Transferable Development Rights (TDRs) were supposed to be a solution to the intractable problems of land use, a bit of institutional design magic that married the interests of development and preservation at no cost to taxpayers and with no legal risk. Under a TDR program, development is limited or barred on properties targeted for preservation or other regulatory goals, but owners of those lots are allowed to sell their unused development rights to other property owners. In theory, this allows the same amount of development to occur while preserving favored uses without tax subsidies or constitutional challenges. Reviewing their use over the past fifty years, this Article shows that the traditional justifications for TDRs do not work. In practice, TDRs are not necessary to avoid takings litigation, are not costless to taxpayers, and do not balance the interests of preservation and development. Instead, they serve as yet another growth control in metropolitan areas where such controls have caused housing crises and major harms to the national economy. Assessed as a technocratic tool for solving problems in land use, TDRs are a failure.
But this Article shows that there is a case for TDRs not as a technocratic but rather as a political tool …
Roderick M Hills, Jr and David Schleicher, Building Coalitions Out of Thin Air: Transferable Development Rights and ‘Constituency Effects’ in Land Use Law, Journal of Legal Analysis, volume 12, 2020, pages 79–135, https://doi.org/10.1093/jla/laz008.