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Guidelines For Transfer of Development Rights

Comments(2) Sub Category:Civic and Governance,Real Estate Trend Posted On: Aug 06, 2010

Transfer of Development Rights (TDR) programs can be easier to implement than typical zoning programs. The idea of transferring development rights between properties was first introduced in New York City with the passage of that first American zoning ordinance in 1916. Many other countries have since then adopted this system to plan urban development. TDR is generated on plots reserved for public amenities like roads, playgrounds, gardens, schools, markets etc. TDR can be an effective tool to simultaneously limit development in valuable open space areas while stimulating additional development in areas well suited to higher densities. TDR is granted only for prospective development and not for past developments.

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What is TDR?

Transfer of Development Rights (TDR) is a market-based mechanism that promotes responsible growth, while conserving areas such as working forest, prime agricultural areas and environmentally sensitive lands. A Transfer of Development Rights (TDR) is a certificate from the Municipal Corporation that the owner of a property gets where his/her property (either part or whole) is reserved for the purpose of public utilities such as road, garden, school etc.

Transfer of Development Rights (TDR) means making available certain amount of additional built up area in lieu of the area relinquished or surrendered by the owner of the land, so that he can use extra built up area either himself or transfer it to another in need of the extra built up area for an agreed sum of money. It is designed to steer growth not to limit or stop development.

Benefits of TDR program

The TDR program allows the landowners to separate the right of ownership of the land from the right of its development. A farmer can continue to farm his land, while giving up his developmental rights to a property developer as TDR for a consideration. Landowners benefit by being compensated for placing land use restrictions on their land, keeping farmland prices affordable for agricultural uses, and removing land uses that impede farming.

Local Governments can use TDR to direct development in specific zones. They can use this tool to preserve farming areas, forested areas, heritage areas etc. by allowing its owners to give up their rights to develop these spaces commercially in lieu of TDR. The public benefits as private sector funds are used to purchase the development rights, thus avoiding large public expenditures, farmland and environmentally sensitive areas are protected, and development occurs in suitable areas, resulting in more efficient public services.

Development Rights Certificate

A Development Rights Certificate (DRC) is a certificate issued by the Municipal Commissioner to individuals who are granted TDR. The certificate states that the FSI credit in square meter of the built-up area to which the owner or lessee of the reserved plot is entitled, the place and user zone in which the development rights are earned, and the areas in which they may be utilized. The property owner may use DRC for himself or transfer to any other person.

How TDR can be a positive initiative?

  • Compensation to land owners to give their developmental rights should be market price based and not based on archaic and imaginary government registration prices.
  • The program must be equitable to all parts of a City to ensure that uneven development does not happen.
  • TDR programs must be implemented synchronously with sound urban planning and zoning regulations, with stream lined land title registration, with right pricing for TDR, with an efficient trading mechanism for TDR and good communication.
  • The local Government cannot arbitrarily decide on TDR pricing based on end use. The process of TDR issuance and purchases should not be bureaucratic.
  • There ought to a well-planned communication to make people understand and buy into TDR programs. Private Banks and exchanges must be involved to drive the TDR program.
  • The fundamental principle of TDR is that the owner continues to own the land. But what Bangalore city did was misuse of this tool to take away the fundamental right of a citizen to hold on to his property. This must be stopped. TDR is not the only tool that is being used this way. Other acquisition tools such as ‘eminent use’ principles are also employed as legal instruments to rob people of their fundamental rights. This must be stopped.

According to the current law, properties can be acquired for road-widening only under TDR and TDR can be enforced only if the owner is willing. If he isn’t willing, the only option open to local government is to acquire the property under the state’s Land Acquisition Act. For instance, if a property owner in Bangalore is not willing, the only option open to BBMP is to acquire the property under the Karnataka Land Acquisition Act. The process of acquisition of properties under the Karnataka Land Acquisition Act is very expensive, tedious and time-consuming. The TDR program allows the landowners to separate the right of ownership of the land from the right of its development. TDR is granted only for prospective development and not for past developments. It is designed to steer growth not to limit or stop development.

Disclaimer: The article  contains data collected from various sources and the use of same is at readers discretion.

 

2 Responses to “Guidelines For Transfer of Development Rights”

  1. Ashok says:

    If I purchase tdr cirtificate for my land after that if I want to transfer on another land it is possible

  2. listas barcelona says:

    Fantastic post, very informative. Good job.

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