From ArborWiki

In 2003, Ann Arbor voters overwhelmingly approved a 0.5 mill, 30 year property tax to preserve natural and agricultural land outside of the city. The program is expected to raise at least $87 million, to be coordinated with preservation millages in the Townships and any grants available. The City made its first purchases of development rights (PDR) in 2005. While the greenbelt millage was ostensibly a "parks" millage, most of the money will not be used for parkland in the traditional sense. The first several purchases made have been of the development rights on working farmland, with the assistance of Federal grants for farmland preservation; that land will remain with the current owners rather than becoming part of the public domain.

The mechanism of a PDR is to separate out the right to develop (build upon) land from the "bundle" of rights that go with that land - the owners retain other rights, such as the right to forbid access and the right to sell the land. With the development rights separated, however, and locked into a conversation easement, the land can never be turned into a subdivision or a strip mall. This provides benefit for Ann Arborites by limiting suburban sprawl, maintaining habitat and working farms (and therefore the City's ability to host a Farmer's Market), and protecting the Huron River watershed from the increased runoff of contaminated stormwater that low-density development creates. On the landowner's side, the PDR reduces land value drastically, removing the investment value of agricultural land, but provides a large quantity of cash in exchange, which the landowner can use as an alternate investment. The reduced value of the land additionally reduces the property tax burden on the landowner.

Mike Garfield, of the Ecology Center and a member of the Ann Arbor Greenbelt Advisory Committee, has suggested that the greenbelt fund provides the opportunity for Ann Arbor to approximate a transfer of development rights (TDR) program, in which development rights are separated from one parcel - preserving that land from development - and adding it to another parcel, generally within an already built-up area. Developers desiring to create denser projects than the existing zoning allows, in this model, could pay a predefined amount of cash into the greenbelt fund in exchange for the extra density, making the additional density not actually additional, but simply a movement of that use from low-density development to high-density development. Running a TDR program via the greenbelt fund would have the added benefit of allowing land preservation experts to use the money to buy development rights as part of a coordinated regional strategy, rather than having haphazard purchases made by individual developers.