Does the Sale of a TDR Certificate Compensate Landowners for the Full Market Value of the Loss of the Development Right?
No. The price that will be paid for a TDR certificate has no relationship to the cost of land or market value of the loss of the development right. A TDR certificate is issued regardless of the cost of land, cost of development, the market value of the development right, or the intent of the owner to actually develop the property. The price paid for the certificate is based on the number of certificates on the market, and the price purchasers are willing to pay. This leads to great inequities as the same number of certificates is issued to the person who would incur $10,000 to install roads and utilities as it would to a person who would have to incur $1,000.
Related Questions
- Is there a way for the TDR seller to participate more fully in the financial future of the potential development of the development right being sold?
- Does the Sale of a TDR Certificate Compensate Landowners for the Full Market Value of the Loss of the Development Right?
- Why do short sale properties typically sell for below market value?
