TDR (Transfer of Development Rights) Calculation refers to the process of determining how much development potential (usually in the form of density, square footage, or building height) can be transferred from a sending site (the land to be preserved) to a receiving site (the land where additional development is allowed).
TDR calculations typically depend on a set of factors defined by local zoning regulations, development codes, or policies. The goal of the calculation is to fairly determine the development rights to be transferred while maintaining the balance between preservation and development.
Here’s how the TDR calculation process works:
1. Determine the Development Rights of the Sending Site
The first step is to calculate how much development can legally occur on the sending site (the site to be preserved or restricted). This can be done by considering:
- Zoning regulations: What are the current zoning regulations on the sending site? This could include density, floor area ratio (FAR), or height limits.
- Existing conditions: What is the existing development on the site? If it’s already developed, how much unused development potential remains?
Example:
- If a sending site is zoned for 5 units per acre, and the site is 10 acres in size, the total development rights could be 50 units.
2. Assign the Development Rights to TDR Units
The development rights from the sending site are often converted into TDR units (a transferable unit of development). A TDR unit might represent a specific measure of development, such as:
- A certain number of residential units (e.g., one TDR unit = 1 housing unit).
- A certain amount of commercial space (e.g., one TDR unit = 1,000 square feet of commercial space).
- Floor Area Ratio (FAR) or height allowance increase.
For example:
- If the sending site allows for 50 units but only 30 are built, the remaining 20 units might be available for transfer.
3. Identify the Receiving Site’s Development Capacity
The receiving site is the property where the development rights will be transferred. Here, you calculate how much additional development the receiving site can handle, based on its existing zoning, infrastructure capacity, and allowable development.
- If the receiving site is zoned to allow for a higher density, the number of TDR units transferred could increase the development allowed.
- Example:
- If the receiving site is zoned for 10 units per acre, but after receiving TDR units, it can be developed at 15 units per acre, you calculate how many units can be built on that land based on the TDRs.
4. Calculate the TDR Transfer
To calculate how many TDR units need to be transferred, use the formula:
TDRs Needed=Desired Development (Receiving Site)−Current Development CapacityDevelopment Rights per Unit\text{TDRs Needed} = \frac{\text{Desired Development (Receiving Site)} – \text{Current Development Capacity}}{\text{Development Rights per Unit}}
Example:
- Sending Site: Zoned for 5 units per acre, 10 acres = 50 potential units.
- Receiving Site: Zoned for 10 units per acre, 5 acres = 50 units.
If the receiving site wants to increase development to 80 units (an additional 30 units), the developer might need to buy TDRs equivalent to those additional 30 units.
5. Establish the Exchange Rate
The exchange rate is the ratio at which development rights are transferred from sending to receiving sites. This is often determined by local regulations and can vary based on factors such as the relative value of land in both sending and receiving areas.
Example: If 1 TDR unit equals 1 unit of development, the developer would need to transfer 30 TDR units for the additional 30 units of housing on the receiving site.
6. Adjust for Other Factors (If Applicable)
Depending on the specific TDR program, other factors might influence the TDR calculation, such as:
- Geographic location: Sending sites closer to protected areas (e.g., wetlands) might be more valuable and require fewer TDR units to preserve.
- Time and market conditions: TDR prices and availability might fluctuate over time based on demand for development rights and market conditions.
- Bonuses for preservation: Sometimes, receiving sites can receive additional bonuses (e.g., density bonuses) for accepting TDRs or for preserving particularly valuable resources (e.g., historic buildings).
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