Chapter 1.2
Low-Impact Development and Stormwater Management

• ALL
• Remove Code Barriers
• Create Incentives
• Fill Regulatory Gaps

Stormwater Management Credits for Providing Agricultural Land or Open Space

INTRODUCTION

Every hour, 180 acres of farm and ranch land are lost to development.[1] This equates to over 30 million acres since 1982—about the size of Mississippi.[2] It is predicted the U.S. will lose another six million acres of viable farmland in the next several years.^[3] A significant contributor to the loss of farmland is sprawling and at times inefficiently planned housing and commercial development.[4] One way to encourage the continued use of land for agricultural purposes and to mitigate the loss of farmland is to allow landowners to receive stormwater management credits for keeping land in agriculture. Stormwater management techniques are designed to address runoff from both public and private land. These techniques are frequently written into zoning codes and construction permits for development.[5]

Green infrastructure is a form of stormwater management that is designed to “mimic nature by soaking up and storing water.”[6] Green infrastructure can be implemented in urban and rural areas and in a multitude of ways that support resilient stormwater management practices.[7] Many local governments allow landowners to receive stormwater management credit for implementing green infrastructure strategies. One such strategy is to maintain agricultural land in the face of development pressures. Further, the enacting government can allow for the trading of stormwater management credit—property owners who are required to establish stormwater management practices can purchase credits from other property owners.[8] Credit trading programs are effective when certain development projects (frequently on urban parcels with little to no area for stormwater management practices) are required to implement runoff prevention during their development process. These developers have the option to buy credits from property owners who voluntarily implemented stormwater management practices on their land and were given a credit pursuant to the code.[9]

Stormwater runoff can be absorbed by agricultural land through dispersion and infiltration.[10] Dispersion works by spreading stormwater over a larger area than where it would naturally fall or collect; the water then “infiltrates” the ground through natural systems and replenishes groundwater supplies.[11] Retaining this water on the land can be beneficial for groundwater supplies and for the agricultural land, which can use this recharged groundwater and aquifers for irrigation. Additionally, water retention practices on agricultural land can prevent contaminated water from running off into the surrounding town or city’s drinking water supply.

Many local governments incorporate stormwater management credits into stormwater management requirements as a way to tailor green infrastructure to meet the specific needs of the jurisdiction. Some, for example, apply credits to calculate stormwater utility fees, while others apply credits to calculate property taxes.[12] Localities wishing to address stormwater runoff can use the credit-based system to encourage desired management practices to effectively, safely, and efficiently control stormwater.[13] In addition to putting the credit system in place based on stormwater needs, the locality can decide how to review and approve each application for credit.

Stormwater management credits can be applied to urban and suburban agriculture. Urban and suburban areas typically consist of large and impervious surfaces, causing excess stormwater to run off toward outdated sewer systems.[14] In communities and neighborhoods where urban gardens or urban and suburban agriculture are allowed, stormwater management credits can be granted to abate a property tax or fee and increase stormwater retention. Agricultural land, even when used in urban and suburban areas, can effectively infiltrate stormwater—if managed correctly. Urban soils are often highly compacted, but “deep tillage, and the addition of compost and cover cropping dramatically increase[s] infiltration and water-holding capacity”[15] (see our brief on Development Restrictions to Protect Prime Soils and our brief on Reduce Soil Compaction during Construction). Likewise, governments can include open space in their definitions, code, or language to mitigate stormwater runoff (see our brief on Offsetting Agricultural Land Loss Stemming from New Development and Permit Commercial Agricultural Activities in Urban/Suburban Areas and Allow Them to Satisfy Open-Space Requirements).[16] Many of the stormwater management practices discussed in this brief are applicable to lots with open space. Assuming that these parcels of land have exposed soil, property owners could take the requisite steps to effectively manage stormwater runoff on their property and receive stormwater management credit for doing so.

When local governments look to the ordinances discussed below, they will see that local governments establish some type of fee, utility, or property tax that is based on the costs of treating and dealing with stormwater runoff. Once the fee is established, the government will generally implement a stormwater management credit that is granted to property owners who take adequate actions to prevent and address runoff. That credit either reduces or eliminates the stormwater fee; it is frequently capped at a certain percentage of the fee. Local governments should clearly define and enumerate acceptable management practices that will count towards the stormwater management credit. Finally, there is sometimes a review board that approves or denies the applications for stormwater management credits. Ideally, this would be as streamlined a process as possible, so that property owners can quickly and efficiently implement stormwater management practices and be compensated for doing so.

EFFECTS

Urban and suburban areas contain large areas of impervious materials, such as concrete and asphalt. Impervious surfaces contribute to stormwater runoff with increased pollutants.[17] The health and environmental effects of increased runoff and pollution are numerous and include flooding, contaminated drinking water, and increased costs of water treatment.[18] Taking effective and intentional steps to manage and mitigate the effects of stormwater runoff can provide environmental, health, and economic benefits.[19] Governments and municipalities that wish to reduce the effects of stormwater runoff can grant stormwater management credit for a variety of land uses and properties.

Stormwater runoff from urban areas “carries pollutants such as oil, dirt, chemicals, and lawn fertilizers directly to streams and rivers.”[20] This polluted water impacts the environment and ecosystems at every level—contaminating aquatic life, increasing water acidification, and causing algal blooms.[21] Polluted runoff from agricultural land is notorious for causing algal blooms in lakes by introducing nutrients into the water system, which stimulates plant growth. This is often followed by a die-off of plant and animal life due to reduced oxygen levels in the water. This whole process is often referred to as eutrophication.[22]

It is estimated that water pollution caused in part by stormwater runoff killed 1.8 million people in 2015.[23] Waterborne pathogens, generally stemming from bacteria and viruses related to human and agricultural waste, can spread diseases such as cholera, giardiasis, typhoid, and Legionnaires’ disease.[24] Aging water management infrastructure also causes serious issues, such as the lead contamination crisis that has been ongoing in Flint, Michigan.[25] Allowing and encouraging natural filtration systems prevents a large amount of pollutants from entering our managed water systems.[26] Granting stormwater management credit provides an incentive to encourage property owners to implement runoff management practices to avoid some of this effects.

A case study of Lancaster, Pennsylvania, revealed that implementing green infrastructure plans to appropriately manage stormwater runoff over a 25-year period would save the town $120 million in avoided capital costs.[27] While calculating the economic benefits of environmental activities may be somewhat nebulous, this study shows the potential for towns to save large amounts of money over long periods of time.

Increased stormwater runoff also impacts floodplain management challenges; shifts in urbanization over the last century increase the likelihood of flooding.[28] Efforts to reduce erosion, flooding, and the entry of pollutants and sediment into streams and groundwater are being used to manage stormwater at every level of government.[29] Natural ground cover typically results in 10 percent runoff; the increase in paved surfaces in urban and suburban areas can increase runoff by 20 and 50 percent.[30]

EXAMPLES

Montgomery County, MD

Montgomery County, Maryland, has Stormwater Management Credits (SMC) that can be applied to 80 percent of the Water Quality Protection Charge (WPQC), which is a property tax for property-owning residents of Montgomery County.[31] The SWC is applicable when property owners “maintain stormwater management practices” on their land.[32] Montgomery County’s Department of Environmental Protection defines stormwater management credits as either landscaping techniques or structures that reduce stormwater runoff.[33] Six management practices are listed from “more than 10,000” practices in Montgomery County: rain gardens, permeable pavements, stormwater ponds, conservation landscaping, green roofs, and grass swale.[34] These practices, in addition to a multitude of the additional management practices, can be implemented in a variety of locations, including agricultural land and open spaces.

For property owners who either want to implement stormwater management practices or are mandated to do so by the county, Montgomery County established the RainScapes program.[35] This program, in addition to helping install stormwater management practices, can provide financial incentives to abate the cost of installation. Property owners only need one stormwater management practice to receive an SMC, but the percentage of the WPQC that the credit applies to varies based on the stormwater management technique and the volume of water treated.[36] High-intensity techniques, such as bioretention, award a larger credit than low-intensity techniques, such as rain gardens and barrels.[37] A cap of 80 percent of the WPQC can be awarded, and the application for the SMC must be submitted by September 30 each year.[38]

To view the provision see Montgomery County, MD, Code of Regulations § 19.35.01.05 (2020).

Springfield, OH

In May 2011, Springfield established a Stormwater Utility, the purpose of which is to “provide efficient and effective management and financing of a Stormwater System within the City.”[39] Pursuant to the Stormwater Utility, Stormwater Fee Credits (SFCs) can be awarded in a variety of ways, and multiple SFCs can be combined by one property owner; however, Springfield caps SFCs at 75 percent of the total Stormwater Utility.[40] SFCs can be awarded as either water quantity credits or water quality credits.[41] Both credits are available for every property in Springfield, but the property owner has the burden of showing how their management practices “will reduce the impact of stormwater generated from their immediate property.”[42]

The water quantity credit is based on stormwater flow reduction into the stormwater system.[43] Three stormwater management facilities or practices are listed in the SFC policy manual: bioretention or rain garden, rain barrel or cistern, and disconnected drain spouts.[44] For each of these practices, referred to as “enhanced design facilities or practices,” a flow reduction requirement is established: 25 percent retention for rain gardens, 100 gallon rain barrels for homes (15 percent of runoff from one inch of rain for businesses), and 75 percent of downspouts directed to a flat or concave pervious area, at least 10 feet by 15 feet.[45] Each of these enhanced design practices awards a 50 percent credit for the Stormwater Utility.[46]

The water quality credit is awarded for runoff that has been treated on the property, with SFCs capped at 15 percent of the Stormwater Utility.[47] The purpose of a water quality credit is to incentivize property owners to reduce the amount of pollution in stormwater runoff.[48] The SFC policy manual stipulates that enhanced design facilities or practices used for water quality credits must be listed in the U.S. EPA’s National Menu of Stormwater Best Management Practices.[49] Listed examples of acceptable best management practices include vegetated swales, green roofs, porous pavement, retention ponds, and any other practice “approved by the Stormwater Coordinator.”[50] Details on the application process and fee adjustments can be found in the Stormwater Policy Manual.

To view the provisions see Springfield, OH, Code of Ordinances ch. 918 (June 6, 2015).

Greenville, SC

Greenville, South Carolina, established a stormwater management utility to manage and regulate stormwater runoff.[51] The purpose of Greenville’s Stormwater Credit Policy is to “provide[] financial incentives for property owners who substantially mitigate the effect of stormwater runoff from their property.”[52] There are four ways to get a stormwater credit, three of which are relevant here: stormwater quantity credit, stormwater quality credit, and the Annual Certification credit.[53] The application for a stormwater management credit is available on Greenville’s website.[54] Stormwater credits are available for “any commercial, industrial, institutional, or multi-family residential property” that is already subject to the stormwater utility fee.[55] This broad range of allowable land uses gives property owners the ability to implement management practices almost anywhere—especially in agricultural and open-space land.

An annual cap of 70 percent of the stormwater utility fee may be granted through stormwater credits.[56] This stormwater quantity credit can award up to 100 percent of the stormwater utility fee for a single year upon the addition of a stormwater detention facility.[57] Stormwater quantity credits can also be awarded for upgrading an existing detention facility.[58] Stormwater quality credits can cover up to 50 percent of the utility fee with the addition of Water Quality Best Management Practices (BMPs).[59] Nine BMPs are listed in Table 2a, which establishes the “adopted effective water quality factor” for each BMP.[60] This water quality factor is a percentage used to calculate the credit awarded to the property owner for implementing the BMP.[61] These BMPs include natural stream buffers, natural infiltration, wet and dry detention ponds, stormwater wetlands, and bio-filters.[62] Additional BMPs beyond those listed in Table 2a will be considered for credit on a case-by-case basis.[63] An Annual Certification Credit Application Form must be submitted between April 15 and May 15 each year to the Greenville Environmental Engineering Division to renew the stormwater management credit.[64]

To view the provision see Greenville, SC, Code of Ordinances § 19-7.4 (March 10, 2020).

ADDITIONAL EXAMPLES

Scott Township, PA, Stormwater Utility Ordinance § 301 (Nov. 10, 2009) (including open spaces in the definition of “lot” for stormwater management application purposes).

ADDITIONAL RESOURCES

Sarah Dougherty et. al., How To: Stormwater Credit Trading Programs, Natural Resources Defense Council 1, 3 (Feb. 2016).

Urban Agriculture as a Green Stormwater Management Strategy, The Freshwater Society, 1 (Feb. 2013).

The Economic Benefits of Green Infrastructure, Envtl. Protection Agency, 1, 11 (Feb. 2014) (studying the economic benefits of green infrastructure and stormwater management).