In 1968, New York City became the first community in the U.S. to adopt a TDR mechanism when it included the transfer option in its historic preservation ordinance. As described in detail in Beyond Takings and Givings, this mechanism allows unused development rights from historic landmark properties to be transferred to adjacent zoning lots. The program offers a one-to-one transfer ratio; the amount of floor area precluded from being used at sending sites is the same amount of floor area which can be transferred to receiving sites. Originally, there was no limit on the amount of density that could be transferred to a receiving site by special permit. However, zoning changes for Lower Manhattan now impose limits on transfers.
Generally, New York’s TDR program does not apply to historic districts. However, the City made an exception through a special zoning amendment for the South Street Seaport District. In this amendment, a preservation area was created and development rights from this area were allowed to be transferred to an adjacent area designated for redevelopment. Financial institutions agreed to write off delinquent loans on buildings in the preservation area in return for development rights; these rights were held in a TDR bank and eventually used to promote the construction of several major office buildings in the redevelopment area. In turn, the owners of property in the preservation area were able to qualify for loans to rehabilitate their historic structures. The restoration of these properties led to the evolution of the South Street Seaport area into an important tourist attraction for the City.
Other special regulations for the transfer of rights from landmark sites were adopted in 1992 for the Grand Central Subdistrict. For this subdistrict alone, the City relaxed the lot adjacency requirements in effect elsewhere but also adopted special limits on the amount of floor area available for transfer.
In 1998, the City adopted a Theater District zone that allows listed Broadway theaters within the Theater Subdistrict (part of the Special Midtown District) to transfer excess development rights to receiving sites anywhere within the subdistrict if the owner remodels the building, submits an operational/maintenance plan and records an covenant restricting use only to that of legitimate theater.
The historic landmarks preserved by the original 1968 TDR program are identified in Beyond Takings and Givings. In addition, that 2003 book contained details about the three transfers that occurred within the Grand Central Station Subdistrict in the late 1990s.
The most recent development is the inclusion of a TDR mechanism in the City’s special West Chelsea zoning district, on Manhattan’s West Side, adopted by the City in June 2005. The zoning district is designed to revitalize a former manufacturing area, promote new housing and create a mixed use neighborhood while retaining the art galleries that have flourished in the former industrial buildings. One of the most unique features of this zoning district is its preservation and reuse of an abandoned elevated rail right of way called the High Line. The High Line was built in 1930 above private property to provide rail access to the meat market on the West Side. After it no longer served freight cars, the elevated right of way became overgrown with wildflowers and meadow grass. The owners of property beneath the structure called for its demolition so that they could make greater use of their land. But the High Line is part of the character of the neighborhood. To resolve this dispute, the West Chelsea district calls for the preservation of the High Line as elevated public open space as well as development regulations to ensure that new development allows sufficient light and air for this new High Line Park. But it also designates property beneath and near the High Line as a TDR sending area. Owners of property in this sending area can transfer unused development potential to receiving areas on nearby streets within the Special West Chelsea District. The baselines and maximum densities vary depending on the sub-area in which the receiving area is located. For example, in Sub-area A, baseline density is FAR (floor area ratio) 7.5 meaning that there can be 7.5 square feet of floor area for each square foot on lot area. In Sub-area A, a bonus FAR of 2.5 can be achieved via TDR. In three other sub-areas, maximum floor area can go from FAR 5.0 to FAR 7.5 when TDR is used. In four other sub-areas, maximum floor area can exceed the baseline of FAR 5.0 and gain an additional FAR 1.0, or a maximum of FAR 6.0 by TDR.
The Special West Chelsea District was honored with a National Award for Planning in April 2006 by the American Planning Association. In its description of the award, APA noted that the zoning district had facilitated over 17 new developments, helping to “…create an economically-integrated neighborhood with a unique character and enhanced value.”
