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A relatively new government land planning tool, transferable development rights (TDR) is described. TDR can preserve historic buildings or environmentally sensitive land and still allow the property owner to maintain his ownership right of use. TDR are property use rights that can be transferred from one property to another by government-created programs. Many existing TDR programs have resulted in a potentially worthless property right because of the program's inefficiency. A TDR program must be designed with basic economic principles of supply and demand in mind. For valuation of TDRs in a new or existing program, an appraiser must understand the 4 economic factors - utility, scarcity, desire, and effective purchasing power - in order for anything to be of value. Research in Florida indicates that the market value of TDRs does not necessarily reflect prevailing land value in either the sending or receiving area. A case study is presented.

Transferable development rights (TDRs) are property use rights that can be transferred from one property to another by government-created programs. It is a relatively new land use tool that can preserve historic buildings or environmentally sensitive land and still allow the property owner to maintain his ownership right of use. The concept is based on the principle that fee simple ownership of real estate is a bundle of rights that are divisible and severable. The right of use is the most valuable part of real property that can be marketed separately from the physical real property to preserve important properties in their natural state or historic buildings in a well-designed TDR program.

Under most programs, the owner of the parcel of land to be preserved (the sending parcel) has the option of taking the development rights allocated by a government planning program and transferring them to another parcel of development land (the receiving parcel). The original sending parcel's right of use is separated from the physical real estate and transferred or sold to someone else to use on another parcel of real estate within a designated receiving area. The sending and receiving areas can be small or quite large and encompass a few or thousands of properties.

TDR programs can achieve numerous land use goals ranging from growth management to the preservation of historic landmarks, open space, natural wetlands, forest areas, or agricultural land. Communities benefit from TDR programs because they can preserve important resources at minimal cost. Land owners can benefit because they can sell the use rights and receive compensation for not using or developing their property.

This method of government zoning/ land use regulation typically protects an area designated for preservation where little or no development is permitted by shifting development potential to other growth areas more suitable for development, such as urban areas with services close by. After the transfer of TDRs, future use of the sending parcel is restricted by easements or deed restriction. The program may limit future use to the existing use, whether it be agricultural or farm land, historical building, open space, or environmentally sensitive land/wetlands with an easement.

Most TDR programs are labeled as such, but some have slightly different labels like severable use rights (SURs), marketable development rights (MDRs), development rights transfer (DRT), purchase of development rights (PDRs), and others. However, almost all separate development rights from one parcel and permit the use rights to be sold or transferred to other noncontiguous land. In Florida and other states, there are other planning programs similar to the TDR concept.

In the future there will probably be many more TDR programs across the United States due to increased awareness of the need for environmental and historical preservation over the past decade, recent federal legislation to protect private property rights that may require property owners to be compensated for loss of use rights, and the program's benefits of preserving property without expensive eminent domain action.

The Appraisal of Real Estate defines transferable development rights as "a development right that is separated from a landowner's bundle of rights and transferred, generally by sale, to another landowner in the same or a different area." This is incorrect because a TDR can be used by the landowner of the sending site or someone else.

A better definition of a TDR could be: Transferable development rights are property use rights that can be severed from one parcel (sending parcel) in a program designated sending area and transferred to another property (receiving property) in a designated receiving area to gain greater development intensity on the receiving property. The sending property usually receives severe use restrictions in exchange for this right to sell/transfer the TDRs.

This transfer of property use rights is very similar to the well-known planned unit development (PUD) or cluster development concepts. In both types of developments, potential use for the entire parcel is approved and then allocated within the same property with the same ownership. However, a TDR can be sold or transferred to property owned by others and used in other nonadjoining areas of the same governing municipality.

A mandatory TDR program designates all parcels within the sending area to have specific use restrictions whether or not a TDR transfer occurs. A voluntary program allows property owners in a sending area the option of using their property subject to legal use restrictions, or to sell/transfer the TDR and place the land use restriction on the property.

Most programs in Florida are voluntary rather than mandatory. A voluntary program may avoid the legal taking issue that could result from mandatory programs. However, mandatory programs seem more successful because they provide incentives for sending parcels to sell their transferable development rights. This typically results in more confidence in the program. However, programs can be voluntary and successful, but they must have strict sending area development restrictions as incentives to the property owners to use the program along with other organized program characteristics or there is no market with supply and demand (buyers and sellers) of the TDRs.

A TDR bank, which buys development rights from the owners of sending parcels and sells them to the developers of receiving parcels, can be an important economic component of a successful TDR program. A TDR bank can help establish a TDR market because it can stabilize the market by providing steady demand, show purchasers/ users of TDRs sincerity of the program, and greatly reduce transaction costs because the bank can assist with legal and real estate procedures, such as placement of use restrictions. For new or infrequently used programs, negotiating the TDR sale is difficult because its value is not firmly established. However, many TDR programs actively operate without a TDR bank, like programs in San Francisco; Montgomery County, Maryland; and others. Of the 16 TDR programs in Florida, only four (Hillsborough County, Palm Beach County, Lake County, and the city of Largo) have a TDR bank. However, of these, two had no sales activity and the other two have only had sales to the bank. The apparent inefficiency of these four TDR banks may be due to the overall inefficiency of their programs.

The managers of three California programs (San Obispo County, Monterey County, and the city of Morgan Hill) have credited TDR banks for contributing to the success of their programs. The absence of a TDR bank has not hampered the success of the San Francisco program because the program's other components have been effective.2 An analysis of numerous existing programs nationwide indicates that a TDR bank is not essential for a program to operate efficiently. What is essential is a program with incentives for TDR owners to sell them and incentives for urban developers to buy them.

TDR Program Requirements

Historically, most municipalities across the country have found it difficult to translate the TDR concept into an efficient operating system. While the theory appears very simple and attractive for economic and environmental preservation reasons, its implementation is frequently too loose or incomplete. Hence, in some programs, the TDRs are rarely used by the market and the program does not accomplish its goals.

Seven factors must exist for a TDR market to evolve and the program to be successful. They are incentives for the program to operate efficiently and allow the TDR owners to sell or use their use right. These seven factors are as follows:

1. The program must be legally defensible.

2. Commitment from the municipality (politically and administratively) to use TDRs, and refusal to grant rezoning, zoning variances, or increases in density without TDRs.

3. A simple and uncomplicated program that is easy for the municipal staff to administer and the public to understand with designated personnel to manage and track the program.

4. Clear identification of sending and receiving areas.

5. Program-induced incentive for sending area owners not to use or develop the property but to sell TDRs (i.e., market supply of TDRs).

6. Market demand for increased density/ development in the receiving area (i.e., market demand to buy TDRs). 7. Very importantly, public knowledge of the existence of the TDR program and its potential use (i.e., public education program).

Two other nonessential factors that can help stabilize a program are:

Set up a TDR credit bank to provide stability to the program. The bank allows the municipality to control the program and assists in the creation and stabilization of a TDR market.

Require TDR deeds to be recorded in the public records to increase public knowledge, establish a market, and permit ad valorem assessments that reflect a property's potential use.

TDRs are a relatively simple concept, but unless their programs are well planned and executed, they are not used. The concept has many advantages to the municipality, community at large, and property owners that can make them politically attractive.

ORIGINS

The TDR idea actually evolved from English precedent, as with many American laws. The British originated this concept of separating use rights from the underlying real estate with a development right acquisition act titled the English Town and Country Act of 1947. It has been the means by which the development rights to land have been expropriated with compensation, leaving the landowner the right to use and enjoy the land subject to the government's right to keep the land undeveloped.3

The concept of TDRs was introduced in the United States in the early 1960s and 1970s. During the 1970s, numerous articles were written, but most TDR programs were not initiated until the late 1970s and 1980s:

As of 1983, it was estimated that there were more articles on TDR than there were transactions.

Peter Pizor, 1986 4

One report indicates there were 48 jurisdictions throughout the United States with TDR programs.- As of 1995, there were more than 100 known operating TDR programs in the following 30 states, along with the District of Columbia and Puerto Rico. They are: Alaska, Arizona, California, Colorado, Connecticut, Florida, Georgia, Illinois, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, New Hampshire, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, South Dakota, South Carolina, Texas, Vermont, Virginia, Washington, and Wyoming.

There are over 27 programs in California and 16 in Florida alone. Table 1 shows their evolution in Florida. The TDR concept is obviously growing in popularity across the country and many more programs are being initiated.

A very important part of an appraisal analysis or any litigation/condemnation involving TDRs is determining whether they are real or personal property. From an appraiser's perspective, TDRs clearly appear to be real property. However, to some people, this is a controversial and undetermined issue. For attorneys, the definition of real property is in state statutes, which are typically related to their ad valorem statutes. Obviously, the determination as to whether TDRs are real or personal property will affect their treatment in an appraisal and in any litigation. Therefore, clarification of the definition of real property and classification of a TDR is crucial.

The right to develop or use one's physical property is one of the bundle of rights inherent in fee simple ownership of real estate. TDRs are a government planning tool that grants specific property owners the right to detach this property ownership right and sell it to others. Therefore, TDRs are a right of use to specific real estate and appear to be real property.

Other examples of severable and transferable property rights include mineral, timber, water, air, and easements. Most TDR programs appear to permit transfer/sale of the rights without designating the receiving site. This implies that TDRs are detached or personal property, but they are usable only on real estate and their detachment is only an instrument of ownership, like a deed.

TDRs AS REAL PROPERTY

The Appraisal of Real Estate indicates the right to use land as real property and defines these basic terms and concepts as follows:

Real estate is the physical land and appurtenant affixed to the land, e.g., structures.

Real property includes all interests, benefits, and rights inherent in the ownership of physical real estate. A right or interest in real estate is also referred to as an estate. Specifically, an estate in land is the degree, nature, or extent of interest that a person has in it.

This book states that real property includes the right of use, among other rights:

Real property is said to include the "bundle of rights" inherent in the ownership of real estate. Ownership rights include the right to use real estate, to sell it, to lease it, to enter it, to give it away, or to choose to exercise all or none of these rights...Partial interests in real estate are created by selling, leasing, or otherwise limiting the bundle of rights in a fee simple estate.6

The Uniform Standards of Professional Appraisal Practice (USPAP)' similarly defines real property.

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According to Black's Law Dictionary, California Civil Code 657 says that "property is either: real or immovable; or, personal or movable." It indicates that real property includes "rights issuing out of land"8 by defining it as follows:

Real Property. Land, and generally whatever is erected or growing upon or affixed to land. Also rights issuing out of, annexed to, and exercisable within or about land. A general term for lands, tenements, and hereditaments; property which, on the death of the owner intestate, passes to his heir. Real or immovable property consists of: land; that which is affixed to land; that which is incidental or appurtenant to land; that which is immovable by law; except that for the purposes of sale, emblements, industrial growing crops and things attached to or forming part of the land, which are agreed to be severed before sale or under the contract of sale, shall be treated as goods and be governed by regulating the sales of goods. (Calif.Civil Code, 5 658)9

Other court cases support TDRs as being real property and state that:

"TDRs constitute real property interest, the value of which may be assessed upon transfer."10

"The concept of TDRs is simple and straightforward. Ownership of land carries with it a bundle of rights, including the right to construct improvements on the land."11

"The essential characteristic of Pinelands Development Credits (PDC) is that it represents a right in the holder to develop land more densely than otherwise permitted. As such, a PDC is not symbolic of a venture for profit or based on "the entrepreneurial or managerial rights of others. Accordingly, the court concludes that PDCs are not securities within the scope of the Securities Act of 1933."12

"Property rights are divisible and transferable."13

"Transferable development rights were not real property subject to assessment for ad valorem assessment."14 However, the decision appears to have been made solely based on a State of Florida taxation definition which has unusual requirements. The court recognized that its conclusion "constitutes a strict construction of the taxing statutes, which is required under settled law...We conclude that if TDRs are to be taxable as real property, that is for the legislature to provide, not for the courts through a liberal interpretation of the applicable statute."15

In Florida, real property is defined as "Real property-land, buildings, fixtures and all other improvements to land; the terms 'land,' 'real estate; 'realty,' and 'real property' may be used interchangeably."16 This definition appears to consider only land and physical improvements real property but not rights, benefits, or other interests. The definition seems to have been created for taxation even though it is the only definition in the Florida state statutes for this very important topic.

In the state of Washington, "development rights are considered real property, and are taxed at the time of the sale or transfer."17 Various Florida programs refer to TDRs as real property in their ordinances. Collier County states that "development rights shall be considered as interests in real property."18 Dade County defined severable use rights as "lawful permitted right of use of real property."19

TDRs appear to be real property as evidenced by prevailing definitions, available case law, specific references within some programs, and opinions by some attorneys experienced in the TDR field. The keys to this issue, which appear controversial to some, are the facts that TDRs are a benefit and right derived directly from real estate ownership, are intangible only until used, can only be used on specific real estate (i.e., physical land), and are evidenced by paper documents like a real estate deed. However, as more programs evolve, property owners with their attorneys will dispute issues, and more case law will evolve to clarify this issue.

GOVERNMENT POLICE POWER

TDR programs are implemented by zoning ordinances and provide benefits historically achieved by expensive eminent domain. Governments have broad authority to regulate property use based on police powers (i.e., limit property use for public good, provided that regulations do not deprive an owner of all reasonable return) subject to the Fifth and Fourteenth amendments of the U.S. Constitution. These amendments preclude government from taking property (i.e., all rights of use) for public use without just compensation and from depriving individuals of their private property without due process of law.

A TDR program can permit a municipality to downzone properties dramatically in specific areas to preserve them and not have to condemn or pay for the property. A TDR program can downzone properties to agricultural, recreational, or other low-intensity uses and give the owners TDRs in lieu of compensation. It resolves the taking/compensation issue because the concept allows the property owner to use a property's right of use, but just not on the property to be preserved. However, case law suggests that TDRs must have market value for a mandatory program to be legally defensible.

A recent case upheld that the governmental use of TDRs is not a taking. The New York Supreme Court found that the "building owner was not substantially deprived of economic benefit of property and could avail herself of transferable development rights, which thus established that designation of building as landmark was not unconstitutional taking."20

A recent Supreme Court of New Jersey case held that (a TDR program) "Pinelands Protection Act did not violate takings clause by restricting landowner's use of property to farmland and related uses...Plaintiff retained several viable economically beneficial uses (including TDRs)...and there exists no constitutional right to the most profitable use of property. "21

A 1983 decision upheld a TDR program "to be proper and reasonably related to a valid public purpose" (i.e., zoning).22 Further, in Matlack v. Freeholder Board for Burlington County Residents, "The court held that the County had the authority to purchase and sell PDCs and thus create a market for them, and held that the County had not acted arbitrarily and capriciously in designating $10,000 as the fixed purchase price of a PDC."23

A 1986 case indicates, "If this (TDRs) were a valid exercise of police power, there would be no need for any form of compensation...The transfer of density credits does not constitute just compensation for property taken by eminent domain. This provision of our state constitution requires compensation for such a taking to be made by payment of money in an amount that has been judicially determined."24

The Penn Central case upheld that TDR programs can be implemented without violating the Fifth Amendment's takings clause. Courts appear to uphold TDR programs, provided the TDRs have value. The case stated, "If substitute rights received provide reasonable compensation for a landowner forced to relinquish development rights on a landmark site, there has been no deprivation of due process."25

In Fred F. French Investing Co. v. City of New York, the court concluded, "The State may not, under the guise of regulation by zoning, deprive the owner of the reasonable income productive or other private use of his property and thus destroy all but a bare residue of its economic value...The French decision...shows the mere granting of transferable development rights to an owner will not be found to be adequate compensation for excessive restriction of an owner's right to build...where there is not clearly available alternative lot and where no clear value can be placed on the transferable rights."26

Therefore, TDR programs may be vulnerable to legal action if there is no market for development rights. This situation could potentially leave a property owner with a reduced value in his or her land with no way to recoup lost value.

"Development rights are an essential component of the value of property because they constitute some of the economic uses to which the property may be put. As such, they are a potentially valuable and even a transferable commodity."27

These, and other cases, indicate that a mandatory type of TDR program, which dramatically restricts use of the sending property, must have usable rights with market value to be legally defensible or it may be considered a deprivation of property without due process of law. However, if any TDR program (voluntary or mandatory) is operating efficiently, the TDRs will have value.

VALUATION INTRODUCTION

Market value appraisal requests will arise regarding both TDRs as separate property and for real estate within a TDR program with and without the TDRs. Whenever a TDR is separated from the underlying real estate, a partial property interest is created. Therefore, real estate within a designated TDR sending area can be appraised with the TDRs, or either component can be separately appraised.

To appraise the real estate with TDR rights or either component separately, an appraiser should: understand the TDR concept, have made a determination that it is real or personal property, understand applicable appraisal principles, have knowledge of the municipalities' overall TDR program, and apply realistic valuation techniques that reflect market value.

According to The Appraisal of Real Estate, "Appraisers can value TDRs with ordinary sales comparison techniques if there are sufficient transactions to constitute a market. When market sales are lacking, the income capitalization approach may be applied."28 An income capitalization approach for this type of property (TDRs) may not be reflective of their market activity. They are bought like many goods based on supply/availability and demand/need. Hence, historical sales in the same program or programs in similar areas can best help estimate its market value or most probable price.

If the market for TDRs (as separate property) is active and sufficient quantities of comparable sales exist, the assignment can be relatively simple. However, when the market for TDRs is inactive or they are in a new program, the valuation assignment is obviously much more complex and difficult. Their price or value can be predicated based on activity in other programs, existing underlying land values, or by their contribution value to real estate and the probable receiving area after making adjustments for actual costs to acquire them and possibly for the risk factor a buyer may anticipate. These are considered variations of the sales comparison approach to value. One author indicated that market value of a TDR is an equilibrium price between land value of the seller and buyers.29 This concept was reportedly used in Lee County, Florida, to predict a TDR value of $6,000-$7,000 in the early 1980s. In the mid-1980s, hundreds of thousands of TDRs were created in Lee County, but only two have sold between 1986 and 1995, and these were in 1990 for $3,500 each. Many more are available for sale and have been professionally marketed-but there was no demand and no sale.

MARKET VALUE CONCEPT

If an appraiser or a client is seeking market value of TDRs or the underlying fee property without the TDRs, a review of the market value definition and concept is crucial. "Market value is inherently a simple concept. It is an objective value created by the collective patterns of the market."3 This definition, currently promoted by the Appraisal Institute and The Appraisal Foundation has two very important parts related to TDRs: "the most probable price" and "a reasonable time is allowed for exposure." According to the textbook, market value as the most probable price is a point of central tendency (not highest price) in the market. However, it also states, "For a market to exist, there must be enough buyers, sellers, and product to provide competition."31

USPAP requires appraisers to consider exposure time as part of a market value estimate:

When estimating market value, the appraiser should be specific as to the estimate of exposure time linked to the market value estimate. Reasonable exposure time is one of a series of conditions in most market value definitions. It is always presumed to precede the effective date of the appraisal."

Reasonable exposure time and conditions in the market value definition indicate that a market value (most probable sales price) is based on reasonable exposure time in the marketplace. Although this time period is typically abstracted by appraisers from the market, listings on the market for multiple years are frequently considered by brokers to be priced too high. Is reasonable exposure for TDRs six months, one year, or five years? As with any property, an unreasonable asking price leads to an unreasonable marketing time. Therefore, the author contends that if a government TDR program with thousands of TDRs has one or no sales after five to ten years, there may be no demand (i.e., no market) for TDRs separate from the physical real estate and, hence, no market value for TDRs separate from the real estate.

ECONOMIC FACTORS OF VALUE

According to The Appraisal of Real Estate:

Value is extrinsic to the commodity, good, or service to which it is ascribed; it is created in the minds of the individuals who constitute a market...Typically four interdependent economic factors create value: utility, scarcity, desire, and effective purchasing power. All four factors must be present for a property to have value.

1. Utility is the ability of a product to satisfy a human want, need, or desire.

2. Scarcity is the present or anticipated supply of an item relative to the demand for it. In general, if demand is constant, the scarcity of a commodity makes it more valuable...Air, which has a high level of utility, has no definable economic value because it is abundant.

3. Desire is a purchaser's wish for an item to satisfy human needs...or individual wants beyond the essentials required to support life.

4. Effective purchasing power is the ability of an individual or group to participate in a market-that is, to acquire goods and services with cash or its equivalent."33

The existence or nonexistence of these basic factors in a TDR program will definitely affect market value of all TDRs in that program.

SUPPLY AND DEMAND

The complex interaction of the four factors that create value is reflected in the basic economic principle of supply and demand.

In economic theory, the principle of supply and demand states that the price of a commodity, good, or service varies inversely, but not necessarily proportionately, with demand, and directly, but not necessarily proportionately, with supply. In a real estate context, the appraisal principle of supply and demand states that the price of real property varies inversely, but not necessarily proportionately, with demand, and directly, but not necessarily proportionately, with supply.34

A key consideration in the valuation of TDRs is an understanding of their market. Unless the program is designed to give TDRs the four economic factors-utility (use), scarcity (limitations on availability), desire (demand), and effective purchasing power (reasonable price)-there is no market demand for them and hence no market value.

A SEPARATE PROPERTY

In order for TDRs (as separate properties) to have any market value, the municipality's program must be operating with some efficiency as previously outlined. Without an effective program, there is no market demand for TDRs and hence very questionable or no value. There are numerous examples of TDR programs that have operated for five to ten years and had only one or no transfers at all. An analysis of multiple TDR programs can help in gaining a better understanding of a TDR program's effectiveness, especially if sales activity has been nearly non-existent.

Of the 16 Florida programs, only Dade County and Monroe County have periodic sales of TDRs. Five programs have each had only a few sales over long periods of 10 years or more. They are Collier County, Lee County, Palm Beach County, Sarasota County, and the city of St. Petersburg. The other nine programs have had no sales.

Therefore, a program can exist with thousands of TDRs, but with little or no demand for them. If a program is not operating efficiently, there is no need for anyone to purchase a TDR, which, therefore, would have little or no value. However, where there is a demand for development in a receiving area-and zoning limits density to less than that anticipated by demand-additional density will be desired and TDRs will always have value. If demand for development exists or increases, market value of usable TDRs will increase.

When Dade County, Florida, adopted the program in 1981, very little activity emerged for several years. Not until 1988 was a TDR used. Since then, there have been 213 TDRs used in 48 applications, principally during 1990-1994. The program has potential for approximately 4,533 TDRs, a huge supply. Very few are being sold and then mostly to a few individuals who the county officials know understand the process. These people are wholesalers or brokers because they find a buyer/user who wants TDRs. Then they buy some TDRs wholesale and sell them retail at higher prices. The county maintains no records of TDR sales, only records of their use for building permit applications. This makes research for sales activity more difficult for buyers and appraisers.

WITH OR WITHOUT TDRs

Real estate appraisers working within a municipality that has a TDR program should research the program in the same manner as one would check zoning-by verifying possible and prohibited uses, and limitations on those uses. Properties in the sending area can be separated into the TDRs and the underlying real estate, creating two separate properties: fractional or partial interests.

For valuation of properties within a TDR sending area, the usual comparable sales analysis is usually a good appraisal method, provided the verification process determines TDR retention status for the subject property and all comparable data. For properties that have sold their TDRs and have a use restriction, one may believe that in an efficiently operating market, the market value of a sending parcel would be composed of the value of the TDRs and the residual property value. However, in an inefficient operating TDR program, this would not necessarily be true. Based on sales in the Dade County program, some owners believed their property had the same value with or without the TDRs.

According to The Appraisal of Real Estate, the concept of contribution states that the value of a particular property component is measured in terms of its contribution to the value of the whole property, or as the amount that its absence would detract from the value of the whole. Market analysis may show that the before property value minus the part taken (TDR) equals the remainder property value. However, the sale or removal of the TDRs may leave a property with the same highest and best use from the market's perspective. For example, some properties may have an agricultural or limited recreational use highest and best use before and afterwith no change. If the property's highest and best use is similar before and after, there is no use change and maybe no value change. In other cases, removal of TDRs may leave a property the same as before or may result in a major loss of potential use, resulting in a dramatically reduced value. However, in all cases, contribution value of the TDR requires a market analysis of demand from a perception of potential use and value to a user.

CONCLUSION

A government TDR program will probably be coming to an area near you soon. As public concern for preservation of open lands grows along with government's need to reduce spending, this land planning/zoning tool may become more prevalent across the country. The concept has tremendous potential to preserve natural resources at little or no cost to the public.

TDRs are partial rights of ownership to real property that should have significant value. However, many existing TDR programs have resulted in a potentially worthless property right because of the program's inefficiency. A TDR program must be designed with basic economic principles of supply and demand in mind.

For valuation of TDRs in a new or existing program, an appraiser must understand the four economic factors for anything to have value. Research in Florida indicates that the market value of TDRs does not necessarily reflect prevailing land value in either the sending or receiving area. Also, taking this partial interest away may leave a property with the same highest and best use and the same market value as it had with the TDR right. Hence, TDR programs must be well designed and orchestrated, or else TDRs will not be used in the market and will have minimal to no value.