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Transferable development rights (TDR) is a method by which developers can purchase the development rights of certain parcels within a designated "sending district" and transfer the rights to another "receiving district" to increase the density of their new development. The underlying legal concept of a transfer of development rights programme is the notion that all land has a bundle of property rights. It is used for controlling land use to complement land-use planning and
zoning Zoning is a method of urban planning in which a municipality or other tier of government divides land into areas called zones, each of which has a set of regulations for new development that differs from other zones. Zones may be defined for a si ...
for more effective urban growth management and land conservation.


Description

The TDR process can be considered a tool for controlling
urban sprawl Urban sprawl (also known as suburban sprawl or urban encroachment) is defined as "the spreading of urban developments (such as houses and shopping centers) on undeveloped land near a city." Urban sprawl has been described as the unrestricted growt ...
by concentrating development. TDR is a legal mechanism offered in some local government jurisdictions as a form of
development Development or developing may refer to: Arts *Development hell, when a project is stuck in development *Filmmaking, development phase, including finance and budgeting *Development (music), the process thematic material is reshaped * Photograph ...
control. In the United States, TDR are also a way to avoid constitutional takings issues caused by rezoning areas that would otherwise eliminate a significant amount of value from the property. The procedure offers landowners financial incentives or bonuses for the conservation and maintenance of the environmental, heritage or agricultural values of their land. TDR is based on the concept that with land ownership comes the right of use of land, or land development. These land-based development rights can in some jurisdictions be used, unused, sold, or otherwise transferred by the owner of a parcel. Sending districts are commonly made up of areas with desirable traits that are at risk of being developed such as agricultural lands or wilderness areas, but may also be newly designated historic sites. Alternatively, parcels with buildings that do not use all of their available size have "excess" developable capacity that can be conveyed to other parcels, possibly adjoining the first parcels. Receiving districts are typically are located in urban areas that are ripe for development. Receiving districts are generally areas more suited for higher density developments and sending districts are areas with environmental, heritage or agricultural values that the county, city or town wishes to preserve. TDR credit banks can be used to store development rights that have been purchased, if a receiving area development project has not yet been identified. This mechanism is used when the time of the sale in the sending area is not concurrent with a development in the receiving area. It is also useful in communities that have the opportunity to purchase the rights from an area of high conservation interest but do not have a development project that can receive higher density at the time. In Massachusetts it is recommended that TDR credit banks be operated by a third party organization that is empowered to negotiate the sale of development rights, such as a non-profit organization or an agency operating within the community.


Notable examples

A widely-noted example of districted TDRs is the
Montgomery County, Maryland Agricultural Reserve The Agricultural Reserve is a designated land use zone in Montgomery County, Maryland. The zone was created in 1980 by the Montgomery County Council to preserve farm land and rural space in the northwestern part of the county. The farmland prote ...
. TDR programs have been implemented in over 200 U.S. communities, in several states, including
Colorado Colorado (, other variants) is a state in the Mountain states, Mountain West subregion of the Western United States. It encompasses most of the Southern Rocky Mountains, as well as the northeastern portion of the Colorado Plateau and the wes ...
,
Massachusetts Massachusetts (Massachusett: ''Muhsachuweesut Massachusett_writing_systems.html" ;"title="nowiki/> məhswatʃəwiːsət.html" ;"title="Massachusett writing systems">məhswatʃəwiːsət">Massachusett writing systems">məhswatʃəwiːsət'' En ...
,
Virginia Virginia, officially the Commonwealth of Virginia, is a state in the Mid-Atlantic and Southeastern regions of the United States, between the Atlantic Coast and the Appalachian Mountains. The geography and climate of the Commonwealth ar ...
and
Washington Washington commonly refers to: * Washington (state), United States * Washington, D.C., the capital of the United States ** A metonym for the federal government of the United States ** Washington metropolitan area, the metropolitan area centered o ...
. New York City has limits to the air rights of each building, but those are freely transferable. One of the most famous examples of a TDR is in the case of ''
Penn Central Transportation Co. v. New York City ''Penn Central Transportation Co. v. New York City'', 438 U.S. 104 (1978), was a landmark United States Supreme Court decision on compensation for regulatory takings. Events leading up to the case New York City Landmarks Law The New York City La ...
'' (1978). The
United States Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point o ...
held that the city's
Landmarks Preservation Commission The New York City Landmarks Preservation Commission (LPC) is the New York City agency charged with administering the city's Landmarks Preservation Law. The LPC is responsible for protecting New York City's architecturally, historically, and cu ...
did not deny the owners of Grand Central Terminal all economic value by denying them the right to build an office building above the station. The terminal owners possessed
air rights Air rights are the property interest in the "space" above the earth's surface. Generally speaking, owning, or renting, land or a building includes the right to use and build in the space above the land without interference by others. This lega ...
which could be used as a TDR to build higher than the conventional zoning allowed on their other properties.


See also

*
Comprehensive planning Comprehensive planning is an ordered process that determines community goals and aspirations in terms of community development. The end product is called a comprehensive plan, also known as a general plan, or master plan. This resulting document e ...
* Environmental planning


References

{{Reflist Environmental planning Land use Land law