Transfer of Development RightsRight to the City

SCHOOL OF PLANNING AND ARCHITECTURE, BHOPAL

Analytical Framework1. Right to the City & Land Acquisition

1. Town Planning Scheme (Plot Reconstitution Technique)

2. Land Pooling3. Negotiated Land Purchase4. Transfer of development Rights

2. Transfer of Development rights1. Sending and receiving Areas2. Advantages of TDR to ULB’s &

Property Owners3. Purpose and Types of TDR4. Zones for TDR & Development

Rights certificate5. Success Factors

3. TDR practiced internationally1. Montgomery County2. TDR practice in India

1. Bangalore, Chennai, Hyderabad, Mumbai & Pune..

4. Case Study of Greater Mumbai1. FSI Zoning for TDR2. TDR & Ward Densities3. Slum Rehabilitation thru TDR4. Factors affecting TDR utilized5. Issues for TDR utilization6. Recommendations for efficient TDR

mechanism5. Case Study of Bangalore

1. TDR Zones2. Study Areas3. Issues & Improvement Strategies4. FAR in Zoning regulation of RMP

20155. Success of TDR in Bangalore

6. Recommendations for TDR practice in India

7. References

1. Right to the City & Land Acquisition..• The most invaluable resource of the city; land, is static and limited

and thus has an invaluable social and economic value.• The rapid rate of urbanization in metropolitan cities, demands this

land resource for development of infrastructure and thus the process of land acquisition.

• The authorities do not have adequate funds for acquiring the land, which are fixed at a rate much lower than the market rates.

• Thus the legal procedures are cumbersome and costly, resulting in delay.

• These land redevelopment mechanisms include: - The land sharing - land pooling & readjustment technique - Incentive zoning and - Transfer of development rights.

1.1 Town Planning Scheme (Plot Reconstitution Technique) • First implemented in the state of Maharashtra under the Bombay Town

Planning Act 1915.

• Is used to make a group of land holdings in a scheme area suitable for further subdivision and building development by regularizing the plot and providing each land holding with an access road achieve this.

1.2 Land Pooling Consists in acquisition of a plot of land divided into a large number of small parcels belonging

to an equally large number of land owners. Plan and provide all necessary infrastructure such as road, water supply, drainage, electricity

and telephone back to the owners. Used in city scale predominantly involves large tracts of land.

1.3 Negotiated Land Purchase

• This was used first time under the Haryana Development and Regulation of Urban Areas Act 1975.

• The act permits developers to negotiate direct purchases from farmers for large-scale assembly of land for urban development.

• The negotiated prices are 3 to 6 times higher than the Government rates.

1.4 Transfer Of Development Rights

• First devised in 1916 in New York city as part of the first zoning ordinance.

• TDRs allow ownership of the development rights on a privately owned parcel of land to be separated from ownership of the parcel itself.

• The person to whom the rights are transferred, in most cases a real estate developer uses them to develop another piece of property more intensively than allowed by its baseline zoning.

2.1 Transfer Of Development Rights

By UDPFI (1991) 'Development Right to transfer the

potential of a plot designated for a public purpose in a plan, expressed in terms of total permissible built space calculated on the basis of Floor Space Index or Floor Area Ratio allow able for that plot, for utilization by the owner himself or by way of transfer by him to someone else from the present location to a specified area in the plan, as an additional built up space over and above the permissible limit in lieu of compensation for the surrender of the concerned plot free from all encumbrances to the Planning or Development Authority.'

• Making available certain amount of additional built up area in lieu of the area relinquished or surrendered by the owner of the land.

• TDR can be used to focus growth & protect land by transferring development rights from one piece of property to another.

• Sending & Receiving areas or zones are designated.

2.2 Sending & Receiving Areas..

2.3 Advantages of Transfer of Development Rights..

Urban Local Bodies

• Monetary compensation is avoided when the property owner opts for TDRs.

• The acquired land is available free of title disputes, encroachments, and encumbrances.

• In a situation of appreciating property prices, the instrument would incorporate land value appreciation.

Property Owner

• Compensation is given in the form of buildable area as against monetary compensation. An individual plot owner can earn, by selling his development rights, an amount that could be many times the compensation in traditional acquisition.

• Since much less time is taken for the entire procedure, the plot owner gets the development rights faster.

Purposes:- Landmark preservation - Open space preservation- Preservation of fragile lands - As a tool for land use regulation- As a method of encouraging the construction of moderate and low income Housing.- As a method of regulating the location and liming of the community growth.- To provide for acquisition of land under reservation for urban services.

Following types are accountable as TDR:- Heritage - Road- Reservation - Amenity- Slum - Agriculture

2.4 Purpose and Types of Transferable Development Rights..

Based on the intensity of development, the city is divided into intensively developed (A-zone), moderately developed (B-zone) and sparsely developed (C-zone) zones in the plan. The transfer of Development Rights shall be from intensely developed zone to other zones and not vice versa.

If the owner of any land which is required for road widening for formation of new roads or development of parks, play grounds, civic amenities etc., those proposed in the plan shall be eligible for the award of TDR.Such award will entitle the owner of the land in the formof a Development Rights Certificate (DRC); which he may use for himself or transfer to any other person.

2.5 Zones for TDR and Development Rights Certificate..

2.6 Success Factors..

• There should be ready market for purchase of development rights. While this is ensured if there is scarcity of land, the phenomenon of TDR itself may reduce the market price for property.

• Prohibition and restrictions as development regulations should be mandatory so as to create sending zones.

• The receiving zones must be well sited for immediate development, so that the purchase of additional development rights and development at higher densities become financially attractive.

• The re-densification potential is to be checked before designating receiving zones.• The entire program should be transparent, so that trend can be monitored to

simplify procedures, to reformulate the scheme to meet ever changing needs.• Thus, it is clear that TDR has the potential to bring about

Gentrification as a planning tool for focusing growth and conservation.

3.1 TDR practiced Internationally..

•TDR as an instrument was first devised in New York in 1916, as part of first Zoning ordinance. Soon many countries adopted this system to plan their Urban Development.

•It allowed landowners, who had not used their airspace to built skyscrapers, to sell their unused rights to others in the block, so that these buyer builders could exceed height and setback requirements.

•In USA, the TDR schemes have been increasingly used for the last fifty years and are now used in 25 states in a variety of ways.

•TDR can be an effective tool to simultaneously limit development in valuable open space areas while stimulating additional development in areas well suited to higher densities.

•TDR has been integrated in ideal cases of cities such as New Jersey, Chicago, etc. all as a solution for different problems in development.

•The case of Montgomery County, Maryland, USA is discussed below for agriculture TDR which protected their agricultural land and brought about development.

3.1 Montgomery County..Issues:• Lost 18 percent of its agricultural land to

development in the 1970s. • TDR program was established in 1980 to

preserve farmland.• More than one third of the County’s total land

area (110,000-acre) was designated as the sending area.

• Out of which 90,000 acres area is rezoned to a Rural Density Transfer Zone.

• Receiving areas are identified by proximity to existing infrastructure (transportation, other public services).

TDR Solution:• To date, more than 40,000 acres of farmland are

preserved with this technique. TDR-based zoning has allowed the county to permanently preserve almost half of its farmland preservation goal in 20 years.

• Able to achieve goals by harnessing private market forces rather than using public funds.

3.2 TDR practice in India..

PuneMumbai

Hyderabad

Bangalore Chennai

Although TDR program appears to be a potentially powerful land use tool, only a few cities have had success in using this tool;

• Bangalore: DRC to used in same/less intensified zone; TDR not to be received for plots less than 12 m in width; Existing floor area for receiving plot shall not exist 0.6 times the FAR.

• Chennai: FSI in form of DRC equals surrendered land area into 1.5 the FSI further by a factor arrived by dividing the guideline value of the surrendered land with the guideline value of land at which development regulations transferred is received.

•Hyderabad: TDR arrived on basis of relative land value, equivalent in both export/import areas; TDR not allowed in unauthorized buildings; Only for buildings above 15m incentive to TDR is applicable; Max FSI must not be more than 1/3rd of normal FSI.

•Greater Mumbai: Resultant FSI on utilizing plot not to exceed 0.4 times of original plot. TDR receiving plot is not eligible for more than 100% additional FSI provided 20% FSI is mandatorily kept for use of TDR for slum rehabilitation

•Pune: DRC shall not be used in zone A/dense areas. DRC not to be used on plots for housing schemes for slum dwellers for which additional FSI is permissible. In zone B DRC not to be used in front of specified arterial roads (30m).

TDR Road Heritage Reservation Slums AmenityIndian Cities

Bangalore Chennai Hyderabad Greater Mumbai Pune (Source: ITPI 60th National Town Planners Congress 2012, Mysore)

4.1 Case Study of Greater Mumbai..

• Concept of Transferable Development Right in Mumbai introduced in Development Control Rules, 1991 of the Mumbai Municipal Corporation to accelerate and encourage the acquisition of reserved plots of land and eliminate the concept of monitory compensation to the owners.

• On 25th March 1991, the State Government allowed the use of TDRs.

• Remains only an alternative to compulsory land acquisition.

• Zoning is done for TDR transfers as;

- Island City - Suburban city

- Slums

Mumbai Suburbs

Island City

Slums

• Plots in island city cannot receive TDR.• Generally TDR receiving areas are north

of the Sending zones.• TDR is generated from Road,

Reservations and Slums and Heritage.• Over 60% of population of Mumbai is

estimated to be living in slums.• A Slum Rehabilitation Authority has been

instituted as planning authority for all slum areas, which awards developers of slum land with TDR in place of monetary compensation.

4.2 TDR Zones..

Slums of Dharavi(Source: alain-bertaud.com)

Ward Wise Average Land Price

TDR and FSI zoning..• Island City has FSI=1.33 and can only

serve as TDR sending zone.

• Mumbai suburban has FSI=1 and can both send and receive TDR. Receiving plot must be in same ward or any other ward north to sending plot.

• Slum areas can generate TDR through SRA redevelopment policies and TDR generated here may be transferred only to suburban zone.

(Source: MCGM)

4.2 Ward densities and TDR..

• High density areas have minimum TDR absorbing capacity.

• Conversely low and medium density localities have higher potential to absorb TDR.

• For administrative conveyance, it would prove beneficial if the TDR sending-receiving and other legalities are set ward wise.

(Source: MMRDA, MCGM)

4.3 Slum rehabilitation thru TDR..

(Source: MCGM)

• Ward density: The matrix shows a negative relation between the ward density and TDR utilized though not significant.

• Percentage of open space: Here again there is a positive though not significant relation between the two factors.

4.4 Factors Affecting TDR utilized..

• TDR can be easily hoarded and monopoly in TDR market established, creating artificial rise in real estate prices

• Mumbai TDR market dominated by four major companies holding over 80 percent of TDR stock.

• Government has very limited control on TDR prices and does not regulate it.

• TDR policy causing construction spree in suburbs , putting load on its limited infrastructure.

• Process of TDR utilization takes 2-3 years, about same as land acquisition with returns at par with compensation.

• Market volatility high due to speculations and long process of TDR trading.

4.5 Issues for TDR utilization in Greater Mumbai..

4.6 Recommendations for efficient TDR mechanism in Mumbai..

• TDR receiving capacity of wards be fixed, considering spatial characteristics of area, density, open areas, market rates and TDR rates.

• DRC must come with expiry dates to prevent hoarding by traders and middlemen.

• Local governments may set up bank/exchange as a regulatory body which eliminate middlemen and their abusive practices and also act as hedge against fluctuations.

5.1 Case study of Bangalore City..

• Bangalore, the 5th largest metropolitan city in India as per provisional 2011 Census.

• The Karnataka Town Planning Act 1961, vide section 14(B) which was introduced in June 2004 deals with TDR for acquiring lands for public purpose which includes road widening.

• Implementing agencies - Brahut Bangalore Mahanagara Palikae.

Conditions

• DRC to used in same/less intensified zone;

• TDR not to be received for plots less than 12 m in width;

• Existing floor area for receiving plot shall not exist 0.6 times the FAR

• When surrendered land has FSI of 2/more additional FSI as TDR is 0.25

5.2 TDR Zones of Bangalore City..

ZONE 3

ZONE 2

ZONE 1

• Zone 1• Core area consists of the

historic petta.• The Administrative Centre

and the CBD and the peri-central area

• Zone 2• Recent extensions (2003)

of the City flanking both sides of the Outer Ring Road portion termed as a shadow area.

• Zone 3• New layouts • vacant lots and • Agricultural• Green belt• including small villages(Source: BBMP Delineation)

Hosur Road

Nyanappanahalli Main Road

Tannery Road

5.3 Study areas..

5.3 Studies Areas..• At Present 83 Roads have been proposed for road widening and only three

to for have been implemented through the TDR concept.• 467 rights issued till now, translating to develop area of 5,16765m2.

Nyanappanahalli Main Road Tannery Road Hosur Road

• Govt claims the work has already started in the stretch

• Residents have not given in yet & plan to file an injunction suit against the widening.

• BBMP officers threaten to demolish the apartments if they did not accept TDR & claim their duty is to follow revised Master Plan.

• Govt says to proceed with acquisition only after giving formal notice about extent of widening and getting the residents' consent.

• BDA has sanctioned a road-widening project as part of its Master Plan, 2015.

• Residents welcome the move but are against BBMP, which is keen to acquire the land by issuing Transferable Development Rights (TDR) certificates instead of providing compensation based on market rates.

• Shopkeepers only solicit for the compensation • People complain the road is wide enough to

handle day-to-day traffic but narrow to handle airport-bound vehicles.

• Traders observe that TDR is worthless and will to hand over their land in return for compensation

• BCC officials gave formal requisition TDR forms to 250 properties on Hosur Road alone.

• Few owners interested in DRC.

5.4 Problems in utilization of TDR

• TDR market is not fully developed.

• High Property Rates.

• Citizens unwilling to give up ancestral properties.

• In core area, huge no. of tenants ineligible for any compensation under TDR due to smaller plots.

• New property holders are deterred from accepting TDR and moving on because of the rising property price.

• Of 83 proposed road for widening, only three to four implemented through TDR process.

• 467 rights issued till now, translating to develop area of 5,16765 m2.

• Success of TDR in Bangalore limited due to lack of information about TDR practices among DRC holders.

• Information asymmetry.

5.5 Improvement Strategies For TDR System• Needs to be integrated with master plan.

• Used in synergy with JnNURM

• Exchange and trading machinery be set up.

• TDR buying be made more attractive.

• TDR bank should be set up.

• Complexities of TDR system should be reduced.

• Create public awareness and acceptance.

• Involvement of effective tools such as FSI calculator.

• Needed to provided with the firm administrative support.

• Transaction has to be recorded and tracked.

• Proposed Metro project affected persons (PAPs) to be compensated by the TDR route.

• Planners can make nodes where densification is required and growth may restricted.

5.6 FAR in Zoning regulation of Revised Masterplan 2015• For Redevelopment of core area addition FAR of 0.5 as an incentive is

proposed for the properties in core area when they are amalgamated• Under the Re-development Scheme,

– Maximum plot coverage is allowable up to 60%– Maximum FAR is allowable up to 3.

• As per the prevailing TDR rules 0.6 times FAR allowable can be loaded on to the FAR already reckoned above.– TDR achieving in sq mts in road widening.

• The total FAR that can be utilized in the instant case is as follows. –Allowable FAR for Redevelopment : 3.0–Additional FAR for redevelopment : 0.5–FAR through TDR i.e. 0.6 times of 3 : 1.8

By amalgamating the individual plots, the remaining area left after road widening is 84,699 sq. mt and the available FAR be 5.3

5.7 Success of TDR in Bangalore

• Success has been rather limited in terms of the number of TDR’s issued and the area of land used for public purpose.

• The success of TDR program includes its effectiveness, efficiency, equity, manageability and legitimacy.

• Factors affecting the success of TDR• The existence of a market• The number of buyers and sellers• Regulatory and administrative machinery for implementation • Capacity of the receiving areas.• Consequent increased intensity of the development.

6. Recommendations for TDR practices in India..

• TDR should be implemented synchronously with urban planning and zoning regulations.

• Integrated approach needs to be undertaken with other planning tools for successful implementation of TDR program.

• Effective trading mechanism be set up to make it lucrative for stakeholders.

• Educating programs are necessary to bring acceptance for the TDR system as a fuel for Urban Renewal.

• VIDYADHAR DESHPANDE, (2005). Valuation of Transferable Development Rights (TDR), Institution of Valuation. Pune.

• SHUBHANKAR MITRA, URP 2003. TDR as A Tool for Slum Rehabilitation - Geography and Experience in the context of Mumbai. School of Planning, Delhi.

• NISHA CHHEDA, URP-1103. An inquiry into the effectiveness of transfer of development rights as a development tool -A case of greater Mumbai. School of Planning, Delhi.

• Government of Maharashtra, MMRDA (2001), Regional Plan for Greater Mumbai.

• Government of Maharashtra, Development Control Regulations. Mumbai

• Report prepared by Mayfair Housing, Draft White Paper on TDR. Mumbai

• March 24 (2010), Dissemination Workshop on Governance, Development and Poverty in Bangalore - Focus on Urban Land and Commons, NIAS Bangalore

• http://www.montgomerycountymd.gov/agstmpl.asp?url=/content/ded/agservices/agpreservation.asp

• www.pacindia.org/news/developmentrights

• http://www.beyondtakingsandgivings.com/beyond.htm

• And more..

References..

Thank you for listening..