Purchase of Development Rights
The Ottawa County Board of Commissioners has established a committee to investigate whether the County should establish or be a partner in a Purchase of Development Rights program. The Committee will make its recommendation to the Board of Commissioners in Spring 2006.
Committee Members:
Commissioner Philip Kuyers, Chair
Commissioner Donald Disselkoen
Commissioner Cornelius Vander Kam
For more information on the Committee or Purchase of Development Rights, please contact the Ottawa County Administrator’s Office at (616) 738-4898.
Purchase of Development Rights Frequently Asked Questions
Compiled by the Ottawa County Board of Commissioners Purchase of Development Rights Subcomittee, January 2006
A. What is Purchase of Development Rights?
Under Michigan law, development rights are severable from land, much like mineral rights. The State of Michigan’s Purchase of Development Rights (PDR) program has existed in its current form since 2000. It is a voluntary program that compensates owners of agricultural land in return for placing a permanent conservation easement on a parcel of land. The conservation easement is a deed restriction that limits future, non-agricultural development.
B. What is the status of the property once development rights are purchased?
The only change in a property once its development rights have been purchased is in the ability to develop it for non-agricultural uses. The landowner retains the right to farm, sell, and use the property in any way that is consistent with agriculture. The land can still be used as equity for improvement loans.
C. What happens if a new landowner in the future no longer wants to participate in PDR?
Once the land enters a PDR program, the conservation easement may only be removed in rare cases, such as eminent domain. PDR is essentially a permanent decision, which may not be the right choice for all landowners.
D. What happens if a landowner stops farming?
While most landowners enter PDR programs in order to continue farming, the program does not compel the owner of the land to farm. Easement provisions guarantee that the land will be available for future agricultural use, and to ensure that the farmland maintains the potential for productive farming an annual property evaluation is required.
E. What is done with the land if farming becomes impossible?
If a parcel of land were to become irrevocably damaged so that farming would be impossible, there are typically provisions in easements to allow the deed restrictions to be voided.
F. Are the funds from a PDR just a one time fix for the farmer?
Compensation received from PDR purchases may be used however a landowner wishes, but the program is not intended to “save” individual farmers. The goal of the program is to preserve agricultural land as a long-term resource to the community.
G. What happens to tax revenue and value after a conservation easement is in place?
The State of Michigan requires taxation of agricultural land at its development value, considering development the “highest and best use” of the property. Once a conservation easement is in place, the highest and best use of the property becomes agriculture, so the land is taxed at its agricultural value.
H. What is the advantage to having a countywide program?
Having a countywide program allows the farmland to receive a higher score through the state scoring system, which increases the chance of receiving state and federal funding.
I. Is the County considering funding this program?
No. The Purchase of Development Rights Committee was formed based on requests from local units of government. The Committee’s charge is to recommend to the Board of Commissioners whether to establish a countywide PDR program, at which point the full Board will consider the recommendation.
J. What are the funding source options?
The 2002 Federal Farm Bill allocated several millions of dollars per year to be distributed annually to PDR programs across the nation. States compete for that funding, which can be used to fund up to 50% of the purchase of development rights from individual farmers. There are no additional State funds available at this time, so the remaining 50% must come from the local level. In programs across Michigan this funding has come from a variety of sources, including landowner donation, local millages, and foundation and private sector support.
K. Who would administer a countywide program?
At this time, the County is not considering providing staff for program administration, although Planning Department staff serve as resources on land use issues throughout the County.
L. What are the administrative costs?
Costs vary based upon local program design. Some programs operate with less than one full-time employee, while others dedicate several staff members to administration. Each local program must submit application information to the State in order to be considered for funding, and if an easement is purchased it must be monitored for compliance at least once per year.
M. What is the experience of other units of government that have implemented PDR?
PDR programs have existed for decades in other parts of the country, most notably in Lancaster County, Pennsylvania and Montgomery and Carroll Counties in Maryland. These programs are well-established and have dedicated local and state funding.
Well-established PDR programs in Michigan, such as those in Leelanau County/Peninsula Township, have dedicated millages and communities use PDR as one method of farmland preservation. Kent County’s program, established in 2002, has received federal and foundation funding to preserve over 400 acres of farmland.
N. Why can’t the County consider Transfer of Development Rights?
Transfer of Development Rights (TDR), the process by which development rights are transferred from one parcel in a sending district to parcel in one or more receiving districts, is not authorized by statute for use between jurisdictions in Michigan.
O. Are there any other options for preserving agricultural land besides PDR?
PDR is only one piece of a farmland preservation strategy, and is not a substitute for good planning and long-term thinking about what a community should look like. Other options include PA 116 and zoning which promotes agricultural preservation, however neither of those options offer permanent preservation of land.
