Can Transferable Development Rights be Applied in the Chinese Context? — A Comparative Study between China and the United States

Abstract

Transferable development rights (TDR) is an innovative land management tool created under the U.S. zoning system and widely applied in the preservation of historical buildings, natural resources, and agriculture land. Chinese scholars, based on China's planning and land management practices, have introduced the TDR and conducted extensive research, advocating for the establishment of a domestic trading market for land development rights. However, there are significant misunderstandings that need clarification. Firstly, the Chinese legal system, based on Continental law, follows the principle of "property rights are statutory.". In China's property rights system, there is no explicit concept of "development rights". Instead, it is implicitly included within the "land use rights" specified in the Civil Code. Therefore, despite academic attempts to draw inspiration from the U.S. legal system and practices, Chinese official documents have never used the term "development rights". Secondly, China adopts the public land ownership system, where urban land belongs to the state, and rural land to collectives. Following a series of regulations, individuals or organizations are entitled to obtain land use rights. The central government strictly controls land development through national spatial planning and annual land use plans, from which quotas for developable purposes are generated. Under certain conditions, these quotas are allowed to be traded between governments. This differs fundamentally from the TDR system in the United States, where land development rights are traded among private landowners. Additionally, although China's regulatory detailed planning draws inspiration from the U.S. zoning system, it differs in nature. Unlike zoning, a legal ordinance which can be consistent and strict, the detailed planning in China serves as a tool for government control over land development, and is subject to continuous modifications influenced by government will and market conditions. As a result, the transfer of floor area ratio (FAR) between land users does not hold practical significance. This article highlights the distinctions by comparing and contrasting the land management systems of China and the United States, under which certain cases have been conducted and will be utilized to illustrate this topic. Despite the concept not seeming to apply in the Chinese context, China's innovative practices in protecting land resources still offer valuable insights for international communities.