                                 CODE OF VIRGINIA

LOCALITIES MAY PROVIDE FOR TRANSFER OF DEVELOPMENT RIGHTS (§ 15.2-2316.2)

A. Pursuant to the provisions of this article, the governing body of any
locality by ordinance may, in order to conserve and promote the public health,
safety, and general welfare, establish procedures, methods, and standards for
the transfer of development rights within its jurisdiction. Any locality
adopting or amending any such transfer of development rights ordinance shall
give notice and hold a public hearing in accordance with &#xA7; 15.2-2204 prior
to approval by the governing body.

B. In order to implement the provisions of this act, a locality shall adopt an
ordinance that shall provide for:

   1. The issuance and recordation of the instruments necessary to sever
   development rights from the sending property, to convey development rights to
   one or more parties, or to affix development rights to one or more receiving
   properties. These instruments shall be executed by the property owners of the
   development rights being transferred, and any lien holders of such property
   owners. The instruments shall identify the development rights being severed,
   and the sending properties or the receiving properties, as applicable;

   2. Assurance that the prohibitions against the use and development of the
   sending property shall bind the landowner and every successor in interest to
   the landowner;

   3. The severance of transferable development rights from the sending property;

   4. The purchase, sale, exchange, or other conveyance of transferable
   development rights, after severance, and prior to the rights being affixed to
   a receiving property;

   5. A system for monitoring the severance, ownership, assignment, and transfer
   of transferable development rights;

   6. A map or other description of areas designated as sending and receiving
   areas for the transfer of development rights between properties;

   7. The identification of parcels, if any, within a receiving area that are
   inappropriate as receiving properties;

   8. The permitted uses and the maximum increases in density in the receiving
   area;

   9. The minimum acreage of a sending property and the minimum reduction in
   density of the sending property that may be conveyed in severance or transfer
   of development rights;

   10. The development rights permitted to be attached in the receiving areas
   shall be equal to or greater than the development rights permitted to be
   severed from the sending areas;

   11. An assessment of the infrastructure in the receiving area that identifies
   the ability of the area to accept increases in density and its plans to
   provide necessary utility services within any designated receiving area; and

   12. The application to be deemed approved upon the determination of compliance
   with the ordinance by the agent of the planning commission, or other agent
   designated by the locality.

C. In order to implement the provisions of this act, a locality may provide in
its ordinance for:

   1. The purchase of all or part of such development rights, which shall retire
   the development rights so purchased;

   2. The severance of development rights from existing zoned or subdivided
   properties as otherwise provided in subsection E;

   3. The owner of such development rights to make application to the locality
   for a real estate tax abatement for a period up to 25 years, to compensate the
   owner of such development rights for the fair market value of all or part of
   the development rights, which shall retire the number of development rights
   equal to the amount of the tax abatement, and such abatement is transferable
   with the property;

   4. The owner of a property to request designation by the locality of the
   owner&#8217;s property as a &#8220;sending property&#8221; or a
   &#8220;receiving property&#8221;;

   5. The allowance for residential density to be converted to bonus density on
   the receiving property by (i) an increase in the residential density on the
   receiving property or (ii) an increase in the square feet of commercial,
   industrial, or other uses on the receiving property, which upon conversion
   shall retire the development rights so converted;

   6. The receiving areas to include such urban development areas or similarly
   defined areas in the locality established pursuant to &#xA7; 15.2-2223.1;

   7. The sending properties, subsequent to severance of development rights, to
   generate one or more forms of renewable energy, as defined in &#xA7; 56-576,
   subject to the provisions of the local zoning ordinance;

   8. The sending properties, subsequent to severance of development rights, to
   produce agricultural products or forestal products, as defined in &#xA7;
   15.2-4302, and to include parks, campgrounds and related camping facilities;
   however, for purposes of this subdivision, &#8220;campgrounds&#8221; does not
   include use by travel trailers, motor homes, and similar vehicular type
   structures;

   9. The review of an application by the planning commission to determine
   whether the application complies with the provisions of the ordinance;

   10. Such other provisions as the locality deems necessary to aid in the
   implementation of the provisions of this act;

   11. Approval of an application upon the determination of compliance with the
   ordinance by the agent of the planning commission; and

   12. A requirement that development comply with any locality-adopted
   neighborhood design standards identified in the comprehensive plan for the
   receiving area in which the development shall occur, provided such design
   standard was adopted in the comprehensive plan and applied to the receiving
   area prior to the transfer of the development right.

D. The locality may, by ordinance, designate receiving areas or receiving
properties, add to, supplement, or amend its designations of receiving areas or
receiving properties, or designate receiving areas or receiving properties that
shall receive development rights only from certain sending areas or sending
properties specified by the locality, so long as the development rights
permitted to be attached in the receiving areas are equal to or greater than the
development rights permitted to be severed in the sending areas.

E. Any proposed severance or transfer of development rights shall only be
initiated upon application by the property owners of the sending properties,
development rights, or receiving properties as otherwise provided herein.

F. A locality may not require property owners to sever or transfer development
rights as a condition of the development of any property.

G. The owner of a property may sever development rights from the sending
property, pursuant to the provisions of this act. An application to transfer
development rights to one or more receiving properties, for the purpose of
affixing such rights thereto, shall only be initiated upon application by the
owner of such development rights and the owners of the receiving properties.

H. Development rights severed pursuant to this article shall be interests in
real property and shall be considered as such for purposes of conveyance and
taxation. Once a deed for transferable development rights, created pursuant to
this act, has been recorded in the land records of the office of the circuit
court clerk for the locality to reflect the transferable development rights
sold, conveyed, or otherwise transferred by the owner of the sending property,
the development rights shall vest in the grantee and may be transferred by such
grantee to a successor in interest. Nothing herein shall be construed to prevent
the owner of the sending property from recording a deed covenant against the
sending property severing the development rights on said property, with the
owner of the sending property retaining ownership of the severed development
rights. Any transfer of the development rights to a property in a receiving area
shall be in accordance with the provisions of the ordinance adopted pursuant to
this article.

I. For the purposes of ad valorem real property taxation, the value of a
transferable development right shall be deemed appurtenant to the sending
property until the transferable development right is severed from and recorded
as a distinct interest in real property, or the transferable development right
is used at a receiving property and becomes appurtenant thereto. Once a
transferable development right is severed from the sending property, the
assessment of the fee interest in the sending property shall reflect any change
in the fair market value that results from the inability of the owner of the fee
interest to use such property for such uses terminated by the severance of the
transferable development right. Upon severance from the sending property and
recordation as a distinct interest in real property, the transferable
development right shall be assessed at its fair market value on a separate real
estate tax bill sent to the owner of said development right as taxable real
estate in accordance with Article 1 (&#xA7; 58.1-3200 et seq.) of Chapter 32 of
Title 58.1. The development right shall be taxed as taxable real estate by the
local jurisdiction where the sending property is located, until such time as the
development right becomes attached to a receiving property, at which time it
shall be taxed as taxable real estate by the local jurisdiction where the
receiving property is located.

J. The owner of a sending property from which development rights are severed
shall provide a copy of the instrument, showing the deed book and page number,
or instrument or GPIN, to the real estate tax assessor for the locality.

K. Localities, from time to time as the locality designates sending and
receiving areas, shall incorporate the map identified in subdivision B 6 into
the comprehensive plan.

L. No amendment to the zoning map, nor any amendments to the text of the zoning
ordinance with respect to the zoning district applicable thereto initiated by
the governing body, which eliminate, or materially restrict, reduce, or downzone
the uses, or the density of uses permitted in the zoning district applicable to
any property to which development rights have been transferred, shall be
effective with respect to such property unless there has been mistake, fraud, or
a material change in circumstances substantially affecting the public health,
safety, or welfare.

M. A county adopting an ordinance pursuant to this article may designate
eligible receiving areas in any incorporated town within such county, if the
governing body of the town has also amended its zoning ordinance to designate
the same areas as eligible to receive density being transferred from sending
areas in the county. The development right shall be taxed as taxable real estate
by the local jurisdiction where the sending property is located, until such time
as the development right becomes attached to a receiving property, at which time
it shall be taxed as taxable real estate by the local jurisdiction where the
receiving property is located.

N. Any county and an adjacent city may enter voluntarily into an agreement to
permit the county to designate eligible receiving areas in the city if the
governing body of the city has also amended its zoning ordinance to designate
the same areas as eligible to receive density being transferred from sending
areas in the county. The city council shall designate areas it deems suitable as
receiving areas and shall designate the maximum increases in density in each
such receiving area. However, if any such agreement contains any provision
addressing any issue provided for in Chapter 32 (§ 15.2-3200 et seq.), 33 (§
15.2-3300 et seq.), 36 (§ 15.2-3600 et seq.), 38 (§ 15.2-3800 et seq.), 39 (§
15.2-3900 et seq.), or 41 (§ 15.2-4100 et seq.), the agreement shall be subject
to the review and implementation process established by Chapter 34 (§ 15.2-3400
et seq.). The development right shall be taxed as taxable real estate by the
local jurisdiction where the sending property is located, until such time as the
development right becomes attached to a receiving property, at which time it
shall be taxed as taxable real estate by the local jurisdiction where the
receiving property is located.

   1. The terms and conditions of the density transfer agreement as provided in
   this subsection shall be determined by the affected localities and shall be
   approved by the governing body of each locality participating in the
   agreement, provided the governing body of each such locality first holds a
   public hearing, which shall be advertised as required by &#xA7; 15.2-2204.

   2. The governing bodies shall petition a circuit court having jurisdiction in
   one or more of the localities for an order affirming the proposed agreement.
   The circuit court shall be limited in its decision to either affirming or
   denying the agreement and shall have no authority, without the express
   approval of each local governing body, to amend or change the terms or
   conditions of the agreement, but shall have the authority to validate the
   agreement and give it full force and effect. The circuit court shall affirm
   the agreement unless the court finds either that the agreement is contrary to
   the best interests of the Commonwealth or that it is not in the best interests
   of each of the parties thereto.

   3. The agreement shall not become binding on the localities until affirmed by
   the court under this subsection. Once approved by the circuit court, the
   agreement shall also bind future local governing bodies of the localities.

HISTORY: 2006, c. 573; 2007, cc. 363, 410; 2009, cc. 413, 731; 2010, c. 239;
2012, c. 512; 2014, c. 527; 2019, c. 701; 2024, cc. 225, 242.