Boost for TDR in Bengaluru, usage curbs eased

Bengaluru: In a significant development, the state government has expanded the market for transferrable development rights (TDR) certificates in Bengaluru by relaxing the restrictions on their use. This change — the second in the past year — is expected to significantly boost the appeal of TDRs, benefiting builders, intermediaries and property owners who surrender their land for public projects.

According to the notification issued on Tuesday, the state government has proposed the utilisation of TDRs, or development rights certificates (DRCs), anywhere within the limits of Greater Bengaluru Area (GBA), irrespective of the Local Planning Area (LPA) boundaries.

While the GBA limits currently stand at 709 sq km, it is expected to expand further in the coming days as the government has already re-structured the BBMP to include the peripheral areas.

Until now, there had been restrictions on the utilisation of TDRs issued by one planning authority (e.g., the Bangalore Development Authority, or BDA) in the jurisdiction of another (e.g., the Bengaluru–Mysuru Infrastructure Corridor Area Planning Authority). These restrictions were based on the assumption that land values on the city’s outskirts were lower than in central Bengaluru.

Due to the limited market for TDRs, driven by these utilisation restrictions, many landowners were unwilling to relinquish land despite high real estate values in the city. The usage restrictions also led to irregularities, with some builders misusing TDRs by colluding with officials to apply them in unauthorised areas.

The notification also mandates that the BDA maintain records of all DRCs utilised across the GBA, regardless of planning jurisdictions.

A senior BBMP official described the move as a “much-needed reform”, adding, “It treats the city as a single unit.”

Echoing this sentiment, a prominent city-based builder said the move removes ambiguity surrounding TDR usage. “Until now, the market was restricted. By opening up utilisation across the entire city, more multi-storey buildings can be developed to meet growing housing demands,” he said, adding that the government must now streamline the TDR buying and selling process.

Last year, the government had relaxed TDR rules by allowing the BBMP to grant TDR compensation for agricultural land on par with residential property, provided the property owner pays the applicable development charges for converting it to non-agricultural use. This was done to make TDRs attractive for all stakeholders.