Ahmedabad has emerged as one of the most proactive cities in India in using Transferable Development Rights (TDR) to reshape its urban landscape. With Rs 2,561 crore worth of TDR absorbed, the city has utilised 92 per cent of the rights it issued, reflecting effective application of this innovative urban planning tool.

What is Transferable Development Rights (TDR)?

Transferable Development Rights, or TDR, is an urban planning tool that helps manage land use efficiently in growing cities. It works by allowing property owners who have unused development potential in one location to transfer or sell their rights to develop that potential to another location. For example, if a landowner in an area where development is restricted chooses not to build more than what zoning allows, they can sell the “rights” to build additional floors or units to a developer in another part of the city where higher density construction is permitted. The place where development rights come from is called the “sending area,” usually places that are important to conserve, like slums, heritage zones, or green spaces. The area where these rights are used is the “receiving area,” typically urban or developing zones able to support more construction.

TDR offers a way to balance urban growth with the preservation of important land by guiding development towards suitable locations rather than expanding city limits or overburdening certain neighbourhoods. It creates economic incentives for landowners to conserve land or improve existing properties while allowing developers to build more intensively where infrastructure and demand exist. Overall, TDR promotes compact, sustainable urban growth by redistributing development rights across the city in a planned, controlled manner. This planning strategy is especially important in Indian cities like Ahmedabad, where land is scarce, and the challenge to accommodate growing populations calls for innovative and inclusive approaches to city densification.

Ahmedabad’s TDR Market and Urban Redevelopment

Ahmedabad’s TDR usage has absorbed around 95 per cent of the Rs 2,778 crore issued by 2025. The most notable achievements have been in slum redevelopment, largely driven by the city’s In-situ Slum Redevelopment Policy initiated in 2013. Against Rs 1,525 crore worth of TDR issued for slum efforts, utilisation has already crossed Rs 1,761 crore. This has supported 33 redevelopment projects over 7.2 hectares of land and delivered homes to almost 24,000 families. This concentration of TDR demand is especially significant in west Ahmedabad, in residential zones marked R1, R2, and R3, where developers use TDR after they have exhausted the floor space index (FSI) limits on their own sites.

Besides slum redevelopment, Ahmedabad has also seen a vibrant private housing redevelopment market, with 178 projects worth Rs 3,509 crore creating nearly 11,000 new dwelling units across 35.2 hectares. However, private redevelopment projects often face delays due to disagreements among residents, slow approvals, and lack of standardised procedures, which the TDR mechanism helps to alleviate.

Heritage Retrofitting and Broader City Planning Benefits

TDR has not only supported housing but also conservation efforts. Ahmedabad, recognised as India’s first UNESCO World Heritage City, uses TDR to aid restoration of its historic heritage structures. Till 2025, Rs 17 crore worth of heritage TDR rights have been issued and around Rs 16 crore absorbed to benefit 74 heritage houses. This facility encourages property owners to maintain and repair old buildings by giving them tradeable development potential that developers elsewhere can buy. This approach balances preservation with urban densification.

As experts from CEPT University and the Gujarat Housing and Labour Welfare Board note, cities like Ahmedabad demonstrate how innovative planning tools like TDR are crucial to achieving compact urban growth, especially in a country where urban land is scarce and crowded. India has less than one acre of land per citizen compared to 2.5 acres in China, compounding the land crunch in rapidly expanding cities with populations over 10 lakh.

Future Potential and Innovative Measures

Though Ahmedabad has made significant progress, experts say the city has only tapped a fraction of the total potential of TDR. The total capacity to absorb TDR in Ahmedabad is estimated at Rs 17,045 crore covering 25 square kilometres, while projects currently underway account for just Rs 2,236 crore or 13% of this potential. There is vast scope for unlocking the remaining 87% through innovative approaches like ‘Green TDR’, which could incentivise environmentally sensitive development, and inter-city TDR trading with nearby cities such as Vadodara, Surat, and Rajkot. Such mechanisms could unlock private investments estimated at Rs 2.46 lakh crore across 6,644 hectares of underutilised land. This could catalyse substantial private sector participation in housing, infrastructure, and heritage conservation. As CEPT University’s leadership highlights, dynamic and efficient urban development through tools like TDR will be vital for India’s goal of becoming a $10 trillion economy.

Reference:

Patel, Dr. Sejal N. (2025, April). HLC-Gujarat Report. Urban Development Department, Government of Gujarat. https://udd.gujarat.gov.in/pdf/HLC%20GUJARAT%20REPORT%2009062025.pdf

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