Somewhat of a follow-up on another thread, but not close enough related to go with it:
How do you go about establishing the value of development rights, such as for a transfer of development rights (TDR) or purchase of development rights (PDR)? We have absolutely no precedence in the area for valuing development rights.
For example, a multifamily property of 29 acres capable of supporting 533 units with current zoning would be worth $3,225,000. How much would the rights be worth as a percentage of that number? My boss tends to think the development rights are worth substantially less, while I feel it should be similar. I base my arguement on the granting property being rendered worthless for development and the receiving property gains more efficiencies because more units can be developed on a smaller parcel with less infrastructure outlay (economies of scale).
What do you think?