The city and commune of Rome is Italy’s most populous city, having a population of 2.7 million within an urbanized area of 4.2 million people. According to Falco (2012), TDR concepts appeared in the regional planning law of 1999 but their use was confined to urban development plans, meaning detailed plans for limited areas intended to implement the general plan. In contrast, the 2008 General Plan for Rome aimed to create public infrastructure, preserve natural areas, historic resources and farmland, and promote the evolution of a polycentric metropolis partly by reducing the as-of-right development potential provided in the 1965 Plan and using various TDR techniques as implementation tools.

The 2008 General Plan reduced development potential by about 13 million square meters on 70 percent of Rome’s total land area. Falco (2012) reports that these development restrictions did not require compensation considerations for over half of the 89,000 development-restricted hectares. However, the 2008 Plan called for the preservation of 35,000 hectares of agricultural land and the creation of parks and open space with the help of TDR, which was explicitly seen as a means of recapturing a portion of betterment value for the benefit of the city as a whole.

Parts of Rome’s TDR mechanism sound like those found in other Italian programs: to exceed baseline density in a suitable receiving area, (some of which had their as-of-right development potential cut in half by the 2008 Plan), developers buy bonus development potential from sending areas (at an allocation ratio that can be as low as 0.06 squares of floor area per one square meter of land area.) More unusual, Rome’s new system also subjects from 20 to 50 percent of bonus receiving area development to a surcharge amounting to roughly two-thirds of the value of the TDRs, a provision that is rare but has been used in some US programs such as the one in Los Angeles, California.  Additionally, in sending areas identified as Compensation Areas, the government may retain from 60 to 80 percent of the development rights and can use these rights to motivate the accomplishment of certain public purposes (such as public housing) within or outside the sending area. (This feature may be similar to one used in Burbank, California, in which the city retains a finite development opportunity reserve which the city grants to smaller development projects that meet the goals of Burbank’s Media District Specific Plan.)

In 2010, a regional court ruled that the governmental retention of development rights was not enabled by Italian planning law, that the building index of 0.06 was low and constituted an improper way to manipulate land values and that the surcharge was unlawful as applied. However, a higher court overturned the regional court and upheld all of these TDR provisions.

Falco, P. (2012) Dealing with Betterment Value: Different Trends between Italy and England. Dissertation prepared for Sapienza University of Rome.