Zoning in Montgomery County, Pennsylvania: The Agricultural Reserve and TDR Program

The 1980 Rural Density Transfer Zone: a real density cap, not a suggestion

In 1980, Montgomery County enacted legislation establishing a Rural Density Transfer Zone within its designated Agricultural Reserve -- a band of farmland concentrated in the county's northwestern townships, including Skippack, Upper Salford, and Perkiomen and their neighbors. Within that zone, new housing development was capped at one house per 25 acres, a sharp reduction from the one-per-5-acre density the same land had previously been allowed to develop at under prior zoning. This is a real, binding density restriction under the applicable township's zoning ordinance, not a voluntary program or a nonbinding overlay -- a landowner inside the Rural Density Transfer Zone cannot simply subdivide and build at the pre-1980 density regardless of market demand.

For a buyer evaluating raw land inside the Agricultural Reserve with subdivision or higher-density development in mind, this cap is the single most important fact to confirm before making any assumptions about the parcel's development potential -- a tract that looks, on paper, large enough to subdivide into several building lots under a conventional 5-acre-minimum zoning district may in fact only support one dwelling under the Reserve's 25-acre standard.

Transferable Development Rights: how the county compensated landowners for the cap

To offset the lost development potential the 1980 density cap created, Montgomery County created a legal, sellable property right: the Transferable Development Right, or TDR. The county assigned one TDR for every five acres of land inside the designated rural zone -- meaning a landowner whose property lost the ability to develop at one-per-5-acres under the new cap instead received a severable right reflecting roughly that same original density, which they could sell independently of the land itself.

A TDR's value comes from where it can be used: a developer working in one of the county's designated "receiving" districts elsewhere in Montgomery County -- areas the county has zoned to allow greater density specifically in exchange for purchased TDRs -- can buy TDRs from an Agricultural Reserve landowner and use them to build at a higher density than that receiving district's base zoning would otherwise permit. The transaction severs the development right from the sending (Agricultural Reserve) parcel, typically recorded against the property's deed, while creating additional buildable density at the receiving site. This is a genuinely two-sided market: between 1981 and 2007, roughly 9,700 TDRs were severed from Agricultural Reserve properties, with about two-thirds of them transferred to receiving-area development projects elsewhere in the county -- and the program has, cumulatively, preserved 47,903 acres of agricultural land as of 2022.

What this means if you're buying inside the Agricultural Reserve

If you're evaluating a parcel inside the Rural Density Transfer Zone, ask directly (through the specific township and, for TDR-specific history, the Montgomery County Planning Commission) whether the property's TDRs have already been sold off by a previous owner, or remain attached and sellable. A parcel whose TDRs were severed decades ago by a prior owner is permanently capped at its current development potential with no remaining right to sell -- while a parcel with unsevered TDRs may carry real, separately monetizable value beyond the land's value for continued agricultural or single-home use. This detail can materially affect what a specific Agricultural Reserve parcel is actually worth and what future flexibility it retains, and it will not necessarily be obvious from the deed alone without asking directly.

What this means if you're buying in a receiving district

If you're evaluating land or a home in one of Montgomery County's designated TDR receiving districts -- generally denser, more developed areas of the county the program is intentionally designed to direct additional density toward -- understand that a neighboring parcel's use of purchased TDRs can result in higher-density development than the area's base zoning alone would suggest is likely. This isn't a defect in the system -- it is precisely how the program is supposed to work, redirecting development pressure away from the Agricultural Reserve and toward areas the county has already decided can support it -- but it is a genuinely relevant factor in evaluating a specific receiving-district neighborhood's future development trajectory, and worth asking the specific municipality about directly.

What to check before relying on this page for a specific Montgomery County parcel

1. Confirm whether the parcel sits inside the Agricultural Reserve's Rural Density Transfer Zone, and if so, its specific township's current zoning ordinance for the exact density cap and any conditional-use provisions.
2. Ask whether the parcel's Transferable Development Rights have been previously sold, and if not, what they might currently be worth to a developer working in a receiving district.
3. If buying in a receiving district, ask the specific municipality whether nearby parcels have used, or are likely to use, purchased TDRs to build at higher density than base zoning allows.
4. Contact the Montgomery County Planning Commission directly for current program administration details, since TDR program rules and receiving-district boundaries can be amended over time.