Results of an Agent-Based Market Simulation for Transferable Development Rights (TDR) in Switzerland

Abstract

Transferable development rights (TDR) are discussed or applied in various countries for a wide variety of purposes: Notably to increase building densities, preserve natural areas, compensate reduced development possibilities, and control land use in rural areas. In Switzerland, TDR, a market-oriented planning instrument, might be used to reduce the land-use problems related to the unsustainable development of the settlement areas and to manage problems with the spatially imbalanced supply and demand of existing undeveloped building zones. Our aim is to briefly introduce a TDR market concept for Switzerland, present an empirically calibrated agent-based TDR market simulation, and finally analyze the detailed simulation results. We ran the simulation with four different settings which allowed an analysis of relevant political and economic questions for Switzerland. The results show that the TDR prices were comparable with existing land prices in Switzerland. In addition, we are able to show that with the trade of TDR it would be possible to downzone 11.4 km2 of building zone land for which there is no demand and to develop 7.4 km2 of new building zone land up to the year 2018. Consequently, the defined building zone area would decrease, which would be in line with political objectives.