Evaluating Transferable Development Rights at LakeTahoe
Lessons for Understanding the Costs of Market-basedEnvironmental Policy
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Transferable development right (TDR) systems havebeen implemented across the US in order to preserveopen space, historic sites, farmland and ecologicallysensitive area while permitting development. TDRsystems use market mechanisms in addition to zoningordinances to direct development away from publiclyvalued resources towards areas that are better suitedfor development. TDRs have a number of potentialadvantages over other land preservation techniques;however, like other artificial markets TDR systems donot function according to a frictionless economicmodels and involve significant public and p...
Transferable development right (TDR) systems havebeen implemented across the US in order to preserveopen space, historic sites, farmland and ecologicallysensitive area while permitting development. TDRsystems use market mechanisms in addition to zoningordinances to direct development away from publiclyvalued resources towards areas that are better suitedfor development. TDRs have a number of potentialadvantages over other land preservation techniques;however, like other artificial markets TDR systems donot function according to a frictionless economicmodels and involve significant public and privatecosts. Although the literature on TDR systemsrecognizes the complex nature of TDR systems, fewempirical studies have examined the administrativeand transaction costs underlying TDR systems. Thisstudy examines the distribution of these costs onagencies and private sector users of the TDR systemat Lake Tahoe, a fragile alpine lake borderingCalifornia and Nevada. It concludes with a discussionof how to improve TDR markets, and lessons for otherenvironmental markets.
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