Transfer of development rights

From HousingWiki

A transfer of development rights (TDR) program (also called transferable development rights) allows additional density where the community wants to grow in exchange for preservation of sensitive areas that the community wants to protect from future development. This tool requires an adopted plan that clearly identifies areas the community desires to preserve or protect from development (“sending areas”) and areas where growth and development are encouraged (“receiving areas”). A potential developer who owns property in a receiving area may purchase development rights (either from a TDR bank or directly from a property owner in the sending area) to boost their overall development potential; that additional potential could come in the form of additional buildings, additional height, additional density, or some other form established by the jurisdiction. Similarly, a property owner in a sending area may have limited building potential, but can realize a financial return by selling their development rights to an owner in a receiving area. [1]


TDRs have been used successfully in Colorado for decades to protect environmental resources, agricultural land, historic areas, and areas susceptible to natural hazards, such as steep slopes and floodplains, which often are identified as sending areas.[1]

Denver County

Denver has dabbled in TDR on some occasions, but use was mostly historical (1980s-2000) in the downtown. Many TDRs were severed from Larimer Square, but must be used within the same city district (downtown). Today, while it is likely that these TDRs, there is little need for them to be sold and used - both height limits and base FAR allowance have increased in downtown to the point where developers do not need additional FAR for their projects. - (citation needed, the aforementioned is hearsay)

As of 2020, one project is known to be using TDRs: the Downtown Denver Marriott (14th/Stout) that is under review. Without TDRs they would not be allowed to build to the height as proposed based on the lot size.

Summit County

Has a robust TDR program that protects environmentally sensitive areas from development. The program is divided into four geographically specific TDR areas, generally protecting rural backcountry parcels (sending areas) in exchange for more development in the urban (receiving) areas. Summit County’s program also includes “neutral areas” and “optional areas.” Neutral areas are parcels that are not suitable for either sending or receiving development rights, and are not eligible for sending or receiving density. Optional areas include parcels that are determined to be suitable for either sending or receiving density. Summit County explored options for directly addressing natural hazards, in particular wildfire, through the TDR program.[1]

Routt County

Established a Purchase of Development Rights (PDR) Program in November 1996 and reauthorized the program in 2005 with increased funding through 2025. The program is intended to provide landowners a financially viable alternative to selling land for development by compensating them for the development rights on their land. Agricultural lands and natural areas (including wildlife habitat and riparian areas) have been the focus of the preservation efforts. An Advisory Board assists the County Commissioners in administering the program and selecting sites for acquisition (Routt County PDR, 2015).[1]

Miscellaneous notes

from [Hills & Schleicher 2015]:

  • "The solution to this housing crisis is economically simple but politically difficult. As a matter of economic rationality, local governments should deregulate their housing markets to allow an increased housing supply to meet a rising demand for housing. As a political matter, however, incumbent residents who already own housing vociferously and effectively protest against the reduction of zoning restrictions."
  • "How, then, to free up urban land markets from the stranglehold of zoning driven by NIMBY (not-in-my-back-yard) neighbors? We argue, paradoxically, that the solution to excessive zoning is centralized, comprehensive, and binding land-use planning.
  • "We argue in Part III.A that binding, comprehensive plans allow legislators to create “contracts” across electoral districts that are otherwise impossible when zoning proceeds through piecemeal lot-by-lot bargaining." Comprehensive plan. 
  • "We argue in Part III.B that parcel-by-parcel bargaining imposes high information costs on outside investors, thereby reducing the market for investment in new housing to a handful of local insiders with incentives to constrain supply."
  • "Prescriptions below in Part IV, including the idea that mayors and city planning departments ought to regularly redraw the citywide zoning map to comprehend all pending development proposals, a process that would look something like an annual budgeting process. [see Zoning budget -Yimbywiki]. Other proposals include fixed prices, defined ex ante in the zoning ordinance, for additional building rights [see Transfer of development rights -Yimbywiki] and prohibitions on any downzoning until citywide housing goals, defined with hard figures like vacancy rates or building permits issued, are met." 


  • Hills, Roderick M. Hills, and David Schleicher. "Planning an Affordable City." 101 Iowa Law Review 91 (2015).
  • Schleicher, David, "Balancing the Zoning Budget." (2011). Faculty Scholarship Series. 4955.
    "The politics of urban land use frustrate even the best intentions. A number of cities have made strong political commitments to increasing their local housing supply in the face of a crisis of affordability and availability in urban housing. However decisions to engage in "up-zoning"or increasing the areas in which new housing can be built, are often offset by even more "down-zoning" laws that decrease the ability of residents in a designated area to build new housing as-of-right. The result is that housing availability does not increase by anywhere near the amount that elected officials promised In this Article, we argue that the difficulty cities face in increasing local housing supply is a result of the seriatim nature of local land use decisions. Because each down-zoning decision has only a small effect on the housing supply, citywide forces spend little political capital fighting them, leaving the field to neighborhood groups who care deeply. Further, because down-zoning decisions are made in advance of any proposed new development, the most active interest group in favor of new housing-developers-takes a pass on lobbying. The result is an uneven playing field that favors downzoning."