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Markets for Development Rights: Lessons Learned from Three Decades of a TDR Program

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  • Walls, Margaret

    (Resources for the Future)

Abstract

Transferable development rights (TDRs) are a market-based approach to land conservation. They allow the development rights from one property to be transferred to another, with the first “sending” property placed under a development restriction or conservation easement and the “receiving” property permitted more dense development than would otherwise be allowed by baseline zoning regulations. This paper summarizes the economics literature on TDRs and describes a long-running program in a county in Maryland, one of the few programs with an active TDR market. It updates previously published results from the program and describes some problems that have arisen in recent years as the program has matured. The paper offers some observations as to why these problems have occurred and suggestions for other communities considering TDR programs.

Suggested Citation

  • Walls, Margaret, 2012. "Markets for Development Rights: Lessons Learned from Three Decades of a TDR Program," RFF Working Paper Series dp-12-49, Resources for the Future.
    • Handle: RePEc:rff:dpaper:dp-12-49
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    File URL: http://www.rff.org/RFF/documents/RFF-DP-12-49.pdf
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    References listed on IDEAS

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    1. Paul Thorsnes & Gerald P. W. Simons, 1999. "Letting The Market Preserve Land: The Case For A Market‐Driven Transfer Of Development Rights Program," Contemporary Economic Policy, Western Economic Association International, vol. 17(2), pages 256-266, April.
    2. Rolleston, Barbara Sherman, 1987. "Determinants of restrictive suburban zoning: An empirical analysis," Journal of Urban Economics, Elsevier, vol. 21(1), pages 1-21, January.
    3. Glaeser, Edward L. & Kahn, Matthew E., 2004. "Sprawl and urban growth," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 56, pages 2481-2527, Elsevier.
    4. Magliocca, Nicholas & McConnell, Virginia & Walls, Margaret & Safirova, Elena, 2012. "Zoning on the urban fringe: Results from a new approach to modeling land and housing markets," Regional Science and Urban Economics, Elsevier, vol. 42(1-2), pages 198-210.
    5. Quigley, John M. & Rosenthal, Larry A., 2005. "The Effects of Land-Use Regulation on the Price of Housing: What Do We Know? What Can We Learn?," Berkeley Program on Housing and Urban Policy, Working Paper Series qt90m9g90w, Berkeley Program on Housing and Urban Policy.
    6. Ellerman,A. Denny & Joskow,Paul L. & Schmalensee,Richard & Montero,Juan-Pablo & Bailey,Elizabeth M., 2005. "Markets for Clean Air," Cambridge Books, Cambridge University Press, number 9780521023894.
      • Ellerman,A. Denny & Joskow,Paul L. & Schmalensee,Richard & Montero,Juan-Pablo & Bailey,Elizabeth M., 2000. "Markets for Clean Air," Cambridge Books, Cambridge University Press, number 9780521660839.
    7. B E Carpenter & D R Heffley, 1981. "A Spatial Equilibrium Analysis of Flexible Zoning and the Demand for Development Rights," Environment and Planning A, , vol. 13(3), pages 273-284, March.
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    13. Elizabeth Kopits & Virginia McConnell & Margaret Walls, 2008. "Making Markets for Development Rights Work: What Determines Demand?," Land Economics, University of Wisconsin Press, vol. 84(1), pages 1-16.
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    More about this item

    Keywords

    TDRs; zoning; sprawl; farmland preservation; easements;
    All these keywords.

    JEL classification:

    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns

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