How is the value of a TDR credit determined?
The cost of a TDR credit is determined by how TDR credits are allocated in the sending area, what those credits allow a purchaser to do in a receiving zone, and the number of opportunities for credit use. The price someone will be willing to pay for a credit will depend upon the demand for increased density in the receiving area and the number of available credits from the sending area. Initially a municipality may choose to set minimum credit value but ultimately a functional TDR program will have credit costs that reflect their value in the open market.
