what is tdr in real estate

A Transfer of Development Rights (TDR) program is a zoning technique used to permanently protect land with conservation value by redirecting development that would otherwise occur on this land to an area planned to accommodate growth and development. TDR programs financially compensate landowners for choosing not to develop some or all of their land. The TDR process can be considered a tool for controlling urban sprawl by concentrating development. TDRs have been mentioned by the U.S. Supreme Court when looking at constitutional issues of just compensation for the taking of property. TDR programs are voluntary programs that allow the owner of one property (the “sending site”) to transfer its development rights to another property (the “receiving site”) . In the place where development is encouraged under TDR, zoning is changed to permit more units to be built. This generates the opportunity to earn more money from development than landowners would have received in the absence of the TDR program. TDR is based on the concept that with land ownership comes the right of use of land, or land development. These land-based development rights can in some jurisdictions be used, unused, sold, or otherwise transferred by the owner of a parcel.