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Making Markets for Development Rights Work: What Determines Demand?

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  • Elizabeth Kopits
  • Virginia McConnell
  • Margaret Walls

Abstract

This paper estimates developers’ demand for Transferable Development Rights (TDRs) in one of the few long-standing active TDR programs in the country, Calvert County, Maryland. We find that baseline zoning is a critical determinant of TDR use—demand is lower in the relatively high-density residential areas than in the low-density rural areas. Changes in baseline density limits have a larger effect on TDR use in rural areas than in residential and town center areas. We identify subdivision characteristics that are significant in explaining TDR use and discuss implications for other jurisdictions considering revisions to, or adoption of, TDR programs.

Suggested Citation

  • Elizabeth Kopits & Virginia McConnell & Margaret Walls, 2008. "Making Markets for Development Rights Work: What Determines Demand?," Land Economics, University of Wisconsin Press, vol. 84(1), pages 1-16.
    • Handle: RePEc:uwp:landec:v:84:y:2008:i:1:p:1-16
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    6. Rolleston, Barbara Sherman, 1987. "Determinants of restrictive suburban zoning: An empirical analysis," Journal of Urban Economics, Elsevier, vol. 21(1), pages 1-21, January.
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    12. Carpenter, Bruce E. & Heffley, Dennis R., 1982. "Spatial-equilibrium analysis of transferable development rights," Journal of Urban Economics, Elsevier, vol. 12(2), pages 238-261, September.
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    14. McConnell, Virginia & Walls, Margaret & Kopits, Elizabeth, 2006. "Zoning, TDRs and the density of development," Journal of Urban Economics, Elsevier, vol. 59(3), pages 440-457, May.
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    Citations

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    Cited by:

    1. Proeger, Till & Meub, Lukas & Bizer, Kilian, 2016. "The role of communication on an experimental market for tradable development rights," University of Göttingen Working Papers in Economics 271, University of Goettingen, Department of Economics.
    2. Till Proeger & Lukas Meub & Kilian Bizer, 2018. "Laboratory Experiments of Tradable Development Rights: A Synthesis of Different Treatments," Sustainability, MDPI, vol. 10(6), pages 1-19, June.
    3. Walls, Margaret, 2012. "Markets for Development Rights: Lessons Learned from Three Decades of a TDR Program," RFF Working Paper Series dp-12-49, Resources for the Future.
    4. McConnell, Virginia D. & Kopits, Elizabeth & Walls, Margaret, 2005. "Farmland Preservation and Residential Density: Can Development Rights Markets Affect Land Use?," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 34(2), pages 1-14, October.
    5. Tan, Rong & Wang, Rongyu & Heerink, Nico, 2020. "Liberalizing rural-to-urban construction land transfers in China: Distribution effects," China Economic Review, Elsevier, vol. 60(C).
    6. Chen, Chun & Yu, Li & Choguill, Charles L., 2020. "“Dipiao”, Chinese approach to transfer of land development rights: The experiences of Chongqing," Land Use Policy, Elsevier, vol. 99(C).
    7. Nie, Xin & Li, Xiaojuan & Lyu, Chengyu & Su, Yanglan & Wang, Han, 2024. "Can ecological compensation based on the transfer of development rights (TDR) improve ecosystem service value? A multi-scenario simulation," Land Use Policy, Elsevier, vol. 138(C).
    8. Ferreira, António, 2020. "Reconsidering the merit of market-oriented planning innovations: Critical insights on Transferable Development Rights from Coimbra, Portugal," Land Use Policy, Elsevier, vol. 99(C).
    9. Proeger, Till & Meub, Lukas & Bizer, Kilian, 2017. "The role of communication on an experimental market for tradable development rights," Land Use Policy, Elsevier, vol. 68(C), pages 614-624.
    10. Yidi Wang & Ying Fan & Zan Yang, 2022. "Challenges, Experience, and Prospects of Urban Renewal in High-Density Cities: A Review for Hong Kong," Land, MDPI, vol. 11(12), pages 1-20, December.
    11. He Zhu & Xing Gao & Ying Lin & Yijing He, 2022. "Land-Development-Right Pricing Based on Spatial Characteristics in Urban Local Function Regeneration," Land, MDPI, vol. 11(12), pages 1-25, November.
    12. Kopits, Elizabeth & McConnell, Virginia & Miles, Daniel, 2009. "Lot Size, Zoning, and Household Preferences: Impediments to Smart Growth?," RFF Working Paper Series dp-09-15, Resources for the Future.

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    More about this item

    JEL classification:

    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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