Purchase of Development Rights Program:

A purchase of development rights (PDR) program is a means of compensating farmers for their willingness to accept a deed restriction on their land that limits future development of the land for non-agricultural purposes.  Landowners are compensated for the fair market value of their land, based on the difference between what it could be sold for on the open market with no restrictions and what it can be sold for once an easement is placed on the land.  State certified appraisers determine these values and the agreement is negotiated on an individual basis with the farmer in a willing seller, willing buyer atmosphere.

• Permanent protection of farmland – community benefits from economic activity generated by agriculture, stable land use patterns, fewer infrastructure needs, lower cost of community services and from enhanced rural character.

• Participation is completely voluntary and landowners receive fair market value for development rights.  All private property rights remain intact.

• Cash from sale of development rights can be used for reducing debt, lowering operating cost, improving or expanding farm operations, college educations, retirement etc.  Proceeds from easement sales are often recycled back into local economy.

• Landowner can access portion of land equity while still maintaining ownership and agricultural us of land and without having to sell it for development or non-farm uses. 

• Property taxes and inheritance taxes based only on residual agricultural value of the land rather than the full developmental value.

• Farmland is now affordable for younger farmer and eases transfer of property to future generations.

• Landowner can still borrow against reduced equity in their land.  Other states’ track records show remaining land retains excellent (and increasing) resale value.

Last updated on 04/11/06.