Can’t use all your construction rights? You can sell them under new Delhi master plan

In Delhi, the DDA aims to use this market-based mechanism that is designed to incentivise private property owners and to encourage them to participate in heritage preservation and slum rehabilitation efforts.

How is TDR expected to work in Delhi?

Under the public-private partnership (PPP) model for slum rehabilitation, developers build homes for slum residents on a part of slum land, and the remaining portion can be developed commercially and sold.

The idea is that the developer will recover the cost of building homes for slum residents through the profits from this commercial, or “free sale”, component. Since many slums are located on high-value land in parts of central Delhi, the model is expected to work.

However, a developer may not be able to use all the development rights available to build flats, shops, or offices for profit because of the size or location of the land parcel in question, or due to height restrictions.

Under the new TDR mechanism, these unused development rights can be used on another plot, or sold to another developer. The site from which TDR originates will be termed the ‘Generating Site’, while the site where it is utilised will be called the ‘Receiving Site’.

The potential for unused rights is very significant because the new MPD provides a Floor Area Ratio (FAR) of 500 for slum rehabilitation, which allows for the building of highrises.

FAR determines how much total floor space can be built on a plot. Consider a land parcel of 2,000 sq m. If the builder builds his building covering just 50% of the land and has a FAR of 500, then he will be able to build 10 floors, each with an area of 1,000 sq m. With the same FAR, if the builder uses just 25% of the land for building, he will be able to build 20 floors of 500 sq m each.

The additional building rights (TDR) are likely to be used in Transit-Oriented Development (TOD) zones, which already have a FAR of 500.

In which cases will TDR be available?

TDR will be awarded in three specific cases:

# Conservation or preservation of heritage buildings

# Regeneration of buildings in the Walled City (Old Delhi)

# In-situ slum rehabilitation schemes.

# TDR will be awarded in the form of a TDR Certificate issued by the DDA against the payment of requisite charges. The certificate will provide development rights only within the National Capital Territory of Delhi, and will be transferable among properties.

However, these rights can be used only in designated ‘Receiving Areas’ which will be identified by the DDA from time to time. These are expected to include areas notified for transit-oriented development, including areas on both sides of Metro corridors.

This geographical limitation is expected to ensure that development remains controlled and aligned with the city’s planning objectives.

A dedicated portal to trade TDRs

DDA willcreatea dedicated single-window portal to facilitate the trading of TDRs. This portal, a key feature of the new mechanism, is expected to streamline the process of buying, selling, and utilising development rights across the city.

A joint government-industry task force set up by the previous Lieutenant Governor V K Saxena in 2024 too had recommended a provision in the new slum policy along these lines.

“Private developers are incentivised to participate in slum redevelopment by granting them additional Floor Space Index (FSI). This additional FSI can be used for commercial purposes or sold in the open market, making the projects financially viable for developers,” the task force had said.