Transfer of Development Rights

A transfer of development rights (TDR) program allows landowners to transfer the right to develop one parcel of land to a different parcel of land. TDR programs can be established by local zoning ordinances.  TDR is used to shift development from undeveloped or agricultural areas to designated growth zones that help to concentrate growth and preserve open space. The parcel of land where the rights originate is called the “sending” parcel. When the rights are transferred from a sending parcel, the land is restricted with a permanent conservation easement. The
parcel of land to which the rights are transferred is called the “receiving” parcel.

TDR programs are based on the concept that property owners have a bundle of different rights and that some or all of these rights can be transferred or sold to another person. When a landowner sells property, generally all the rights are transferred to the buyer, but TDR programs enable landowners to separate and sell the right to develop land from their other property rights. 

Most TDR transactions are between private landowners and developers. Local governments generally do not have to raise taxes or borrow funds to implement TDR. A few jurisdictions have experimented with public purchase and “banking” of development rights. A TDR bank buys development rights with public funds and sells the rights to private landowners.

BENEFITS OF TDR
· Permanent protection of land.
· Keeps land in private ownership.
· Participation is voluntary.
· Promotes quality growth by concentrating development in existing areas.
· Allows landowners to protect their equity without developing their land.
· Can help to protect a variety of land uses - open space, agricultural lands, historical landmarks, etc.