Components of TDR

Zoning Amendments

TDR is anchored in zoning legislation and the establishment of TDR in a municipality follows the same process as any zoning change. The sending and receiving districts must be designated and mapped with specificity (just like any other type of zoning district). They may overlap with existing zoning districts or they may be newly defined districts. Establishing zoning overlay districts is a very common approach for sending and receiving areas. They need not be coterminous with zoning districts.

Sending Districts

Sending districts are the areas from which development rights may be transferred. Often, the zoning regulations applicable to the sending districts will be amended to reduce or eliminate further development. In some cases, however, there may be no need to change the zoning regulation in the sending district. In this case, the municipality would rely upon the market value of development rights in the receiving district to induce transfer of development from the sending district. The sending district should consist of natural, scenic, recreational, agricultural or open land, or sites of special historical, cultural, aesthetic or economic values sought to be protected.

Receiving Districts

The receiving district is defined to mean one or more designated areas of land to which development rights generated from sending districts may be transferred, and in which increased development is permitted to occur by reason of the transfer. Development in the receiving districts would thus occur at a greater density than otherwise allowed by zoning, with the increase attributable to the development rights which were transferred from the sending districts. Great care must be taken with the receiving district designation for two reasons. First, there should be a market for development rights in the receiving district to entice property owners to utilize the TDR program. Second, the transfer will necessarily result in an increase in the density or intensity of development in the receiving area, which means that municipal services must be available to support it; consequently, there must be an awareness of the potential impact of such development.

Transfer Formula

The transfer formula quantifies how development units in the Sending District are realized in the Receiving District. If the transfer occurs from a low-density area to a higher-density area, there may be a need to establish a transfer formula that equates the development right from one single-family home to more than one multi-family unit. This is justified by the fact that the infrastructure impacts of a multi-family unit are lower than for a single-family dwelling in a low-density area.