Transfer of Development Rights
Just as with other commodity markets like food and oil, the Transfer of Developments or "TDR" market, is driven by supply and demand. Landowners of sending sites create the supply of development rights when they choose to put a conservation easement on their property in exchange for TDRs to sell and transfer to other areas. Developers using development rights to increase density at receiving sites create the demand. To see TDRs currently for sale, check out the TDR Exchange.
The market price of TDRs is set by five factors:
- The strength of the local and regional real estate markets – i.e. the development industry’s interest in buying additional density in King County;
- The locations where TDRs can be used for additional density and the geographic land areas from where TDRs can be purchased - i.e. TDRs can only be used in certain cities and areas of King County, and only TDRs from certain areas can be used in these areas;
- The price individual developers are willing to pay for an increment of density provided by a TDR (e.g. additional unit/house or additional square footage), given the location and unique set of costs associated with the development project;
- The price at which individual rural landowners are willing to sell their transferable development rights;
- The amount of TDRs readily available in King County’s Program (i.e. the supply of TDR).
TDR prices will vary depending on whether the TDRs are used inside partner cities or within unincorporated King County, and the amount of development capacity each TDR provides a developer.
TDRs cannot be used everywhere. King County has designated receiving areas in unincorporated King County and approved partner cities. TDRs in each receiving area provide different development capacity. Specific details on how to use TDRs in each receiving area can be found on the receiving site information page.
Transferrable development rights are bought and sold through private party transactions, facilitated by TDR program staff; TDRs can also be purchased from the King County TDR Bank, which acquires TDRs from private property with high conservation value which is under threat of development.
Private TDR market analysis (Data from 2000 - 2014, excluding King County TDR Bank transactions)
- Over 50 private developers have used TDRs in their projects
- 71 private market transactions have occurred
- 518 TDRs have been bought and sold
- Average of 5 transactions per year
- Average of 34 TDRs bought and sold annually.
- $7.13 million exchanged between private developers and private landowners
- 1,105 TDRs allocated to private sending site landowners
- Nearly 300 TDRs redeemed by developers for increased density in receiving sites
- With 500 credits bought/sold and 300 redeemed, there is some credit speculation occurring in the TDR market (i.e. market participants buying, holding, transferring, etc.)
- Current private market supply is 851 available TDRs
- Current King County TDR Bank supply is 1,216 TDRs
To help you understand and participate in the TDR market, the King County TDR program offers:
- Sales data for all TDR transactions in tabular format,
- Charts showing recent and historical TDR market activity, and
- The King County TDR Exchange, which allows you to browse TDRs for sale, find buyers in search of TDRs, and post for sale and wanted listings.
- Detailed information about buying and selling TDRs.