Transferable Development Rights Research Articles

Transaction costs of implementing the transfer of development rights program in Milan

ABSTRACT Transfer of development rights (TDR) programs have been used in Italy over the last two decades for various purposes, e.g. to avoid expropriation. While previous research shows that implementing TDR programs at a regional level creates considerable transaction costs, there is no study concerning the costs generated by employing these programs at a city level. This paper addresses this gap through an analysis of the city of Milan’s TDR program. Results show that transaction costs in a fully market-based TDR program are mainly related to TDR contracting, monitoring and creation, influencing the efficacy of the program.

Assessing the acceptance of cultural policies among heritage homeowners: a study of Ahmedabad’s heritage TDR implementation, capacity building, and satisfaction

This paper examines the influence of the Heritage Transfer of Development Rights (HTDR) among heritage property owners and explores how its successful implementation has been hampered based on the study of two indicators—policy awareness and implementation efficiency—which are vital for generating initial interest among stakeholders and leading them to use the policy.The HTDR policy at Ahmedabad, introduced in 2015 as an incentive program supporting the conservation of privately owned properties within the old city of Ahmedabad, has failed to generate much interest among the local community. As per the documents available online on the website of Ahmedabad Municipal Corporation, in the last 9 years, only 81 properties with TDR certificates. It is thus very pertinent to identify the reasons for its lack of influence and acceptance. In this study, a mixed method was adopted involving a closed-ended survey and semi structured interviews. The inferences are based on the responses gathered from heritage property owners currently living in heritage properties and those living elsewhere. The heritage properties were identified based on a random sampling method from the listed heritage properties spread across the 13 wards of the walled city. Based on the research findings, although most property owners are aware of the HTDR policy and find it an essential tool for conserving heritage in Ahmedabad, awareness of the whole mechanism and application process is significantly limited.The implementation of the HTDR policy is highly inefficient, and more awareness must be generated among owners. Moreover, more training or technical assistance needs to be provided to them to help them access the incentive program. The lack of a proper and comprehensible policy brief or document further hinders the situation. Overall, property owners are not completely satisfied with the HTDR policy and suggest critical revisions, such as reducing the file clearance time, calculating a new TDR amount, and modifying the stages of fund disbursement.

STATISTICAL ANALYSIS OF DILAPIDATED AND DANGEROUS BUILDINGS IN INDIA: OPTIMIZING TDR ALLOCATION FOR URBAN REDEVELOPMENT

This paper presents a comprehensive statistical analysis of dilapidated and dangerous buildings across urban wards in India, focusing on optimising the allocation of Transferable Development Rights (TDR) for effective urban redevelopment. By integrating empirical data on building conditions, urban density, and redevelopment patterns, the study develops a dynamic framework that applies advanced statistical models to evaluate the efficiency of TDR allocations in high-risk zones. The research addresses critical issues of liquidity constraints, TDR hoarding, and inefficient redevelopment processes, proposing a refined mechanism for optimising TDR distribution through data-driven strategies. The proposed model balances redevelopment incentives with environmental and infrastructural sustainability by incorporating real-time market dynamics and environmental cost factors into TDR pricing. This study also includes case studies on slum redevelopment and real estate liquidity, offering actionable insights for policymakers to deploy TDR exchanges to accelerate urban regeneration. The findings contribute to the advancement of sustainable urban growth by offering a novel approach to resolving redevelopment inefficiencies while maintaining ecological balance.

ALGORITHMIC GOVERNANCE IN THE REAL ESTATE AND TDR EXCHANGE OF INDIA: A STATISTICAL FRAMEWORK FOR REGULATING URBAN INFRASTRUCTURE DEVELOPMENT

This paper presents a mathematical framework for algorithmic governance within the context of the Real Estate and Transferable Development Rights (TDR) Exchange of India, addressing the challenges of urban infrastructure development. The model incorporates key components such as dynamic pricing, compliance enforcement, and optimal resource allocation, which are designed to regulate TDR transactions efficiently, transparently, and sustainably. By developing a dynamic pricing mechanism that adapts to market demand, supply, compliance with regulations, and environmental sustainability factors, this framework ensures that TDRs are allocated to areas with the highest redevelopment potential.The framework integrates regulatory enforcement mechanisms that monitor adherence to urban planning regulations and impose dynamic penalties on non-compliance. The pricing model adjusts based on the demand-supply gap and local environmental constraints, encouraging sustainable urban growth. The paper also explores a multi-objective optimization approach to TDR allocation, ensuring that redevelopment potential is maximized while maintaining environmental thresholds. The proposed algorithmic model provides a scalable solution to urban infrastructure challenges, promoting balanced growth and sustainable resource utilization in Indian cities.

축소사회에서의 주거권 및 주거정책에 대한 고찰

Housing rights simultaneously embody the characteristics of civil, environmental, and social rights. From a social rights perspective, these rights, involving significant state financial investment, are often referred to as the right to survival that relies on state finances. It is a natural conclusion that alleviating floor area ratio restrictions to attract market funding while reducing the state’s financial burden is an effective way to supply rental housing and similar facilities. As society transitions into a shrinking one, significant concerns arise about the current generation’s consideration of future generations. In this context, uniform mass production and consumption-based developmental strategies are no longer valid or practical. Supply-oriented housing development can deprive future generations of developmental opportunities, severely undermining their housing rights. Current generations exploiting the floor area ratio may diminish development profitability for future generations, ultimately rendering development unfeasible. This is where the floor area ratio becomes a point of contention between current and future generations. The Transfer of Development Rights(‘TDR’) system enables landowners who cannot fully utilize their floor area ratio to transfer their “unused” floor area ratio to a third party, allowing that party to pursue high-density development. The TDR system is crucial for fostering equity between current and future generations while maintaining the total of overall floor area ratio. Moreover, it holds significant value in realizing housing rights within today’s shrinking society.

How can restricted farmland development rights be compensated to stimulate farmland protection? A provincial exploration in China

Stimulating farmland protection (FP) is crucial to ensure food security and environmental well-being. Some countries, including China, are seeking to incorporate transferable development rights (TDR) to realize economic incentives for FP. This study developed an indicator – planning regulation intensity on farmland (PRIF) – to describe the restricted farmland development rights (FDRs) and designed a compensation-oriented farmland transferable development rights (FTDR) mechanism. The threshold model and two-way fixed effect model were employed to unlock the transfer direction, quantity, and economic value of FDRs. Taking Hubei Province in China as the study area; the empirical research was conducted and demonstrated the necessity and feasibility of implementing the compensation-oriented FTDR mechanism in China. This study addresses the issue of unfair distribution of FDRs due to planning regulations and provides a promising economic-incentive policy instrument for curbing farmland loss. The FTDR mechanism considering PRIF that we propose enables the extension of TDR to countries that implement authority-exerted planning regulations.

Can ecological compensation based on the transfer of development rights (TDR) improve ecosystem service value? A multi-scenario simulation

The contradiction between economic development and environmental protection is becoming increasingly serious, and innovative ecological compensation policy is a key measure to solve this problem. The impact of the transfer of development rights (TDR) as an emerging ecological compensation model on the ecological environment is controversial, and there is a lack of empirical studies on this issue. Therefore, it is necessary to clarify whether TDR’s ecological compensation can improve the quality of the regional ecological environment. In this study, four scenarios of natural development, land use control, government compensation, and TDR compensation are constructed and simulated using the CLUMondo model in the coastal area of Beibu Gulf, Guangxi. The impact of ecological compensation policies on ecosystem service value (ESV) is systematically evaluated using the equivalent factor method. The results reveal that land use control and ecological compensation have an overall positive effect on ESV, and the combination of both is more advantageous. Among different ecological compensation models, TDR compensation can increase ESV to the greatest extent by approximately 2.79 × 109 Yuan. This study is beneficial to further enrich the theory and practice related to the study of TDR as an ecological compensation model and provide optimization suggestions for enriching the connotation of ecological compensation policies.

Rezoning a top-notch CBD: The choreography of land-use regulation and creative destruction in Manhattan’s East Midtown

This paper makes the case for the connection between making land-use regulatory changes and the process of destruction and redevelopment. Under the capitalist imperative, buildings that do not fulfil the full potential for profit are likely to be demolished (or refurbished) but demolition and new development are not shaped exclusively by the immutable laws of the market as they are mediated and facilitated by specific institutional contexts. Using the case of East Midtown rezoning in New York City, the paper examines the amendments of two land-use regulatory mechanisms: the enlargement of development rights (rezoning or upzoning) and the relaxation of the spatial limitations on the usage of existing unused rights (transferable development rights). While apparently unconnected, upzoning and transferable development rights are part of the regulatory framework that seeks to secure the ongoing generation of the highest-possible profits for private as well as public interests. By examining the choreography of rezoning and transferable development rights, the paper shows how the mechanics of creative destruction work while substantiating an existing body of knowledge on land use policies and practices in New York City. When used together, rezoning and transferable development rights are instrumental in remaking the built environment. Essentially, the rezoning of a 78-block area in East Midtown Manhattan unlocks captured and latent development rights that otherwise could not come about, and demonstrates the necessity of institutional arrangements to make creative destruction actually work.

Using transfer of development rights (TDR) in a legally ambiguous context: Istanbul case

This article explores the different ways in which local governments apply TDR in the absence (uncertainty) of a legal framework and its consequences, focusing on the case of Istanbul in Turkey. Municipalities have implemented mandatory and voluntary TDR through plan notes. For this, the council decisions of Istanbul Metropolitan Municipality are examined, and it is determined which district municipalities use TDR through the plan notes. Semi-structured interviews with a total of 15 actors determined by snowball sampling were used to understand the reasons behind such use. Besides, the use of TDR in Bahçelievler and Arnavutköy districts, one of which is the central district and the other is the periphery district with both widely using TDR, and also examples of districts implementing mandatory or voluntary TDR types by plan notes are examined. The used type of TDR is an alternative for the acquisition of social and technical infrastructure needs in the city, is more open to market influence, and has a voluntary basis.

Alternative gentrification: coexistence of traditional and new industries in historic districts through transfer of development rights in Dihua Street, Taiwan

ABSTRACT The transfer of development rights (TDR) has been widely used in the preservation of historic districts. The Dihua Street TDR (DS-TDR) in Taipei, Taiwan, successfully preserves the exteriors of historic buildings and traditional landscape in Dihua Street, without significant displacement of previous residents or increases in rents. This study describes this process as ‘alternative gentrification’, which facilitates the coexistence of traditional and new industries in historic districts, unlike typical gentrification in other cities. Although new shops gradually replace existing shops, the rent level remains relatively affordable compared with other shopping streets in the Taipei city centre. These aspects enable the coexistence of a clustering of new creative-industrial stores and existing stores within the buildings restored and landscaped by the DS-TDR.

Built Heritage Management Systems: Australia and Germany Compared

A recent, unreported, focus group of international heritage practitioners from academia, urban planning, land use management and urban design, found interesting similarities and differences between Australian and German cultural built heritage (CBH) management systems. For validation, a literature review provided a methodological framework and is reported in this paper. Its objective is to confirm the principal themes elicited by the initial work, being: assessment standards, transferable development rights, heritage conservation incentives and private property rights’ management thereby contributing enhanced clarity to the broader relationship between built heritage and stakeholder roles in heritage conservation. This paper is a precursor of more detailed planned empirical, in-country study seeking further insights into stakeholder interests and value systems based on a recent developed analytical approach known as Cultural Heritage Discourse (CHD). It is recognised that this empirical component is a limiting feature of the current research but anticipated as inevitable due to the preliminary stage of enquiry. Keywords: Conservation of built heritage; cultural heritage discourse; heritage management systems; transferable development rights; Germany and Australia

Integrating ecosystem services in transfer of development rights: a literature review

In recent years, transfer of development rights (TDR) programs have become widespread as a mechanism for implementing urban transformations and achieving planning goals. As market-based instruments, they facilitate land acquisition whilst avoiding compulsory purchases and minimizing public spending. By promoting urban transformation, TDR programs affect the provision of ecosystem services (ES) delivered by green and permeable areas. ES are essential for wellbeing, and the inclusion of ES in planning decisions promotes sustainable urban development. This research aims to provide a starting point for mainstreaming ES knowledge in TDR studies and application. Through a literature review, this paper aims to gain greater understanding as to what ways, and to what extent, ES have been considered so far in TDR studies and to identify if there is evidence that demonstrates how ES can be included in the design phases of TDR programs to improve their effectiveness in ensuring sustainable spatial transformations. The results show that the inclusion of ES can strengthen the ex-ante phase of TDR processes, supporting the development of the design features and paying greater attention to receiving areas identified during the process.

Challenges, Experience, and Prospects of Urban Renewal in High-Density Cities: A Review for Hong Kong

Redevelopment in Hong Kong must be accelerated in response to urban decay and land shortages. However, due to a lack of incentives and effective policy tools under Hong Kong’s floor area ratio regulations, there has been limited public–private partnerships in the urban renewal process, reducing both the public welfare and the efficiency of land use. We review the evolution of Hong Kong’s density schemes for addressing urban redevelopment issues to identify the most important barriers to private sector involvement. We also summarise the international experience and identify viable policies, compare cases in Hong Kong with successful transfer of development rights (TDRs) examples, point out TDRs’ shortcomings, and propose targeted policy optimisation strategies. On a practical level, this study has implications for the creation of targeted density policies to address Hong Kong’s ageing infrastructure and facilitate the urban transformation of Hong Kong and similar high-density cities so that they can continue to support sustainable urban growth.

Building up a compensation-oriented transferable development right mechanism: A theoretical and empirical exploration in Hubei, China

Regulated areas defined by planning are fundamental for land consumption constraints and environmental preservation, yet the restrictions on these areas' economic development and the resulting trends of regional economic imbalance are contested. Some countries, including China, have been exploring the possibility of adopting market-based solutions in the context of implementing authority-exerted planning regulations to compensate the regulated areas. To make it realizable, from the economic input–output perspective and taking the city as the research scale, this study builds up a compensation-oriented transferable development rights (CO-TDR) mechanism by investigating the compensation direction, quantity and value of the land development rights (LDRs) among cities based on the differences in their synthetic regulation intensity per capita (SRIC) of territorial space. In this study, an intuitive method to quantify the regional SRIC of territorial space is put forward, the restricted quantity, compensation direction and amounts of LDRs are revealed, and the implementation of the CO-TDR mechanism is proved to be economically feasible for local governments. As a promising tool, the CO-TDR extends the application of TDR in different countries and planning systems. It may be helpful for promoting coordinated development among regions and ultimately achieving the integrative goal of environmental improvement and social equity.

Promote or Demote? Investigating the Impacts of China's Transferable Development Rights Program on Farmers' Income: A Case Study from Chongqing.

China has been undergoing rapid urbanization and industrialization process since the adoption of economic reform and open-door policy in 1978, which is leading to tremendous urban growth and encroachment on rural farmland. To address the conflicts between urban development and farmland protection, the Chinese government introduced the transferable development rights (TDR) program named the Link Policy, and it was popularized nationwide given the tremendous land revenue from policy implementation. However, as farmers are the key stakeholders, the impacts of the policy on farmers' income need to be examined and justified. Thus, this paper aims to fill this gap by taking Chongqing as a case study. The synthetic control method was introduced to construct a synthetic Chongqing without the policy implementation using the 49 municipal cities and Chongqing during 2000-2017. Findings from the analysis indicate that Chongqing's TDR program significantly promoted farmers' income at the beginning of the policy implementation, while the positive impacts became weak afterward. Based on these findings, a few policy suggestions including a fair revenue distribution scheme and protection of farmers' land use rights are offered to facilitate the policy implementation and increase farmers' household income in the coming future.

Land Surveying and Squatting

Although its scale and social implications depend on the specific country or local situations, squatting is a global urban and rural phenomenon associated with such humanitarian issues as social justice, poverty and environmental impact, as well as economic issues, such as rent seeking by certain groups. It can be sporadic or massive. The state appears to deal with the former by implementing legal rules and the latter with social policies. With regard to the economic gains and costs of allowing squatting, it can be argued that squatter policies, which confer some entitlements on squatters, are akin to the doctrine of adverse possession in equity through recognising the benefits of long-term possession of land. Surveying and mapping as a key tool in the regulation of squatters in this context may or may not be carried out, contrary to common belief. This paper demonstrates, with documented real-world examples from Australia and China, that the state surveying of massive urban or rural squatting on government land is contingent on the benefits and costs of tolerating squatting. The discussion is related to the transfer of development rights (TDR) as a practicable inclusive policy in the context of a global drive towards land assembly for real estate development, which squatters often obstruct.

Market tools for the provision of urban green spaces in post-socialist Sofia

This study focuses on the provision of urban green spaces (UGS) as suppliers of ecosystem services (ES). Its main goal is to study how, in market-driven urban development with scarce resources, sufficient public UGS can be provided to meet the needs of the local community. The principal issue is that many ecosystem services cannot be provided solely through the market mechanism and therefore remain undersupplied. The contribution of the paper is that it uses institutional design (ID) in the field of urban planning to develop market-oriented tools for the provision of UGS. ID addresses three key issues: identifying the optimal scale of resource use and defining the circles of resource users and providers, proper assessment of resource values and the collection and transfer of payments for ES to those who provide land resources. The paper analyzes these issues in the context of post-socialist Sofia, Bulgaria’s capital. The post-socialist context is of particular interest because it is associated with two widespread difficulties – lack of funding for the development of UGS and lack of experience with the application of market-based and value-capture tools. In these conditions, the Municipality of Sofia has been unable to implement over 2000 ha of UGS set in the Master Plan 14 years ago. The paper provides directions for ID solutions for the implementation of UGS through the use of market-oriented tools such as impact fees, transferable development rights, concessions, FSR bonuses, and public-private partnerships.

A politically less contested and financially more calculable urban future: Density techniques and heightened land commodification in Taiwan

This article examines and makes explicit the co-constitutive relationship between density techniques, their depoliticization effects, and heightened land commodification in Taiwan's acceleration to a real estate–oriented economy. TDR (transfer of development rights) and density bonusing are two almost omnipresent practices in urban land development in Taiwan. We ask how their technocratic approach—using predetermined formulas to bracket density use while almost entirely foreclosing community negotiation—has played a formative role in accelerating land commodification. Using mixed research methods, the case study of Central North in New Taipei City helps lay bare how formulaic density rules enable planners to embed their epistemic assumptions about what constitutes a good city within intensified property development. Mimicking the calculative practices performed by the real estate sector, we use residual valuation methods to estimate the maximum price-lifting effects of 18 real estate development projects. We show that formulaic rules allow density to enter cost–benefit analysis spreadsheets as a profit booster in advance of actual granting of extra density, emboldening aggressive land brokering, buying, and selling, which churn up land prices. We argue that the technical depoliticization generated by TDR and density bonusing has become the most effective catalyst in creating a politically less contested and financially more calculable urban world in which capital's acquisitive appetite for land's monetary value is intensified. We conclude by discussing the implications for how to move density from a domain of technical rules and real estate finance to a politics of land.

Perception and prevention of groundwater collapse in agricultural communities of similar socioeconomic profile: Synthesizing the case of Santa Isabel, Puerto Rico and Magdalena, New México

Agriculture exemplifies human dependence on water and lack of adequate management. Puerto Rico is no exception. Although the agricultural sector is expanding to address food security, little consideration exists of how water scarcity impacts future production. We studied how high-producing fruit and vegetable regions of the territory could mitigate the effects of diminished water supply. Interviews with farmers who irrigate in Santa Isabel, PR did not reveal proficiency about water reserves or measures for conservation. To explore whether the same social behavior toward water exists in a community of similar socioeconomic profile, the author also conducted interviews in Magdalena, New Mexico, where wells ran dry for irrigation and domestic use in 2013. In both settings, the dynamic described in “The Tragedy of the Commons” seems to best explain water depletion. Strategies for conservation include transfer of development rights and substitution of groundwater with surface water. Planning at the local level seems imperative.

A centennial literature review (1919–2019) of research publications on land readjustment from a neo-institutional economic perspective

Informed by Coasian transaction cost reasoning from a neo-institutional economic perspective, this literature review identifies and examines 225 available research works involving 188 sets of author entries spanning from 1919 to 2019. All are on or connected with land readjustment, with a focus on lot boundaries as rigidly delineated. Over the years researchers and practitioners have considered and reconsidered land readjustment under various names in different forms (whether consensual or non-consensual among land owners affected) but almost invariably involving replotting of proprietary boundaries and reallocation of rights to realigned lots in a new layout as an alternative to state taking of land (eminent domain) or developer purchase of all properties. This literature review, connected with the adoption of a policy proposal, is unique in three ways as far as land readjustment is concerned. First, it has a time span of just over a century from 1919 to 2019 and traces works on Japan from the 1920s. Second, it cross-references the works reviewed. Third, it has a theoretical interest in property rights with a specific focus on boundaries as a dimension of those rights, and articulates land readjustment as a subset of the transfer of development rights. Fourth, it employs ‘culturomics’ (Michel et al. 2011, Roth 2014) in fathoming the context of the concept land readjustment and associated terms.