American Institute of Certified Planners (AICP) Practice Exam

A planning technique that allows landowners to transfer the development potential from one area to another is known as?

1. Land use regulation.

2. Land banking.

3. Transfer of development rights.

4. Impact fees.

The correct answer is: Transfer of development rights.

The concept of transferring the development potential from one area to another is specifically defined as Transfer of Development Rights (TDR). This planning technique enables landowners to sell or transfer their rights to develop land in a designated sending area—often an area designated for preservation or less intensive use—and utilize those rights in a receiving area where development is encouraged. TDR serves multiple purposes in land use planning, including protecting environmentally sensitive or specially designated areas while simultaneously allowing for increased development elsewhere. This technique can help balance urban growth with conservation goals, making it a critical tool for planners aiming to manage land resources efficiently. In contrast, land use regulation typically involves zoning laws and ordinances that govern how land can be used across various districts, rather than facilitating the transfer of development rights. Land banking refers to the practice of purchasing and holding land for future use, which does not involve transferring development potential. Impact fees are charges placed on new development to help cover the costs of infrastructure that will be necessitated by that development, which also does not pertain to the transfer of development rights. Thus, the answer is clearly delineated as Transfer of Development Rights, reflecting its specific role in the framework of land planning methodologies.