OSD works in areas where development is expected and desired, and where natural features (like agricultural land, scenic views, bodies of water, or wildlife habitat) are worth preserving.

A municipality usually approves a subdivision that meets minimum requirements for the zoning district. Even if they want to give special permission (variances) to protect natural features, that may not be legal. To meet ordinances and make a venture profitable, the developer may need to break up features among several owners. New owners may not be able to preserve these features. OSD creates an opportunity to leave important features intact and protected.

OSD ordinances may support local goals for preserving community character, water resources, farming, wildlife, or other priorities. Various forms of these tools are preserving resources in communities around Michigan, and in other states.

• OSD may be either a requirement or an option.
• OSD may occur either in all zoning districts or only certain ones.
• OSD may occur throughout a district or only on lands that meet set criteria (overlay district).
• OSD may be allowed routinely (by right), or with permission (special use).

OSD may set a minimum of the parcel that must remain open space. (Some municipalities require as little as twenty percent or as much as eighty percent or more open space.)

OSD may require that all lots be clustered in small groups (perhaps from four to ten), with open space between clusters. Driveways usually link to shared lanes that branch from the new main road. Usually, no driveways link directly to that main road, or to existing county roads.

OSD fits well with large lot sizes. A large lot forty-acre subdivision can break valuable farmland or wildlife habitat into unusable fragments. With OSD, the same subdivision may retain a tillable thirty-acre field, or avoid all development in a twenty-acre forest or wetland.

OSD may set minimum lot sizes smaller than the usual minimum for the zoning district. This may be an area (perhaps between 0.75 and two acres), a percentage of the usual minimum, or other criteria. OSD also may allow a proportionately smaller road frontage for open space lots.

Open space in an OSD is permanently protected. A non-development agreement can exist with a municipality or land preservation organization, through deed restrictions, or other legal means. The agreement must be perpetual, so the open space can never be developed.

OSD can require all roads to be full-size, dedicated county roads, or allow some shared lanes to be narrower. Since through traffic does not use the shared lanes, maintenance may be less costly. Biking and other children's activities may be safer in shared lanes than on main roads.

OSD standards can require that open space be maintained in one way, or several. It could be kept for agricultural use; left natural; managed only with approved wildlife plans; mowed regularly; prepared as a recreational facility; or kept in other ways. Maintenance can be through a homeowners' group, or an organization that holds the non-development agreement.

Open space itself may be assessed at zero value, and each new lot may be assessed to include its portion of that value. This is similar to lakefront lots: although water may be assessed at zero, lots receive that value, and their assessments increase accordingly.

OSD usually must begin with a parcel between a minimum and maximum size (perhaps 40 to 160 acres). Minimum area assures that open spaces are large enough to be meaningful. Maximum area assures that single development clusters do not create entirely new villages.

OSD can provide considerable savings for concurrent or later infrastructure. For example, sewer can be much less costly to install than in a conventional subdivision with the same number of dwellings, since roadways and building setbacks are shorter.