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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