How To Buy Boulder County TDCs

You’ve heard about Transferable Development Credits (TDCs), and you’ve been thinking about building or renovating a home that will exceed the six thousand square foot limit in unincorporated Boulder county. Now you think you want to get in on the buying of TDCs because you’re ready to go. Well, hold on just a minute. Let’s get you some answers first about how this program works.

Do you have more questions about TDCs or the real estate process in general? Call or email me right now so we can get you honest answers to your important questions.

For sellers, there are sales reporting requirements. This may create a taxable event for you so check with your CPA or tax planning professional. But we’re talking about buying not selling, so let’s move on.

There are a couple different ways to buy TDCs. You can get them through the TDC clearing house, or you can buy them privately. Since the program is brand new, there aren’t currently many, if any, people that know what they are or how to sell them so your best option may be the TDC clearing house.

First, there is a registration process if you’re going to use the TDC clearing house. Consider also that the clearing house is selling county owned TDCs and currently there’s no competition in the marketplace for TDCs so the market hasn’t responded to the price set forth by the county. The current asking price from the county through the clearing house is $10,000 per TDC. The upside is that there’s no current fee for using the TDC clearing house, so there won’t be an additional add-on cost. At least not for now.

If you’re planning on trying this route, here’s how to use the TDC clearing house. You’ll need an approved site plan review (SPR) first. Please keep in mind that the purchase of TDCs does not guarantee approval from the the county, so be sure to get your SPR completed and approved before spending the money on TDCs that you may not even be able to use. The purchase of a TDC is more like the final step in the process rather than a first step.

As you can imagine, it’s risky to buy TDC’s prior to completing a site plan review. Some of you will consider this, and if you have money to burn, or are ultra confident in your plans, you might take that reverse-order approach. But don’t get too excited, I think there’s plenty of TDCs to go around right now, and the county plans on making more available as they are needed.

Once you have your site plan review complete, and your building permit application ready, there will likely be plenty of TDCs for sale given the current bank of them available from the clearinghouse via the stash created from open space land purchases.

While the county is not buying any TDCs right now, it is certainly selling them. Since the project is so new, as of the date of the meeting a couple weeks ago, none had been sold to the public for new building projects within the program. I think it will be more interesting when private sellers get into the market and make TDCs available from private land. Then we’ll see a more open market response to the price and value of TDCs.

One final note: if you are selling TDCs, that will have no impact on agricultural use for your land, it only restricts residential floor space development use.

If you, or someone you know is considering buying or selling real estate with questions looming, please call or email me so we can get started on the right foot and get answers before you take unnecesary action.

-Zachary Epps, full-time professional Realtor and EcoBroker

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