elsewhere in the community. They have

a market for TDR’s because developers in growth zones --

instead simply of receiving a windfall from the restrictions

on others -- must purchase development rights from

landowners in restricted zones to avail themselves of the

opportunity for greater development. In this way, the

property-enhancing value of restrictions is shared among

restricted and unrestricted landowners because the value of

TDR’s will increase as the value of development increases in

the community as a whole.

TDR programs also create an opportunity to exploit

the efficiencies inherent in marketplace transactions among

private parties. By designating growth zones where different

parcels can freely compete in the market for development

rights, they create areas where market forces, and not

regulatory restrictions, will determine the precise locations

where development rights are exercised.

B. TDR Programs Are Effective in Practice.

Across the country, there are numerous examples of

substantial Transferable Development Rights programs

which are actually operating and providing substantial

returns to owners of restricted lands. Contrary to the

contention of the petitioner in this case that TDR programs

represent a “sham,” actual experience demonstrates that

these programs have succeeded in improving both the

effectiveness and fairness of State and local regulatory

programs.

THE NEW JERSEY PINELANDS. The New Jersey

Pinelands is a 1.1 million region of southern New Jersey.

The United States Congress and the New Jersey Legislature

passed legislation calling for the protection, preservation and

enhancement of the unique ecological, cultural, educational,

agricultural, scenic, recreational and public health values of

the Pinelands. See N.J. Parks and Recreation Act of 1978,

§502(a)(c), 16 U.S.C. §4711; State Pinelands Protection Act,

N.J. Stat.Ann.Sec. 13:18A-2. The goal of the resulting

Comprehensive Management Plan was to manage these

important resources, with a minimal roll for public

acquisition. The Pinelands was not simply an

environmental preserve. The 1980 population within the

area of the Pinelands amounted to 559,454.’ By 1990 this

population had grown to 699,778," and increase of 25%.

The region produces approximately 24% of New Jersey's

total agricultural income,’ with cranberries and blueberries

The Pinelands management plan divided the total region

into five districts: the Preservation Area, the Forest Area, the

Agricultural Production Districts, the Rural Development

Districts, and the Regional Growth Districts. One of the

components of the plan was restricting development of much

of the ecologically sensitive property within the Preserva-

tion, Forest and Agricultural Production districts. At the

same time, the Plan announced a Transferable Development

Rights program to reduce the impacts of the plan on

6 The total amount designated for acquisition is $26 million from

the federal government with a 25% state match. The total would be

$32.5 million for land acquisition. See U.S. Dept. of the Interior,

Draft Environmental Impact Statement, Proposed Comprehensive

Management Plan for the Pinelands National Preserve 3.4 (Undated)

7. New Jersey Pinelands Commission, Pinelands Development

Credits, Survey Report Through December 3], 1995 (1996).

8. Ibid

9. Ibid, p. 5.22.

10

property values, especially within the Preservation and

Forest Areas.

The “Pinelands Development Credits” program has

now been in place for 14 years, and data on the program’s

implementation demonstrate the program’s success in

ensuring a reasonaole return to landowners in the restricted

areas. See New Jersey Pinelands Commission, Pinelands

Development Credits, Summary Report, Through December

31, 1995 (1996). Since inception, 4,232 development rights

have been “severed” under the PDC program, resulting in the

protection of 12,969 acres of land within the district. The

owners of these “protected” areas retained, in addition to the

opportunity to sell development rights, the right to engage in

certain land uses, such as agricultural activities. Table 1 and 2

in the Appendix summarize activity to date under the PDC

program.

The average price paid for a development right was

$3239, with a maximum of $5650 and a minimum of $1750.

The allocation of 4,232 transferable rights equates to a

projected $12,700,176 in value. The value per acre for trans-

ferred development rights was approximately $1,000. The

number of rights allocated, the average price per development

right, and the projected total value of the development rights

sold, by year, are shown in Table 3 in the Appendix.

MONTGOMERY COUNTY, MARYLAND.

Montgomery County is located immediately north-west of

the District of Columbia. It comprises a land area of about

Sandie meas in ce ee

800,000 people. Its population has grown rapidly and

consistently over the past 40 years.

In 1969, the County Council adopted a General Plan,

called "Wedges and Corridors," to accommodate growth in a

central corridor pattern and preserve the adjacent "wedge"

ll

areas for rural, agricultural, and open space uses. The goal of

the plan is to accommodate urban growth in an efficient and

cost effective manner, while also maintaining the quality of

the natural environment to the maximum extent possible.

By the late 1970's, the pressure to build scattered

residential subdivisions in the wedge areas was threatening

the continuing viability of the General Plan, and the county's

remaining agricultural industry was in danger of erosion and

flight from the area. In response, the county established a

110,000 acre Agricultural Reserve and other related

regulations to help preserve the agricultural industry and

achieve the concentrated development goals of the plan.

Lands within this reserve were downzoned from one

dwelling unit per five acres to one dwelling unit per 25 acres.

In return, owners were allocated one TDR for each five acres

of land.

In the fifteen years this program has been in operation,

over 5,000 TDR's have been sold and transferred. TDRs are

now an accepted element of the real estate market in

Montgomery County. Since 1981, the initial price of about

$5,000 per TDR has risen to today's average of about

$11,000 per TDR. With each transferred TDR putting 5

acres of reserve land under easement, this equates to a selling

price of over $2,000 per acre. (Data provided by Richard

Tustian. See also R. Roddewig & C. Ingraham, Transferable

Development Rights Programs (1987)).

SANTA MONICA MOUNTAINS. The California

Coastal Conservancy administers a TDR program on behalf

of the California Coastal Commission. This program does

not issue a prescribed number of rights per land unit. Rather,

Transferable Development Rights were allocated to property

based upon the "developability” of the property. TDR

allocation could be as much as one per acre or less, depending

12

on the property’s "developability." The rights initially sold

for as much as $43,000 per right, with rights later selling in

\ the mid-$30,000 range. Jbid.

. THE LONG ISLAND PINE BARRENS. A Central

Pine Barrens Joint Planning and Policy Commission was

created to develop means of protecting the pine barrens that

are environmentally necessary to Long Island. One

component of this program is a Transfer of Development

Rights program.

The Pine Barrens program allocates rights to the

owners of property within the Pine Barrens generally on the

basis of the prior zoning. These rights can then be used to

increase residential density within "receiving areas"

designated by the three Towns -- Brookhaven, Riverhead,

and Southampton. This program was adopted in June, 1996.

Initial estimates are that these rights will command prices in

the $12,000 range. Depending on the prior zoning, the

market value of the rights is expected to be between $12,000

and $2,500 to $3,000 per acre. See Nicholas, J., A Report to

the Pine Barrens Credit Clearinghouse on the Value of

Development Rights Within the Towns of Brookhaven,

Riverhead, and Southampton (1996).

IL _ Petitioner’s Proposed Constitutional Rule Would

Favor Traditional Low Density Zoning, Encourage

Sprawl and Perpetuate Inequity.

Petitioner contends that the value of a Transferable

Development Right should “count” for the purpose of a

takings claim, if at all, only in determining what portion of

“Just compensat' yn” a takings claimant might have received.

Contrary to tne established precedent established by this

Court, see Penn Central Transportation v. City of New York,

13

438 U.S. 104 (1978), petitioner maintains that the value of

the TDR “stick” in the property owner’s bundle of rights

should not be considered in assessing the economic impact of

this type of regulatory program on the owner’s property as

a whole.

This new approach to the treatment of TDR programs

under the takings clause would treat land use programs that

rely on Tradeable Development Rights dramatically

differently from programs that rely on traditional low

density zoning controls. For a variety of sound reasons

discussed below, the Court has always recognized that “the

property owner necessarily expects the uses of his property

to be restricted, from time to time, by various measures

newly enacted by the State in legitimate exercise of its police

powers.” Lucas v. South Carolina Coastal Council, 505

U.S. 1028, 1027 (1992). Accordingly, in the land use

context, the Court has repeatedly recognized that significant

limitations on both the character and density of development

are entirely consistent with the Constitution, even if they

significantly reduce the value the property would have if

unrestricted. See, e.g., Agins v. City of Tiburon, 447 U.S. 255

(1980) (rejecting takings challenge to restriction of one

building to five acres which allegedly reduced property value

by 85%); Goldblatt v. Hempstead, 369 U.S. 590 (1962)

(upholding a town regulation that barred continued operation

of an existing sand and gravel operation in order to protect

public safety ); Euclid v. Ambler Realty Co., 272 U.S. 365

(1926) (rejecting takings challenge to zoning restrictions

which allegedly reduced the value of property by 75%); see

generally Keystone Bituminous Coal Assn. V. DeBenedictis,

480 U.S. 470, 489 n.18 (1987) (“[T]he Court has repeatedly

upheld regulations that destroy or adversely affect real

property interests.”). By contrast, petitioner’s theory

would hold unconstitutional TDR programs even when those

programs provide greater economic value for landowners and

14

An example illustrates this anomalous differential

treatment. According to established law, zoning density

restrictions that limited the number of residential units on a

per acre basis and, for example, “reduced” the potential

development value of the property by 50%, would not be

found to be a taking. On the other hand, under petitioner’s

theory, a Transfer of Development Rights program that had

the same 50% economic impact, except that the owner’s

development rights could only be exploited off site rather

than on site, would be found to be a taking. Implementing a

TDR program would therefore result in heavy fiscal liability

for State and local officials. Allowing state and local

governments to offset the value of the TDR against their

taking liability, as petitioner proposes, would not alter the

fact that the petitioner's rule would create takings liability for

the TDR program and not for the traditional system with the

same, or even greater economic effects.

Faced with such discriminatory constitutional

treatment of TDR programs, State and local officials would

be forced to continue their present heavy reliance on low

density zoning that does not reduce overall development but

simply spreads it out. The likely result of petitioner's

takings rule would therefore be more urban sprawl, and its

associated increase in the costs of providing public

infrastructure such as roads and essential public services,

such as fire and ambulance protection and schooling.

Attempting to develop TDR programs that also would

guarantee some intensive development of each parcel would

not provide an effective solution to sprawl. Guaranteeing

development of each parcel would deprive TDR’s of their

utility for limiting sprawl and other unwanted forms of

development, and indeed would encourage scattered

development leading to more sprawl. Furthermore, if

petitioner's theory were adopted, efforts to concentrate

15

development, even where they produce aggregate increases in

property values, would be less likely.

Finally, adoption of petitioner's theory would

perpetuate the inequ.iies inherent in the traditional land use

regulatory system by forcing State and local officials to rely

heavily on density controls, which force them into pursuing

policies with unequal impacts in order to achieve necessary

and important public objectives.

I. Unequal Impacts on Different Landowners Are an

Inevitable Consequence of Reasonable and

Necessary Land Use Regulations Which TDR

Programs Can Help Mitigate.

For a variety of basic economic reasons, land use

regulations inevitably have different economic impacts on

different landowners that are beyond the reach of the takings

clause. These inherently uneven impacts occur not merely

because different types and levels of restrictions are

appropriate for different properties but because the same

restrictions can have dramatically different economic impacts

on different lands. Many of these inequities can be at least

partially addressed by TDR's. If, as petitioner contends,

TDR's cannot be considered in making a takings

determination, TDR's would have essentially no value to

State and local governments for achieving greater equity

while pursuing important public policies. In other words,

petitioner's proposed takings rule, rather than advancing the

equity concerns animating the takings clause, would more

likely undermine efforts to address these concerns.

Regulations have differential impacts on different

landowners in part because, as the Court has recognized on

various occasions, legitimate police power concerns warrant

different degrees of regulation of lands that have different

physical characteristics. For example, in First Lutheran

16

Church v. Los Angeles County, 482 U.S. 304 (1987),

Justices Blackmun, O’Connor, and Stevens recognized that a

regulation prohibiting hazardous development in a floodplain

is almost certainly not a taking whatever its economic

impact. See also First Lutheran Church v. Los Angeles, 210

Cal. App. 3d 1353, 1370, 258 Cal. Rptr. 893 (1989), cert.

denied, 493 U.S. 1056 (1990) (finding no taking on remand).

Similarly, as Justice Kennedy noted in his concurring opinion

in Lucas v. South Carolina Coastal Council, 505 U.S. 1001,

1035 (1992): “Coastal property may present such unique

concerns for a fragile land system that the State can go

further in regulating its development and use than the

common law of nuisance might otherwise permit.”

Some of these incontrovertibly necessary and valid

restrictions are widespread. More than 80% of communities

in the United States heavily restrict development in

floodplains, including prohibition of virtually all

development in the most fast-moving area of flood waters. '°

And these restrictions have been broadly upheld even when

they appeared to reduce the value of property

significantly.'' Development is also routinely prohibited or

10 ‘See Federal Interagency Floodplain Management Task Force,

Floodplain Management in the United States: An Assessment Report,

Vol. 2 at 6-23, Table 6-3 (1992) (revealing that 82% of all

communities with flood hazard areas participated in the federal flood

insurance program). The minimum requirements of the federal flood

significant fill in the floodway, the fast-moving portion of floodplains,

and requiring that structures be elevated on stilts or otherwise protected

against flooding in the remainder of the 100 year floodplain for 100

year floods. /d at 11-8, 11-9. These restrictions appear to be highly

successful in reducing flood damages in that structures built after

promulgation of the regulations have made flood insurance claims less

than one quarter as frequently as pre-regulation structures. /d at Vol. I

at 31.

" See, e.g., Adolph v. Federal Emergency Management Agency, 854

F.2d 732 (Sth Cir. 1988) (holding that FEMA flood control regulations

17

heavily limited in the United States where soils do not

support septic systems and sewers are not available.

Even where restrictions permit identical development

opportunities, the economic impacts can differ dramatically.

Density restrictions may leave different properties each the

same right to develop a house, but that development

opportunity may be worth a great deal in some locations and

not in others.

The different configurations in which land is held also

influence the impact of regulations. Minimum lot sizes, a

street setback requirement or a prohibition on building in

riparian zones may have positive impacts on the value of a

larger parcel of land, which may benefit from contiguous

setback areas that extend through their property. But these

restrictions may require that smaller parcels of land in those

restricted zones be merged with adjacent parcels to realize

economic value.

Regulatory programs also necessarily have

disproportionate impacts on different landowners because a

variety of neighboring public and private investments greatly

influence the suitability of different parcels for different

uses. The physical solidity of real property may appear to

give it an intrinsic value that is independent of neighboring

activities, but as early as the nineteenth century, the German

economist J.H. von Thunen recognized that the actual value

of land heavily depends on its location in relation to other

were not a taking as a matter of law); April v. City of Broken Arrow,

775 P.2d 1347 (Okl. wethy wy ordinance

development in floodplain); in v. State

Environmental Protection, 173 N.J. Super. 311, 414 A.2d = (1980)

upholding state prohibition against structures in floodway); Foreman

: State of Natural Resources, 387 N.E.2d 455 (Ind. 1979)

(same); Pope v. City of Atlanta, 242 Ga. 331, 249 S.E.2d 16 (1978),

cert. denied, 440 U.S. 936 (1979) (upholding impervious cover

restriction in floodplain prohibiting tennis court).

18

activities. See J.H. von Thunen, The Isolated State (1826).

This insight is carried forward to the present day by the real

estate industry cliche that the three most important factors

determining property value are “location, location, location.”

The interdependence of property values with neighboring

private and public investments means that similar regulatory

policies will often affect different properties in highly

unequal ways. (Indeed, the public demand for land use

regulations that make them ubiquitous arises from the

concern that neighboring land uses could otherwise adversely

affect the value of developed property. Government actions

influence a property's value as much by the restrictions on

other land as on the property itself.)

Examples of government actions that differently affect

the value of different properties range from infrastructure

investments like highways and railroads, to economic

policies toward land intensive industries such as farm

policies, to land use and environmental laws. Studies of the

impact of highways on land values have found that highways

can increase the value of some suburban land to which they

extend access by as much as 750% while decreasing the value

of lands with less access by 50%.'* Studies of federal

agricultural policies show that they can greatly increase the

value of some lands, but not others."

l

pe ya oe oem on Land Use and Value:

tlanta Report to Highway Department of

Georgia. Bureau of Business Research, Georgia State College 92

(1958). For studies showing similarly different results ranging from

ier one ach tee

way access, see Department of T Social and

inti =a.

" Some of the largest differences have been found in the different

impacts of the federal tobacco program, increasing the value of land that

had a large tobacco allotment by a large percentage over land that was

not favored by the program. See, e.g., M. Shuffett and J. Hoskins,

“Capitalization of Burley Tobacco Allotment Rights into Farmland

19

The uneven effect and regulatory treatment of

traditional land use regulations in part simply reflect the

unequal results of these other government policies. For

example, it is rational and constitutional for state and local

governments to zone land for commercial or industrial

development where the public has already invested in

various forms of infrastructure.'* (Studies have then found

that different zoning categories can have dramatically

different land values).'' Even identical regulatory restrictions

will have different economic effects depending on the

proximity to publicly funded roads, sewers and so on (as

well, of course, on the compatibility of other neighboring

private development). '° The uneven economic impact of

land use regulations therefore reflects other governmental

policies and forces that have their own inevitably uneven

affects.

Values, 51 American Journal of Agricultural Economics 471-74 (1969)

(adding value of $6,015 per acre to farms with tobacco allotments),

V.L. Vantreese, M.R. Reed & J.R. Skees, “Mandatory Production

Controls and Asset Values: A Case Study of Burley Tobacco Quotas,”

70 American Journal of Agricultural Economics 319-25 (1989) (adding

38.9% to the value of farmland in 1976).

14 For a study suggesting that land use rules in Chicago did respond

to other government infrastructure and therefore facilitate differences in

land values, see Daniel P. McMillen & John F. McDonald, “Urban

Land Value Functions with Endogenous Zoning,” 29 J. Urb. Econ. 14-

27 (1991).

1SSee Paul Asabere & Peter Colwell, "Zoning and the value of Urban

Land,” 8 Real Estate Issues 22-27 (1984) (commercially zoned land

worth 80% more than average and single family residential land worth

50% below the average).

s For example, access to highway interchanges increased the

differential economic impact of differing zoning categories in one 1981

study of urban fringe areas around Chicago. David L. Chicoine,

“Farmland values at the Urban Fringe: An Analysis of Sale Prices,” 57

Land Economics 351-362 (1981).

20

In all the cases described above, TDR's can contribute

to greater equity. They can be used to provide development

rights to those in areas like floodplains who might otherwise

have only minimal development opportunities under

traditional regulation. They can address the hardship

situation of the landowner whose land falls entirely in a

setback zone

TDR's also may allow landowners who have

development rights but little development value the

opportunity to overcome some of the disadvantages of their

locations -- an inequality that is often an accident of the

location of government infrastructure. TDR programs will

typically select growth receiving areas for TDR credits

where growth can be serviced by existing infrastructure. By

allowing landowners whose development rights have little

value on their own land the opportunity to sell rights to

those in growth areas where development rights have greater

value, landowners throughout a community can partake of

the benefits of central location.

TDR's can also improve equity by permitting a greater

sharing of the reciprocal benefits of land use rules. These

different reciprocal benefits may actually give some lands a

false appearance of a decline in value simply because those

lands have unequally shared in the rise in values. Land use

restrictions may be said to decrease value as a result of the

restrictions but increase value as a result of the restrictions

on others. It is extremely difficult to measure the net impact.

Indeed, the common method of comparing the value of

restricted property with unrestricted property is likely to be

inaccurate because the value of unrestricted property in a

regulated world where it benefits from the restrictions on

others does not reveal what its value would be in the absence

of regulation.

21

One study concluded, for example, that new

restrictions limiting land development in the sensitive New

Jersey Pinelands to one house in 40 acres did not decrease

the land’s value when compared with “control” land just

outside the Pinelands region.'’ The study also revealed,

however, that the restrictions greatly increased the value of

existing developed land in the Pinelands. Although the

individual landowner might feel himself deprived because his

land would have far greater worth if it could be intensively

developed while other restrictions remained in place, the net

impact on the restricted landowner (in part because of

TDR’s) was not significant.

But TDR's can improve on this situation because they

provide a new tradeable development opportunity that can

be exercised in the intensive growth zones in the community.

TDR programs provide a mechanism to more equitably

distribute the value-enhancing effects of many regulations.

Finally, TDR's provide a mechanism for achieving

equity that does not require significant sacrifice of the

purpose of a regulation. If the only tool government officials

have for treating landowners equally is by allowing some

development on each parcel of land, then the pursuit of

social objectives requiring the differential treatment of

different properties will likely be undermined. TDR

programs allow State and local governments to pursue

regulatory purposes more effectively while also achieving

greater equity

17 Beaton, P.W., “The Impact of Regional Land-Use Controls on

Property Values: The Case of the New Jersey Pinelands,” 67 Land

Economics 172 (1991). Another study of restricted developments

within a broad buffer area around the Chesapeake Bay found similar

impacts. See Beaton, P.W. & M. Pollock, "Economic Impact of

Growth Management Policies Surrounding the Chesapeake Bay," 68

Land Economics 434-53 (1992).

22

For all these reasons, a takings rule that disregarded the

value of TDR’s would probably freeze their development

and undermine values animating the takings clause.

IV. Urban Sprawl Imposes Substantial Economic and

Social Costs on the Public as Well as Private

Citizens and Firms.

As discussed above, the objective of limiting

development costs while allowing some development for

each parcel of land has helped to make density restrictions of

varying character the predominant form of land use

regulation in America. See Platt, R.H., Land Use and

Society: Geography, Law and Public Policy 233 (1996).

Density restrictions are not the only cause of dispersed

development, or “urban sprawl,” but they facilitate and

encourage it by spreading out development.'* One of the

serious implications of petitioner’s takings is the potentially

serious economic inefficiencies associated with this “urban

sprawl.”

Over the last several years, a variety of different

interests have identified urban sprawl as a serious and

increasing national problem. For example, as stated in a

1994 report about sprawl in California, issued by a coalition

led by Bank of America: “[A]s we approach the 21st

Century, it is clear that sprawl has created enormous costs

that California can no longer afford. Ironically, unchecked

sprawl has shifted from an engine of California’s growth to a

force that now threatens to inhibit growth and degrade the

quality of life.” Bank of America et al, Beyond Sprawl: New

Patterns of Growth to Fit the New California (1995). See

generally “Drawing the Hard Line of Urban Sprawl,” T.

18 in 1983, roughly two thirds of all both existing (67%) and new

(62%) U.S. Housing units were single family homes on separate lots,

and most of these lots were created in accordance with specific

subdivision ordinances. Platt at 297.

23

Egan, The New York Times, December 30 & 31, 1996 (two

part series on problem of sprawl in western United States);

Reid Ewing, "Is Los Angeles Style Sprawl Desirable," 63 J.

Am. Pla. Ass. 107-126 (1997).

At root, the problem of inefficient land use patterns, or

“sprawl,” derives from the fact that American land use

policies and practices have produced increasingly diffuse

settlement patterns. While most of the nation’s central

cities are deteriorating, the extent of urbanized lands is

growing exponentially. For example, the urban area

surrounding New York City expanded by 65% between 1960

and 1985, despite the fact the population of the region grew

by only 8% in the same period. New York Regional Plan

Association, The Region Tomorrow (1990). Cleveland’s

urbanized area expanded by 33% between 1970 and 1990

even though its population actually fell by 11%. Lincoln

Institute of Land Policy, Alternatives to Sprawi 5 (1995).

On a national basis, the amount of land devoted to urban use

has nearly tripled between 1960 and 1990 while average

density fell by more than one third.'® Real estate

professionals have predicted that urban land use will grow in

the future at 8 to 12 times the rate of employment and

population expansion. Leinberger, C.,“Metropolitan

Development Trends of the Late 1990s: Social and

Environmental Implication,” in Diamond, H.L and P.

Noonan, Land Use in America 220 (1996).

a There is no one measurement of urban areas. This figure measures

urban areas as calculated by the U.S. Department of Census, which

expanded in square miles from 24,111 to 61,014 between 1960 and

1980 while average density fell from 4,090 to 2,589. Platt, R. H.

Land Use and Society: Geography, Law and Public Policy 23 (1996).

Measured by metropolitan areas, which include some open land

between more urban areas, the land area devoted to urban uses rose from

6% of the land area to 19% between 1950 and 1992. Between 1960

and 1980, central city populations declined from 68 million to 59

million while suburban populations grew from 59 million to 101

million. /d. at 22.

24

Sprawl development increases the cost of providing

public facilities and services to residents and businesses.

As common sense suggests, the costs of virtually every

public facility and service -- from road construction and

maintenance, to fire protection, to water and sewer service,

and so on -- increases with a more scattered development

pattern. See Frank, J. E., The Costs of Alternative

development Patterns: A Review of the Literature, Urban

Land Institute 39 (1989). If sprawl is associated with the

abandonment of previously urbanized areas, these costs may

simply represent net additions to the tax bill without any

corresponding increase in public benefits. In the

Minneapolis/St. Paul metropolitan region, for example, the

number of children of school age declined by almost 80,000

in the 1970’s and 1980’s, resulting in the closure of 132

schools, but new sprawl development necessitated the

construction of 41 new schools on the metropolitan fringe.

Lincoln Institute of Land Policy, Alternatives to Sprawi at

22.

A number of studies have quantified the public costs of

sprawl in great detail. The 1995 Bank of America-led study

concluded that the costs of new roads, schools and other

infrastructure “often have the effect of doubling a new

homeowner’s property tax bill.” Bank of America ef ai at 6.

Recent studies have estimated the costs of sprawl versus

more concentrated development plans for the State of New

Jersey, Lexington, Kentucky and the Delaware Estuary

region, finding that sprawl would impose additional

infrastructure costs ranging from 14.8% to 25% for roads and

6.7% to 15% for utilities.” | The New Jersey study

20 Burchell, Robert W., et al. Impact Assessment of the New Jersey

Imerim State Development Plan, Report Ill: Supplemental Al PLAN

Assessment, Report prepared for New Jersey Office of State

x-xx (1992); Burchell, Robert W. and David Listokin, The Economic

Effects of Trend Versus Vision Growth in the Lexington Metropolitan

25

estimated that generally concentrated growth plans would

likely save a total of $1.3 billion in capital and operating

costs for municipalities and State government over twenty

years. The Delaware study also found that the overall costs

of providing schools was reduced by 6.9% with a more

concentrated development pattern.

The Urban Land Institute in 1989 reviewed more than

thirty years of studies and concluded that on average a three

unit per acre development located 10 miles from central

facilities and employment patterns cost $48,000 in new

infrastructure costs. If that new development were placed

closer to existing infrastructure and in somewhat greater

density, the public costs declined by half. Frank, James E.,

The Costs of Alternative development Patterns: A Review of

the Literature, Urban Land Institute 39 (1989).

Apart from these public costs, sprawl also imposes

higher private costs on private citizens and businesses.

Perhaps most significant of all is the increased automobile

use associated with dispersed land development patterns.

Many studies have confirmed the common sense intuition

that dispersed development is strongly associated with

increased reliance on the automobile. U.S. Congress Office

of Technology Assessment, Saving Energy in U.S.

Transportation 199-212 (1994) (reviewing the studies).

Sprawl development increases automobile costs both by

increasing the need for families to operate more than one car

(77% of all households with two or more adults now have at

least two vehicles) and by increasing the miles driven (up by

200% between 1960 and 1990 even as population increased

only 40%.). E.W. Johnson, Avoiding the Collision of Cities

Area, Report prepared for Bluegrass Tomorrow 129 (1994); Burchell,

Robert W., William Dolphin and Harvey S. Moskowitz, /mpact

Assessment of DELP CCMP Versus Status Quo on Twelve

in the DEP Region., Report prepared for the Delaware

Estuary Program. 12 (1995).

26

and Cars: Urban Transportation Policy for the Twenty-first

Century, Report of a Study Project sponsored by the

American Academy of Sciences in Cooperation with the

Aspen Institute (September 1993). Similarly, the Bank of

America-led study concluded that the automobile consumes

20% of the budget of the average Californian.

The costs of sprawl are also reflected in dramatic and

growing increases in congestion. The General Accounting

Office of the U.S. Congress found that traffic delays

resulting from congestion increased by 57% between 1985

and 1988. United States General Accounting Office, Traffic

Congestion: Trends, Measures and Effects (1988). The

costs, in terms of time delays, wasted fuel and insurance

premiums are generally estimated to be “in the tens of

billions of dollars and . . . rising rapidly.” Office of

Technology Assessment at 112. The Bank of America-led

study cited research finding that average commuting times in

two developing counties in California increased by 13% in

only 10 years, and it attributed a significant loss of business

from the State to this rise in congestion Bank of America at

6.

Additionally, apart from these direct economic costs,

sprawl imposes other types of adverse impacts on society,

including increased air and water pollution and rapid loss of

valuable natural resources. Highway vehicles contribute

roughly 35% of volatile organic compounds, the primary

contributor to urban smog. Office of Technology

Assessment at 130. While the level of pollutants emitted by

each car has declined enormously under the Clear Air Act,

these technological advances been heavily offset by an

increase in the number of vehicle miles traveled of nearly

200% between 1960 and 1990 (while the population grew by

only 40%.) As discussed above, this recent increase in

automobile usage is related to more dispersed settlement

patterns. Moreover, efforts to address increased automobile

27

use and greater air pollution resulting from sprawl through

more reliance on mass transportation are undermined by the

economic impracticality of constructing mass transit to

service highly dispersed populations. Office of Technology

Assessment at 193, 211 (finding that any effort to increase

reliance on mass transit must be combined “with strong

development controls and incentives” for concentrated

development).

Sprawl development also results in a great increase in

impervious surface area with resulting increases in water

pollution as well as flooding problems. See generally Klein,

R.D., “Urbanization and Stream Water Quality,” 15 Water

Resources Bulletin 4 (1979). In growing suburban counties

in Maryland and Virginia, the growing runoff pollution

associated with sprawl has more than offset expensive

pollution controls on factories and sewage treatment plants.

See Cohn-Lee, R.G. & D.M. Cameron, “Urban Stormwater

Runoff Contamination of the Chesapeake Bay: Sources and

Mitigation,” 14 Environmental Professional 10-27 (1992).

In the Chesapeake Bay, for example, this runoff contributes

more toxic pollutants than factories and sewage treatment

plants. Jd In the Pacific Northwest, increasing

suburbanization is blamed for larger and more frequent

floods. T. Egan, The New York Times, December 30, 1996.

Finally, sprawl development is the driving force behind

the rapid loss of some of America’s most fertile farmland.

According to the Bank of America-led study, California’s

Central Valley lost almost half a million acres of farmland

between 1982 and 1987. This study also concluded that

sprawl has undermined the agriculture economy indirectly by

reducing the productivity of farmland as a result of pollution,

markets. Nationwide, between 1982 and 1992, cropland area

decreased by 39 million acres, a decrease of 9%. U.S.

28

Department of Agriculture, Soil Conservation Service, / 992

National Resources Inventory.

As the Montgomery County and other examples

discussed above show, TDR programs can help to limit

sprawl equitably. TDR's have been recommended as a

regulatory tool for controlling sprawl and its associated costs

by builders and planners alike.?! By contrast, a takings rule

that held that each parcel of land must be individually

developable would encourage further dispersal of

development and foster more inefficient land development

nationwide.

CONCLUSION

For all the foregoing reasons, if and to the extent the

Court deems it appropriate to reach the merits in this case,

amici urge the Court to conclude that the value of a

Transferable Development Right is appropriately taken into

account in determining whether a taking has in fact occurred.

21 See, e.g., The Baltimore Sun (Feb. 18 1996), 1996 WL 6605863

(quoting L. Earl Armiger, president of Maryland Builders Association,

as recommending TDR's to limit sprawl and encourage building in

older suburbs); Stanley D. Abrams, "Flexible Zoning Techniques to

Meet State and Local Growth Policies,” C930 AL/-ABA 537, 547

(1993) ("The TDR concept is becoming the front line defense in

preventing spraw! and leap-frog development.")

Table 2

PINELANDS PRESERVATION AREAS

Table 3

LL A St a

PROJECTED VALUE OF PINELANDS DEVELOPMENT

PRESERVATION AREA 368,100 Acres

DISTRICT

FOREST DISTRICT 386,500 Acres

AGRICULTURAL 85,500 Acres

PRODUCTION DISTRICT

TOTAL PRESERVATION 840,100 Acres

ACREAGE

SOURCE: U.S. Dept. of the Interior, "Draft Environmental

Impact Statement, Proposed Comprehensive Management Plan

for the Pinelands National Preserve," 4.13 (undated).

CREDIT ALLOCATIONS

1981 - 1995

RIGHTS | AVERAGE | VALUE OF

ALLOCATED] PRICE RIGHTS

81 332 $830,000

'g2 662 $2,500] $1,655,000

83 518 ~ $2,500] $1,295,000

'84 217 $2,500] $542,500

85 123 $2,425] $298,275

'86 30 $2,031 $60,938

87 44 $2,500} $110,000

'88 38 $2,500 $95,000

'89 386 $2,508] $967,942

‘90 714 $3,878] $2,769,016

‘91 269 $3,517] $946,146

‘92 34 $3,532} $120,085

93 246 $3,518] $865,370

94 504 $3,525] $1,776,478

‘95 115 $3,204] $368,426

TOTALS 4,222 $12,700,176

SOURCE: New Jersey Pineland Development Bank.