The concept of a transferrable property right is a relatively new idea in Australia. It sits in the emerging
property theory space referred to as Deep Property which is concerned with traditional property rights connection to intangible assets. Transferrable Property Rights or TDR’s essentially server the connection between a site (Lot) physical location and its inherent development potential. Therefore, you can apply a sites specific statutory development potential to another site thus transferring its, for example, FSR floor space ratio or HOB height of building from one site to another…….But why??
The beginning of TDR’s began in New York in the 1970s, they were first adopted to ensure the preservation of the cultural heritage of buildings that were at risk of being developed. This transference of sites development potential ensured the preservation of over 80 of New York’s most culturally
significant sites.
In Australia, this has been adopted in particular in the Sydney City Council circa 2002 with its adoption of the Heritage Floor Space Scheme (HFSS), which had sort to replicate New York’s preservation of culturally significant sites with a list of heritage floor space available, its owners and size of
development potential accompanying (permissible). By creating this “market” where TDR’s can be traded it has been able to save several culturally significant sites.
Another application of TDR’s was considered in the case of an erosion case in the NSW northern beaches suburb of Collaroy. It was proposed by the local government to compulsory acquire a row of beachfront homes that were storm affect on reclaimed land by offering TDR’s on land holdings across the road. Whilst the beachfront homeowners had no ownership to the lots across the road it
considered that the proposed TDR’s offered to the (beachfront) homeowner for across the road were
in fact of significant value, ensuring that the appropriate compensation was offered. This also would benefit the local council by way of not having to pay a large amount of money required to Compulsory acquire the properties. In the end, the idea was rejected however it does give an example
of how TDR’s could be applied in a different context.
by Daniel Stephenson