Transfer of Development Rights; Balancing Land Preservation and Economic Growth

Posted by Emily Coombs on Sunday, February 14th, 2021 at 4:44pm.

What has always been a rich agricultural area, Bozeman, Montana, is now the country's fastest-growing micropolitan city. It's easy to understand why. For the adventure-minded, the opportunities are endless. Montana State University brings a vibrant energy to the town, and the area's growing technology sector is creating new job opportunities. Many a visitor comes for vacation and returns to call Bozeman home.

Managing this pace of growth while protecting the lands that make Bozeman so special is a tricky endeavor. Recently, Gallatin County began developing a growth plan with recommendations and guidelines for land use between Gallatin Gateway, Four Corners, Bozeman, and Belgrade. The plan, meant to be used as public outreach to coordinate land use development, considers existing infrastructure and community services, environmental resources, rich agricultural soils, critical wildlife habitat, and recreational opportunities.

One market-based solution the plan embraces is called a Transfer of Development Rights (TDR), a voluntary opportunity for landowners to extract the development value from their land in the form of development rights. These rights then transfer to another parcel of land closer to infrastructure and community services, which in essence, densifies the land close to town and preserves the rich agricultural resources.

TDR's started on the east coast around 30 years ago to preserve Civil War battlefields and old historic structures. Today, one of the best examples is taking place in King County, WA, where they have saved huge chunks of farmland and transfer the development rights to vertical buildings in more populated areas. In Bozeman, several TDR transactions occurred in 2004 in the Middle Cottonwood and Springhill Zoning Districts to protect the winter habitat for elk, mule deer, and cattle. In 2018, landowners completed a TDR transaction in the Bozeman Creek neighborhood to create a wildlife corridor from Kagy Boulevard to Ice Pond Road.

Typically, the exchange is 1 to 1.5. meaning, for every development right sent from the landowner, the purchaser receives 1.5 rights, creating an incentive for the developer to keep the rights in the areas already populated. This transaction allows landowners to preserve the environmental resources and pass the land on to their heirs. As part of the transaction, deed restrictions are recorded on the title of the property. Landowners can reserve the right to have a cluster of development on their property for their family, with the majority preserving the environmental resources.

Inevitably, population growth will continue to impact land resources in the Gallatin Valley, making it critical to have market-based solutions to address the issue. If you are interested in learning more, or to see if your land has potential for this type of transaction, please contact Bart Manion, at or 406-580-1279.

Leave a Comment

Format example:
Format example: