Navigating the Takings Maze: The Use of Transfers of Development Rights in Defending Regulations Against Takings Challenges

Land use regulation, at whatever scale, typically generates passionate opposition from landowners whose private property has lost value, and their negative reactions often take the form of regulatory takings challenges based on the Fifth and Fourteenth Amendments. In anticipatory response, many communities have instituted Transfer of Development Rights (“TDR”) programs to assist in defending their land use regulations against such takings challenges.TDRs allow regulated landowners to sell blocks of their development rights, unusable on the regulated sites under the terms of the challenged regulations, to purchasers who can use them to expand allowable development rights on designated off-site receiving parcels. The sale of TDRs can thus generate significant revenues for regulated property owners because purchasers are often willing to pay large sums for the right to use the *220 TDR credits to build at much greater intensity than otherwise allowed under existing land use regulations