The town and commune of Schio, population 40,000, is located in the Veneto region of northern Italy about 60 miles west of Venice. Like several other Italian cities, Schio 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).
Schio uses the Italian equivalent of a US specific plan to identify some portions of the planning area for public services (sending areas) and some portions for additional growth (receiving areas) but applying a uniform building density or building index to land in both areas in order to equalize property value. However, the sending area development potential can only be used by transferring it to receiving areas. If developers of receiving sites are unable to acquire the desired development rights from privately-held sending sites, they can pay to the municipality an amount equal to the value of those development rights which the municipality then uses these cash-in-lieu funds to acquire the public infrastructure (Leoni, G. (2008).
In the example of the Cappuccini planning area, Schio uses this TDR mechanism to create a green public space in a sending area in return for addition development in a receiving area without having to resort to condemnation (Leoni, 2008).
Leoni, G. (2008) Italy: experiments with non-financial compensation instruments to preserve, conserve and re-allocate buildings, in Janssen-Janssen, L., Spaans, M., & Van der Veen, M. (ed.) New Instruments in Spatial Planning: An International Perspective on Non-Financial Compensation. Amsterdam: IOS Press.
Micelli, E., and Faggiani, (2001) A. New Tools for Land Policy in Italy. Paper presented at the 8th European Real Estate Society Conference. Alicante 26-29 June 2001.