Can the market be used to preserve land? the case for transfer of development rights

Abstract

This paper discusses the use of a market-driven technique – transfer of development rights (TDR) – to preserve land from development while guaranteeing the rights of property owners. While the technique is often used in the United States, Europe has a lot more urgency in land preservation but it is still lagging in the use of market based instruments such as the transfer of development rights. This paper explores the economic arguments favoring the use of TDR programs, discusses the difficulties in implementing these programs in Europe, where command-and-control regulation has been preferred in land preservation to market-based solutions, and presents tentative hypotheses to explain the adoption of TDR programs in local communities. Preliminary data collected for TDR programs in Florida supports some of the arguments presented and encourages researchers to extend this empirical analysis to European countries.