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Orange County Transfer of Development Rights Feasibility Study 16 DRAFT Economic Feasibility Report This was then multiplied by the TDR density bonus to derive the maximum density with TDR. In order to calculate the expected TDR demand, the maximum density was multiplied by the expelled increment per acre (e.g., 80 percent of maximum density), The result is the overall expected TDR demand for the subject receiving area, The definitions for each of the terms and the assumptions used in this model are described below. TDR allocation rate -The number of TDRs that a sending site owner can sell per acre. The summary reflects an allocation rate of one TDR credit per acre, For a vacant 10-acre property, the property owner could sell 10 TDR credits, Sending Area participation rate -For purposes of this study, it is assumed that 100 percent of eligible landowners will wish to participate, although for illustrative purposes sending area credits at BO% and 50% participation rates are also shown, Density bonus -The percent increase of allowable units in the receiving area, The summary reflects alive-fold increase in existing zoning in the receiving area. Since the majority of the receiving area is zoned for low density, this large percentage increase still does not produce high densities in most areas, For example, an AR district currently allows one dwelling unit per acre and would be eligible for up to four additional units. This study uses a conversion rate of one TDR credit equals one unit of additional density. Expelled average increment per acre -The amount of allowable units expected to be used in the receiving area. Based on comparable studies, this analysis assumes the developer will use an average of 80 percent of the maximum theoretical increment per acre, Receiving Area participation rate -For purposes of this study, we assume 100 percent of eligible Receiving Area landowners will wish to participate. Assumations We assume that TDR credit transactions are set at a 1:1 ratio for both Sending and Receiving Areas.. Developers purchase eighty percent of the permissible TDR credits at the Receiving site (based on experience in other communities), We backed out lands that were already developed in the Sending Areas, but assumed that hundred percent of the remaining area would be eligible to participate. For illustrative purposes, we calculate an eighty percent and fifty percent participation rate as well. Land prices for each parcel are reflective of recent transactions in a larger area (township). Buyers and sellers of credits have a hundred percent rate of success in reaching agreements, and developers have a hundred percent success rate in seeing their development through to the stage where TDR transactions actually occur, Analvsis of Suouly and Demand The feasibility analysis reveals that, with the above assumptions, supply will exceed the number of Receiving Area TDR Credits in every case. The sending areas produce more TDR credits than the receiving areas can accommodate. This may provide a comfortable "cushion" of demand but may be problematic as well since research indicates that the receiving area should be large enough to accept sufficient TDR credits to make an 6.7 2006