FYI About PDR

The Land Conservation Tool Every Horse Lover Should Know 

Updated in 2026 from an earlier article by Jennifer M. Keeler for the ELCR 

Horse enthusiasts are all too familiar with stories of family farms and equestrian facilities being swallowed up by suburban growth and development pressure. While these trends continue to challenge agricultural communities across the country, landowners have powerful tools available to help protect their farms, pastures, and hay fields. One of the most effective is a purchase of development rights (PDR) program, often implemented through agricultural conservation easements. 

PDR programs are voluntary initiatives that compensate landowners for permanently restricting future non-agricultural development on their property. They help preserve working farms, protect open space, and support the long-term viability of agriculture and equine operations. 

Despite a deep commitment to their land, many farm owners face difficult financial decisions when presented with lucrative offers from developers. PDR programs provide an alternative by allowing landowners to realize a portion of the property’s development value while retaining ownership and continuing agricultural use. 

A PDR program typically involves a public agency or land trust purchasing the development rights associated with a property. Once an agreement is finalized, a conservation easement is recorded that restricts future residential, commercial, or industrial development. The easement remains attached to the property regardless of future ownership and helps ensure that the land remains available for agriculture, equine activities, or other approved open space uses. 

 

A Successful Example in Kentucky 

One of the nation’s most recognized agricultural land preservation efforts is located in Fayette County, Kentucky. Fayette County’s PDR program was the first locally funded agricultural purchase of development rights program established in Kentucky and has served as a model for communities across the country. 

With a long-term goal of protecting 50,000 acres of farmland, the program has permanently conserved more than 304 farms encompassing approximately 33,300 acres. Protected properties include horse farms, general agricultural operations, and other working lands that contribute to the county’s agricultural economy and internationally recognized equine industry. 

Among the farms protected through the program is Waterwild Farm, owned by the Millard family of Lexington. The 530-acre farm supports horses, hay production, cattle, corn, soybeans, and other agricultural enterprises. 

“Waterwild Farm has been in my family since 1883, so finding a way to preserve this heritage was important to us,” said owner Jamie Millard. “The more we looked at the PDR potential, the more good sense it made.” 

 

How It Works 

Landowners interested in participating in a PDR program typically submit an application for all or a portion of their property. Most programs conduct periodic application cycles and evaluate properties using a point-based scoring system. 

Selection criteria often include factors such as: 

• Acreage and agricultural viability 

• Soil quality and productivity 

• History of active farming 

• Proximity to other conserved land 

• Environmental resources and wildlife habitat 

• Historic, scenic, or cultural significance 

• Location within designated agricultural preservation areas or greenways 

When a property is selected, an independent certified appraiser determines the value of the development rights. This value generally represents the difference between the property’s unrestricted market value and its value if permanently restricted to agricultural or conservation uses. 

Based on the appraisal and available funding, the governing agency may make an offer to purchase the development rights. Funding for these acquisitions often comes from a combination of local, state, federal, and private conservation sources. 

By providing compensation for development rights, PDR programs allow landowners to preserve their farms while strengthening their financial position. Funds may be used to pay down debt, improve infrastructure, purchase equipment, invest in fencing and facilities, or support business expansion. 

“With proceeds from PDR, we were able to make substantial improvements to the property and equipment,” explained Millard. “In the process, we added the equine division to the farm, converting a former tobacco barn into stables, and also developed a hay production program.” 

 

Donated Conservation Easements vs. Purchase of Development Rights Easements 

While both donated conservation easements and Purchase of Development Rights easements permanently protect land from future development, there is an important distinction between the two. 

In a donated conservation easement, the landowner voluntarily conveys the development rights to a qualified land trust or government agency without receiving direct payment for those rights. Depending on the property’s characteristics and applicable tax laws, the landowner may be eligible for certain federal or state tax benefits. Because tax consequences vary and laws change over time, landowners should seek advice from qualified tax and legal professionals before pursuing this option. 

In a PDR easement, the development rights are purchased by a government agency, land trust, or conservation organization. The landowner receives compensation based on the appraised value of the development rights being conveyed.  

Both approaches result in a permanent conservation easement that remains attached to the land regardless of future ownership. In either case, the property generally remains in private ownership and can continue to be used for agriculture, equine activities, and other uses permitted by the easement. The primary difference is whether the landowner donates the development rights or receives payment for them. 

PDR is one method of creating a conservation easement, whereas a donated easement achieves similar conservation goals through a charitable donation rather than a public purchase. In some cases, conservation projects combine elements of both approaches. A landowner may sell a conservation easement for less than its full appraised value, receiving partial compensation while donating the remaining value. This arrangement, known as a bargain sale, can help stretch conservation funding while still providing financial benefits to the landowner.  

In a bargain sale, instead of receiving the full appraised value of the easement, the landowner agrees to sell it for less than its appraised value. The difference between the easement’s appraised value and the amount paid may qualify as a charitable donation, subject to applicable tax laws and IRS requirements. 

For example: 

• Appraised value of the conservation easement: $1,000,000  

• Conservation organization or PDR program can pay: $700,000  

• Landowner accepts: $700,000  

• Remaining value: $300,000  

In this example, the landowner receives $700,000 in cash and may be able to treat the remaining $300,000 as a charitable gift. The conservation organization acquires the easement at a lower cost, allowing limited conservation funds to protect more land. 

Bargain sales are often used when: 

• Public conservation funds are insufficient to pay full easement value.  

• A landowner wants both compensation and conservation benefits.  

• A family wishes to preserve a farm while supporting a land trust’s conservation mission.  

• Multiple funding sources are combined in a single transaction. 

 

PDR Programs Across the Country 

While Fayette County’s program is among the nation’s most recognized examples, Purchase of Development Rights programs have been successfully implemented in communities across the United States for decades. 

States such as Maryland, Pennsylvania, New Jersey, Delaware, and Massachusetts have long-standing agricultural land preservation programs that have permanently protected hundreds of thousands of acres of farmland through the purchase of conservation easements. Many counties and municipalities in these states supplement state funding with local conservation initiatives, creating strong partnerships that help keep working farms in agricultural use. 

In the Midwest, states including Ohio and Michigan have used agricultural easement programs to conserve productive farmland and protect rural landscapes. In the West, communities in Colorado and California have employed similar approaches to preserve ranchlands, agricultural valleys, and open space threatened by development pressure. 

Although program structures and funding sources vary from one location to another, the underlying goal remains the same: providing landowners with a voluntary, market-based option to permanently conserve agricultural land while retaining private ownership and productive use of the property. 

The following areas are often cited nationally as some of the most successful and influential agricultural PDR efforts which have protected substantial amounts of land associated with equine and agricultural industries. 

• Fayette County, Kentucky  

• Lancaster County, Pennsylvania  

• Maryland’s Agricultural Land Preservation Foundation program  

• New Jersey’s State Agriculture Development Committee (SADC) program  

 

Estate Planning and Farm Succession 

Conservation easements can also play a significant role in estate and succession planning. Because development rights have been removed, the market value of a conserved property may be lower than that of comparable unrestricted land. This can make it easier for future generations to retain ownership and continue agricultural operations. 

However, tax and estate-planning outcomes vary significantly based on individual circumstances and current federal and state laws. Landowners should consult qualified attorneys, accountants, tax professionals, and financial advisors to understand the potential implications for their specific situation. 

For many families, conservation easements provide a pathway to keep farmland intact, helping reduce pressure to sell land for development when ownership transitions from one generation to the next. 

 

PDR Programs Continue to Evolve 

Agricultural conservation programs have expanded considerably in recent years. In addition to traditional PDR programs that focus on larger farms, some communities have introduced new conservation options designed to serve smaller agricultural properties. 

Fayette County, Kentucky, for example, recently established a Small Farm Conservation Easement Program that provides conservation opportunities for qualifying farms between 10 and 20 acres. The initiative recognizes the growing role that smaller farms play in preserving rural character, supporting local food systems, and maintaining the agricultural landscape. 

These evolving programs demonstrate that farmland conservation is not limited to large agricultural operations. Farms of many sizes can contribute to the protection of working landscapes and equestrian communities. 

 

A Decision for Generations 

A landowner’s decision to participate in a PDR or agricultural conservation easement program is one of the most significant long-term decisions affecting a property’s future. While these programs provide financial compensation and permanent protection against development, they also establish lasting obligations that will affect future owners and heirs. 

Before entering a conservation agreement, landowners should work closely with family members, attorneys, tax professionals, financial advisors, and program administrators to fully understand the benefits, restrictions, monitoring requirements, and long-term implications associated with the easement. 

For many horse farm owners and agricultural producers, however, PDR programs offer a unique opportunity to preserve a cherished way of life while ensuring that productive farmland remains available for future generations. 

 

Related ELCR Resources 

Interested in protecting your horse farm or working land? Explore these ELCR resources to learn more about conservation options.

• Conservation Easements as a Tool for Protecting Horse Land
  Learn how conservation easements can help protect horse farms, pastures, hay fields, and other equine landscapes while allowing landowners to retain ownership and continue agricultural uses. (ELCR – Equine Land Conservation Resource) 

• Purchase of Development Rights Programs in the U.S.
  Explore how PDR programs operate across the country and how communities use conservation easements to protect agricultural land, open space, and working landscapes. (ELCR – Equine Land Conservation Resource) 

• Agriculture Districts: Potential Benefits for Horse Farm Owners and Hay Producers
  Learn how agricultural districts can support working farms and provide additional protections and incentives for horse owners and agricultural producers. (ELCR – Equine Land Conservation Resource) 

• Conservation Tools for Horse Lands
  Explore additional land conservation tools available to protect horse farms, ranches, trails, hay fields, and other equine-related lands. (ELCR – Equine Land Conservation Resource) 

• Frequently Asked Questions: Land Conservation
  Find answers to common questions about protecting horse land, conservation easements, and working with land trusts and conservation organizations. (ELCR – Equine Land Conservation Resource)