| North Livermore Transfer of Development Credits Program |
| City of Livermore Planning Department |
| Livermore, California | July 2003 | to | November 2004 |
| The transfer of development credits is a complex mechanism for redirecting development away from |
| environmentally sensitive areas. While a number of programs have been initiated around the country, few have |
| used sound economic analysis to determine the actual cost of the credits, or the impact of having to purchase |
| credits on future development. As part of a team led by the Solimar Group, Strategic Economics was one of the |
| first to apply such rigor to a transfer of development credits program. This process involved evaluating the value of |
| various types of land within the protected area based on such factors as parcel size, access to water, and current |
| land use to determine the value of a credit. Development scenarios were then constructed for various ‘receiving |
| areas’ within the City of Livermore. Strategic Economics used pro forma analyses to test the impact of having to |
| purchase development credits on project feasibility. The analysis found that most receiver sites in Livermore had |
| insufficient demand to warrant development that would be financially feasible when development credits were |
| purchased. One of the most sensitive variables in the model was developer rate of return. Strategic Economics |
| worked closely with the development community to ensure that return assumptions were both reasonable from the |
| community’s perspective and acceptable to the developers. |