Wisconsin Zoning Law and TDRs:
Transfer of Development Rights Under Existing Wisconsin Enabling Statutes

By Russell Knetzger, AICP

Transfer of development rights (TDR) is the concept of preserving open space, including farmland, by allowing the owners to sell to a developer all or a portion of the development rights to their land. The developer takes the rights and adds them to another parcel in the same zoning jurisdiction, thereby using the second parcel more intensively. The first parcel is then deed restricted from being developed in the future to the degree that development rights were conveyed.

Via TDR the owner who is preserving their land as open space or farmland for the benefit of future generations receives some economic value for their land immediately, while being able to continue to own it and to use it as before.

TDR is "market driven." That means that the marketplace determines the number of owners who will be approached by developers to sell their development rights, and what price the developers will offer. In areas where little development is occurring, TDR will see little or no use.

The local zoning ordinance, and ideally also the local land use plan, should be amended to provide for the TDR process, and possibly but not necessarily also designate areas where land will be preserved (sending areas), and where land can be developed more intensively (receiving areas). Sending and receiving areas can also be defined simply by identifying districts in the zoning ordinance.

In the opinion of this author, TDR can best be defended for use by cities and villages that derive their zoning authority from Wis. Stat. 62.23, and in towns that have adopted "village powers," and therefore also fall under ss. 62.23. Other towns that are under county zoning ordinances and wish to use TDR would have to first adopt village powers, and then gain county permission to opt out of the county ordinance by substituting a town-zoning ordinance adopted under s. 61.35 and s. 62.23. However, all of the re-zonings, including TDR projects, would still require county approval.

Towns on the edges of growing villages and cities, where there is pressure to also develop in the town (in the hopscotch pattern without public utilities that planners call "urban sprawl"), are the best candidates to use TDR. This is because they have both the sending and receiving parcels in one zoning jurisdiction.

Such towns are especially able to be prime TDR candidates if they have negotiated boundary agreements with their adjacent villages and cities, allowing for bringing public sewer and water out into the town to allow some development without annexation. In this way, urban sprawl can be redirected to the town areas served by utilities.

The way TDR can be processed under existing state law is to utilize the authority given in the state statutes for what planners call "planned unit development" (PUD), which is found in the last three sentences of Wis. Stat. 62.23(7)(b), portions of which read:

Planned unit development is the zoning and development technique which allows a developer to depart from the usual fixed zoning district requirements of lot size and allowable land uses, for the purpose of creating open space and more diversified uses. In its most common form, the typical PUD starts with a parcel zoned 100 percent for single-family residential lots and then creates open space on that parcel by transferring the dwelling unit potential (density) in the open space areas onto the remainder of the parcel, thereby intensifying the density in the non-open space areas. This is done by using smaller lots, duplexes, multi-family buildings or a combination of these approaches.

Thus PUD is really about transferring development rights around within a single parcel. The point of this article is to suggest that PUD be used as the actual mechanism for TDR over the entire community, by treating the sending and receiving parcels as one PUD district, even thought they may be separated by several miles.

Some readers may balk at stretching PUD to cover in one special district lands that are not contiguous to each other in a traditional sense. The response is that most PUDs contain tracts that already cross existing roads, streams, and other features which introduce a degree of non-contiguity within the "zoning lot." All that TDR via PUD does is to expand that degree of non-contiguity, but staying with that same local zoning jurisdiction.

If local legal counsel is willing to look at that basic tenet, a TDR/PUD ordinance is available as a model, and can be obtained by writing or calling: