The City of Casalecchio di Reno, population 35,000, is located in the Province of Bologna adjacent to the City of Bologna in northern Italy.  Like at least nine other Italian cities, Casalecchio di Reno uses a form of TDR as a way of equitably distributing development potential and thereby mitigating some of the land value inequities created by tradition zoning. As a second but important benefit, these programs allow governments to acquire land for public infrastructure at little or no cost (Micelli and Faggiani, 2001).

Casalecchio di Reno launched its TDR program in 1989 (Bianchi, 2004) making it Italy’s first example of a regulatory equalization plan involving this form of TDR (Bartolini, 2011). Casalecchio di Reno uses TDR in all areas planned for conversion throughout the entire city. This comprehensive approach is also used in Turin, Reggio, Emilia, Piacenza, Cesena and Parma. In the alternative approach (used in Ravenna, Padua and Venice), TDR is only used for selected parts of the conversion area (Micelli, 2002).

As in many Italian cities, Casalecchio di Reno applies a uniform level of development potential to all the land within a comparable classification of land designated for conversion. However, within each classification, the owners of land planned for public infrastructure (sending sites) cannot use that development potential on site but can sell it to the owners of land identified for private development (receiving sites). The owners of the receiving sites can build at or below the baseline density or can exceed baseline by acquiring TDRs from the owners of the sending sites. This approach is intended to equalize the monetary effects of zoning and maintain higher property value for the sending sites than would occur if the city gave little or no development potential to these sites and then acquired them through condemnation at a reduced price. After the sending site owners have sold their TDRs, they give the property to the jurisdiction or sell it to the jurisdiction at an agricultural land value, thus delivering the programs’ other major benefit of allowing the jurisdiction to cheaply acquire land for public facilities.

As with other Italian TDR programs, Casalecchio di Reno first determined the appropriate number of land classifications to use. Some cities decide that all of their conversion land is essentially homogenous and they create just one large category. Other cities find the conversion land to be sufficiently different to warrant as many six classifications. The creation of these land classes requires what appears to be a balancing of economic, legal and other criteria that identify categories of land that ought to have comparable value based on concepts of fairness and perhaps common sense. Casalecchio di Reno developed two classes: marginal areas inside the city and peri-urban areas (Micelli, 2002).

All land within each of Casalecchio di Renos’ two classes has the following baseline development potential regardless of whether or not it is planned for public facilities and therefore a sending site.

• Marginal areas inside the city: 0.23 square meters of development per one square meter of land area
• Peri-urban areas: 0.115 square meters of development per one square meter of land area

Casalecchio di Reno also uses design objectives to divide each class into geographic areas with as few property owners as possible. Transfers are limited to the sending and receiving site owners within these geographic areas. Although the transfers are private sector transactions, the city facilitates and provides information.

As one outcome example, Bianchi (2004) reports that the tool successfully helped redevelop the San Biagio neighborhood including creation/renovation of 231 units of affordable housing at no cost to the city.

Bartolini, A. Equalization in Urban Development Annual Report 2011 Italy. IOS Publicum Network Review. www.ius-publicum.com.

Bianchi, V. (2004) Urban Equalization: the redevelopment program – Urban S. Biagio and the Urbanization of the Fox. Retrieved 1-2-14 from www.planning.net/download/casalecchio_c_1-pdf.

Micelli, E., and Faggiani, (2001) A. New Tools for Land Policy in Italy. Paper presented at the 8^th European Real Estate Society Conference. Alicante 26-29 June 2001.

Micelli, E. (2002) Development rights markets to manage urban plans in Italy. Urban Studies. Vol. 39. No. 1.