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39 Nat. Resources J. 459 (1999)
Transferable Development Rights in the Constitutional Landscape: Has Penn Central Failed to Weather the Storm

handle is hein.journals/narj39 and id is 469 raw text is: ANDREW J. MILLER* Transferable Development Rights in the Constitutional Landscape: Has Penn Central Failed to Weather the Storm? ABSTRACT Transferable Development Rights (TDRs) are a flexible market- based tool that allows land planners to overcome many of the shortcomings associated with traditional zoning practices. A TDR program works by designating a sending zone where develop- ment is restricted in exchange for the right to transfer that development to a receiving zone. Receiving zones are areas where development is permitted with the purchase of development rights (TDRs) from a sending zone. The value of TDRs is decided by the market. TDRs can have many positive land management impacts, but must be developed within the constitutional constraints of the Fifth Amendment's takings clause. This article argues that TDRs may be attacked under the Fifth Amendment in two ways. First, developers required to purchase TDRs may challenge them as unconstitutional exactions. Such challenges are rare but pose potentially serious threats to TDR programs, especially in light of recent Supreme Court decisions limiting the government's power to impose exactions. This article constructs a framework under which land managers may avoid such challenges. Second, landown- ers who have development restricted in exchange for TDRs may challenge the restrictions as a regulatory taking. These challenges are more common and courts have used two very different types of analysis in dealing with them. One approach treats TDRs as an economic use of the land and factors their value into the takings calculus. A second approach performs the takings calculus inde- pendent of TDRs and only considers TDRs as a form of just compensation where a taking has occurred. This article argues that the latter approach is more convincing theoretically and will better protect environmental resources, maximize TDR values, and assure fair and equitable treatment of landowners. As a result, market participants will have increased confidence in TDR market * Law Clerk for the Honorable Sidney A. Fitzwater, United States District Court for the Northern District of Texas; J.D., 1999, Duke Law School; VLE.M., 1999, Duke University Nicholas School of the Environment; B.S., 1994, Cornell University. The author thanks Professor Christopher Schroeder, Duke Law School, and Dr. Carol Mansfield, Nicholas School of the Environment, for their helpful comments and insights.

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