Transfer of Development Rights


A Transfer of Development Rights (TDR) authorizes a landowner to remove their right to develop all or a portion of a parcel of land, and to transfer that right to develop to another parcel of land which could then be developed more intensively than otherwise possible under the zoning standards. Typically enacted as a provision in municipal zoning bylaws, TDRs are a tool for achieving both a community’s land conservation and compact or infill development goals.


Transfer of development rights (TDR) is a voluntary, incentive-based tool that allows the transfer of growth from places where a community would like to see less development (called sending areas) to places where a community would like to see more development (called receiving areas). Sending areas are typically environmentally-sensitive properties, agricultural land, historic landmarks or any other places of value to the community. The receiving areas are typically places that are appropriate for higher densities of development, such as designated growth centers, prime locations for infill development, or compact housing developments.

MI Dept. of Env. Quality

While the seller of development rights still owns the sending area land and can continue using it, a conservation easement is placed on the property that prevents further development. Developers buy the development rights to increase the density of projects in receiving areas because a larger project is more profitable than the smaller projects that would otherwise be allowed without the additional density. From a smart growth standpoint, TDRs can serve to protect the working landscape outside of community centers, while simultaneously supporting compact development within those centers.

Vermont’s planning statutes (§4423) not only authorize the use of TDRs, but set forth the elements that must be included in the program as well as the administrative requirements for overseeing the transfer. The success of a TDR program is based on several factors, including market conditions, the development capacity within the receiving area, and the willingness of landowners to relinquish future development potential within sending areas. To date, they have not been widely used in Vermont, although several communities have adopted programs that resulted in development rights transfers.

Related Issues

Related Case Studies


Vermont Land Use Planning Implementation Manual: Transfer of Development Rights. This provides more detailed information on transfer of development rights.

Vermont Planning Statutes. This link provides the legal framework for transfer of development rights as referenced in Vermont Planning Statutes.