Transferable Development Rights

The Issue

The current OCP encourages the practice of taking the amount of building density that is permitted on one property and moving that entitlement to another property where such development is considered more appropriate.

An example would be for a land owner in an environmentally sensitive area such as a watershed, to voluntarily sell the right to build on his or her property to a development somewhere else, perhaps in Snug Cove.


TDR has not occurred very often for at least two reasons:

  • The OCP does not contain any formula by which to calculate the value of the building rights being transferred from the “donor” area to the “receiving” area. How much, for example, should one ten acre lot at Cape Roger Curtis be worth in building density in Snug Cove, or at Seymour Bay? It is in the public interest for the developer purchasing the building rights to be able to make a profit, but not to receive an excessive density entitlement from the transaction.
  • Rules that limit the allowable density in a project, except for special exceptions such as TDR, have often not been enforced. Why would a developer pay to obtain additional building rights when a docile municipal council is prepared to allow such added density without any conditions? Without a local “cap” on density allowance, there is little incentive to “trade” development rights from one area to another.

The Snug Cove Village Plan (SCVP), approved in 2005, is an important update of the OCP vision for The Cove. The SCVP contains ample incentive for more compact housing – up to five dwelling units per acre – through receiving transfer of density. The problem, however, is in the “donor” areas of the island: there is no clear incentive for landowners to offer their land to developers for density transfer. The crux of the matter is that TDR exchange values need to closely reflect actual market prices in order to achieve liquidity – a flourishing market of buyers and sellers. Perhaps an enhanced density transfer mechanism could include the provincially assessed value of the donor land in its calculation of the amount of transferable development rights.

An enhanced system of TDR could contribute to the updated OCP by directing future development into certain designated village or “hamlet” areas that all designed for more compact forms of building as part of a greenhouse gas (GHG) reduction strategy and to provide affordable housing.

This voluntary transfer of building rights, between two transacting parties, is for density that is already permitted in the Land Use Bylaw (LUB). Encouraging this transfer of existing building rights will support the similar reallocation into village areas, of potential building rights that are anticipated in the OCP build-out. (For the difference between LUB and OCP density, see How Growth Management Works).


  • Conduct a financial analysis of any transfer of density rights (TDR) that proposes to increase the number of dwelling units in the receiver area beyond the number of dwelling units in the donor area, as an aid for municipal council to determine a value for the density being transferred.