TDR allows owners to move unused development capacity to different sites.

In NYC, TDR transfer work is done in two different ways. First, through a zoning lot merger, where separate lots group together so that the unused FAR can be combined into a single zoning lot. The second way is through the Landmarks Preservation Commission (LPC) TDR program. Many buildings in NYC are designated as landmark properties and are not allowed to make any significant changes to them or to build upward on them. To capitalize on the extra allowed unused development rights, landmark buildings are allowed to sell the unused development rights to nearby buildings.

For owners, the ability to sell development rights can be a great opportunity if they never planned to develop their buildings or thought they were unable to because they own a landmark property. The typical buyer for development rights could be Condo or Rental developers.

Many owners think that TDR can only be between adjacent properties, but this is not true under the Landmark LPC program.

Example: A landmarked building is located in an R10 zoning district and cannot be further developed due to its designation as a landmark property. Its current FAR (Floor Area Ratio) is built to 2.5, but under R10, it could be developed up to 10 FAR. The owner would be able to transfer that square footage to another nearby site.