One method of preserving open space while increasing density in designated areas is through Transfer of Development Rights (TDR).  As the name implies, TDR involves shifting the development rights from one property to another piece of property in a designated area.  The result is a (usually neutral) increase in the allowable density of development in the receiving area and a reduction of density in the sending area.

TDR distributes the burden of land use regulations more evenly than straight zoning or legislation.  Landowners in the sending area share in the financial gains of development by selling their development rights to willing buyers. In this way, the benefit in the receiving area can be distributed among all affected landowners, including those in the sending area.  TDR has the advantage of allowing the market to generate individual transactions while serving the overall policy goal of shifting and concentrating development.

TDR programs generally operate under one of two models: 1) the municipality administers the program and sellers and buyers deal with each other directly; or 2) a development credit bank administers the program and buys and sells credits. The credit bank can be run by the municipality, a regional entity, the state, or a nonprofit organization.

TDR is fairly complex to operate because it requires a large amount of oversight. Even if a credit bank is involved, the local government must still make many administrative decisions, such as defining sending and receiving areas, tracking transfers and development, and defining the process for taxation and other legal issues.  A regional TDR Bank managed by MAPC, or a statewide bank managed by the Massachusetts Association of Regional Planning Agencies (MARPA), would reduce the administrative burden on individual municipalities and would streamline the process of buying and selling rights.

The Commonwealth should encourage Transfer of Development Rights (TDR) through legislation to promote TDR and funding to support technical assistance and establishment of TDR “banks.”  MAPC should initially concentrate on establishing working TDR programs within as many communities as possible, and then work on inter-municipal transfer of development rights.

9.a    MAPC should develop a pilot program with individual municipalities to establish formal Transfer of Development Rights programs

9.b    MAPC should collaborate with state environmental and housing agencies to develop a framework for regional Transfer of Development rights

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