Designated Receiving Areas – Receiving areas are sites where increased development density could occur without threatening community character or sensitive environmental resources. These areas are often designated based on access to existing public water, sewer and transportation infrastructure. Landowners in this area may purchase development credits in exchange for development density in excess of existing zoning.

A Formula for Allocating Rights – Once it is determined that development rights are to be severed from sending area properties, one must be able to calculate the number of credits a sending area landowner will have available for transfer and the density increase permitted in the receiving area with credit use. There are a number of ways to allocate credits. Credit allocation can be based on the number of lost development units or square footage, the gross area of the land or the monetary value of lost development potential. The transfer of development is not restricted to residential uses. Formulas for credit allocation can also incorporate commercial and industrial uses. Municipal land use goals and the local real estate market will determine this formula.

A Procedure for Transferring Rights and Recording Transfers – Each TDR program will have a methodology for transferring credits, recording transfers in a registry and ensuring development restrictions are instituted. Credit transactions can occur in the open market or may be facilitated by a local or county bank or the State TDR Bank.

Public Outreach and Program Awareness and Acceptance – It is very important that the public is aware of TDR in their community and involved in its development from the start. A strong public information campaign can ensure that owners of sending and receiving area properties, as well as other potential credit purchasers, are fully aware of the TDR option and its procedures and benefits.