Transferable Development Rights

What are Transferable Development Rights (TDRs)?

Transferable Development Rights (TDR) refers to a legal process whereby land development rights may be transferred from one property to another.  TDR ordinances allow properties to be developed in more productive ways, provide a source of income to property owners who do not (or cannot) develop their properties, and are a useful planning tool to preserve agricultural lands and open space.
The TDR concept treats development rights as a sort of property resource that can be separated from real property, roughly analogous to such property interests as mineral rights, which can be sold separately from the land itself.  As provided in a TDR ordinance, a landowner may transfer unused development rights to another property that could benefit from the rights.

How is the TDR Process Created?

Local governments may enact a TDR ordinance, which designates “sending” and “receiving” zones, and determines what development rights may be transferred.  (See Utah Code §§ 10-9a-509.7 and  17-27a-509.7).

May Any Development Rights Be Transferred?

The Utah Code does not specify any particular development rights, so in theory any rights could be transferred.  The development rights that may be transferred between properties are determined by local ordinance.
A “sending” zone is an area from which development rights may be “sent,” or transferred.  The “receiving” zone is the area into which the rights are sent. For example, a property in a receiving zone may have a density of five units per acre.  If a density of ten units per acre is desired, the developer may purchase an additional five units per acre from a property in a sending zone.  The local government facilitates the transfer and tracks the allocation of the development rights.

Is There a Limit to the Rights That May be Transferred?

Transferrable rights are limited by the local ordinance creating the TDR process.  The Utah Code places no limits on the rights that may be transferred.