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Transfer of Development Rights (TDR)
Practical Law Glossary Item w-002-5764 (Approx. 3 pages)
Glossary
Transfer of Development Rights (TDR)
A system of land use regulation that allows a property owner to transfer development rights to another property or to another landowner. If the development rights are sold separately from the ownership of the property, the owner continues to retain title and all other rights to the land. For example, if an owner of rural land sells the development rights to his property, he retains title and the right to farm on the land.
TDR programs vary from jurisdiction to jurisdiction, but a transfer of development rights generally permits:
- Development to occur in a more appropriate location.
- Increased density of permitted development (often controlled by floor area ratio (FAR)) on the receiving property.
- A permanent restriction on:
- the further development of the transferring property; and
- any later transfers of development rights from the transferring property.
However, external factors control the value of development rights, such as the stability of the real estate market, the availability of buildable land in the property's vicinity, and further local zoning restrictions.
States enact TDR programs because they are an effective means of:
- Encouraging development in locations that are:
- under-developed; or
- suited for high-density development.
- Avoiding regulatory takings claims.
- Preserving:
- historic buildings;
- environmentally sensitive areas;
- open space; and
- cultural resources.