transferable development rights

transferable development rights (TDR)

A zoning and land planning tool often used to preserve undeveloped or culturally significant areas. Typically, the local government will identify an area it wants to retain in a natural state, such as farmland, called the sending area. Government will also identify an area in need of development, usually through rehabilitation, called the receiving area. To meet those two goals—preservation one place,development in another—government will buy development rights from the farmers, for example. The farmers will agree to restrict their land so it cannot be developed. In return, they will receive something in the nature of credits that allow zoning variances in the receiving area.The farmer may sell those credits to a developer who wishes to build or renovate something in the receiving area.The farmer gets cash, the developer gets its variance,some land is preserved,and other land is rehabilitated,all with a minimum of bureaucratic involvement along each step of the way.