In cities around the world, there is a mechanism called Transferable Development Right (TDR), which is somewhat similar to densification in Tehran, but has major differences. TDR is a process that is considered a tool to control urban sprawl by centralizing development. <\/p> \n \n
What is TDR and how is it different from density sales? Simply put, the TDR mechanism is a \u201cCap and Trade\u201d mechanism. The city sets density caps for different areas and ensures that the total amount of density in an area does not exceed a certain limit. But within the area, individual building owners can sell their density rights to developers within the area.
In many countries, this mechanism is used to protect agricultural land or historic structures. The municipality may want to keep the structure of some areas intact due to cultural and historical considerations. For example, areas with famous historical and cultural monuments that have an active urban life and need to be preserved. <\/p> \n \n
In this case, based on the agreement between the municipality and the owners of that specific historical area, the density of buildings in this area will be transferable to developers in other areas of the city. In this way, owners of agricultural land or historical and cultural structures, having the right to transfer the development of their land, will have a greater incentive to preserve the existing structure of their land and, with the support of legal mechanisms, will be able to
The difference between this mechanism and density sales is that in this method, the municipality does not have the right to allow developers to build more than the specified density in any given zone. Rather, it only allows density to move fluidly between buildings in the designated zone, without changing the overall density of the area. <\/p> \n \n
In this way, the municipality can generate revenue from a tax on the purchase and sale of density. In addition, the idea of \u200b\u200ban annual tax on unallocated density is also considered. Density and land are also two substitute assets. You can settle more people on the surface (more land) or on the height (air). So air and land act similarly in terms of the housing production function.