Transfer of Development Rights (TDR), also commonly referred to as Transfer of Development Credits (TDC), is a mechanism that is used to encourage high-density development on lands that are less susceptible to the impacts of built infrastructure within a defined region, while limiting development on ecologically sensitive lands. This is known as density transfer. Density transfer is generally a voluntary market-based concept that could be used to protect coastal resources.1 Density transfer is appropriate where development potential is measurable and can be typically applied to residential uses.2

How it works

Types of development transfers

  • Zoning lot mergers involve two or more lots adjacent to each other that can be grouped as one lot for the purpose of zoning. This practice is commonly referred to as “as of right” that is, city approval is not a requirement, providing that landowners adhere to prescribed procedural guidelines.
  • Landmark transfers involve the designation of a building as a landmark. This prohibits any vertical additions or substantial architectural changes to the building. Landmark transfer rights can be sold to adjacent lots as well as lots across an intersection.
  • Special purpose district transfers involve the preservation of an area because of its unique characteristics. In special purpose districts, development rights that are unused may be transferred to adjacent buildings as well as any property within a designated zone. 12


  • Provides significant protection of open space, farmland, and environmentally sensitive areas.
  • Promotes private financing of land protection rather than public financing.
  • Ties private land conservation to growth management, downtown revitalization, and infrastructure efficiency by directing growth to appropriate areas.
  • Provides incentives that encourage growth in receiving areas and disincentives for the development of sending areas.


  • It is possible that there are not enough credits, and/or the credits are too restrictive, as they often can only be used in the jurisdiction in which they were created.
  • TDRs are technically complicated and require a significant investment of time and staff resources to administer, especially during the development stages of a program.
  • Requires an extensive public education campaign that may not appropriately balance benefits to cost.
  • Depends upon a properly functioning real estate market, which if depressed, will cause few rights to be sold. 11

Example projects

King County’s TDR Program

Kings County WA, USA

A transfer of development rights (TDR) program was adopted by King County in 2001 to preserve important resources such as environmentally sensitive areas, wildlife habitat, open space, and shoreline access.6 The program was initially designed to reduce urban sprawl by designating ‘urban separators in between the urbanized west and the rural/forested east.7 The sending areas were typically low-density urban separator areas, agricultural land, rural areas, and forest production districts while receiving areas were typically urban areas with some limitations for use.8 As of 2007, the program preserved more than 90,000 acres of land through the 48 private market transactions of 455 TDR’s.9

Jersey TDR


In 2010, New Jersey put together a 40-member Transfer of Development Rights Task Force which produced a report recommending changes to facilitate the use of transfer of development rights (TDR), clustering, and non-contiguous clustering.3 The development of TDR tools allow New Jersey Municipalities such as Chesterfield, Lumberton, Burlington, and Pinelands regions to have access to planning tools that help to preserve and protect environmentally sensitive land without relying on public funding.4 In the report of the TDR Task Force, TDR is defined as the process in which the landowners of the ‘sending areas’ sell their development rights to developers of the ‘receiving site’ with the intent of preserving and protecting the ‘sending site’ and for accommodating higher building density in the ‘receiving site’.5


  1. 1.

    The Arlington Group Planning Architecture Inc., et al. Sea Level Rise Adaptation Primer. pp. 51.

  2. 2.

    Ibid, 52.

  3. 3.

    “Transfer of Development Rights and Clustering.” New Jersey Future,

  4. 4.


  5. 5.


  6. 6.

    Walls, Margaret, and Virginia McConnell. Transfer of Development Rights in U.S. Communities. Sept. 2007, pp. 118.

  7. 7.

    Ibid, 118.

  8. 8.

    Ibid, 119.

  9. 9.

    Ibid, 121.

  10. 10.

    Center for Land use(2005). Planning Implementation Tools Transfer of Development Rights (TDR)

  11. 11.

    Anonymous. (n.d). Environmental Tools: Transfer of Development Rights (TDR)

  12. 12.

    Green Light Expediting. (n.d). The three types of Development Rights Transfer

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