What is Transfer of Development Right (TDR)?

TDR is a virtual space that is given by the government to a land owner when his/her plot is reserved for public use, such as road, school, playground, hospital, etc. In exchange for giving up that land, the land owner gets virtual space (TDR) that is equivalent to the reserved area. TDR is tradable, and can be sold to builders, who can use it to add more floors on their projects.

The Proposal and its Impact

According to the proposed TDR usage laws, developers will not be allowed to use TDR in projects that are next to a road narrower than 9 meters.

Currently, the developers are allowed to use one TDR irrespective of the width of the roads; however, the government’s draft circular related to new rules said “Now, higher the width of the road, more the TDR to be used by the developers along with the available floor space index (FSI) of 1 for his project. If the road width is between 12m to 18m, then 0.75 TDR will be used. For the road width between 18m to 24m, one TDR will be uploaded. For road width between 24m-to-30m, 1.25 TDR can be uploaded. If the road width is more than 30m, the developer can use 1.50 TDR.”

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. 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 stands to gain, 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 it 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 streamlined 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. The TDR program allows 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.

What is Transfer of Development Right (TDR)?

TDR is a virtual space that is given by the government to a land owner when his/her plot is reserved for public use, such as road, school, playground, hospital, etc. In exchange for giving up that land, the land owner gets virtual space (TDR) that is equivalent to the reserved area. TDR is tradable, and can be sold to builders, who can use it to add more floors on their projects.

The Proposal and its Impact

According to the proposed TDR usage laws, developers will not be allowed to use TDR in projects that are next to a road narrower than 9 meters.

Currently, the developers are allowed to use one TDR irrespective of the width of the roads; however, the government’s draft circular related to new rules said “Now, higher the width of the road, more the TDR to be used by the developers along with the available floor space index (FSI) of 1 for his project. If the road width is between 12m to 18m, then 0.75 TDR will be used. For the road width between 18m to 24m, one TDR will be uploaded. For road width between 24m-to-30m, 1.25 TDR can be uploaded. If the road width is more than 30m, the developer can use 1.50 TDR.”

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. 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 stands to gain, 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 it 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 streamlined 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. The TDR program allows 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.