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Orange County Transfer of Development Rights Feasibility Study 20 DRAFT" Economic Feasibility Repod off-site. In addition, this may involve the assistance of a local appraiser or real estate professional with access to detailed local property sales data. Therefore, due to the constraints of the Phase I-II budget this analysis was not completed. The recommended program structure is a free market where buyers and sellers exchange credits freely, The price is based on a negotiation behveen buyers and sellers. Both parties are informed through information distributed by the County and by the large number of conservation easements already purchased by the County. An appraisal of the easement will assist in determining the accurate price of the easement. Using this structure, developers will go to where the TDR credits are least expensive. For Sending Area Scenario No. i, this will mostly likely mean that the rural areas with no urban influence will be preserved first, Sending Area Scenarios No. 2 and 3 focus the receiving areas on growth pressure and natural resource areas and thus these areas will be preserved first. Within the free market structure, the County acts as a broker, This role would include putting a number of constraints on how the TDR market operates such as limiting the parcels of land allowed to sell TDRs and which ones can use TDRs to increase development, adjusting the density bonus and TDR allocation rate to ensure equilibrium prices and quantities, and facilitating sales through bringing buyers and sellers together and providing them with relevant information on the transaction process, Through publicizing information about how parties can reach each other and providing information about past sales and sales prices, the County can reduce transaction costs and increase efficiency in the market,' Summary Given the assumptions, all scenarios will provide an attractive market for the exchange of TDR credits. All three sending area scenarios will produce a sufficient supply of credits. However, there is an imbalance in supply and demand as shown in Table 1, Because of the large size of Sending Area 1 (includes all land within the County's jurisdiction except for land in the receiving areas), there is a large amount of credits that cannot be accommodated within the receiving area. Sending Area 2 also produces a large amount of credits that are not accommodated. Sending Area 3 produces an amount that is more balanced with the demand of the Receiving Area. As identified in the Analysis of Supply and Demand Section, the imbalance can be addressed through the following: increasing the density bonus rate; adjusting the TDR allocation rate; a reduction in the participation rate of the sending areas; enlarging the size of the receiving areas; reduced demand through applying design standards or affordable housing requirements; allocating more credits for certain types of development; and through ' Virginia McConnell, Elizabeth Kopits, and Margaret Walls, "How Weil Can Markets for Development Rightr Work? Evaluating a Farmland Preservation Program," Resources for the Future Discussion Paper, March 2003. 6.7.2006