I agree with the general principle that game theory is a powerful tool for public policy, but the idea of these transferable development rights or "air rights" seems a bit absurd to me.

What the government is saying by allowing these rights to be sold, is that the place to which they are transferred to has arbitrarily restrictive zoning. In my mind, the value of transferrable development rights should be zero. Zoning should actually have some hard principle behind it that isn't bendable by allowing the non-development of some other desirable piece of land. Either a building is too tall for the neighborhood or it isn't. It should be "too tall unless you pay a farmer 10 miles away".

Why is uneven, concentrated development some kind of public good?

How does this position unroll? How does the farm eventually get developed in 50 years? Do they have to buy TDR from someone else? Does an "equivalent" TDR have to be demolished?

>Why is uneven, concentrated development some kind of public good?

Because of agglomeration and the incredible desirability of mixed-use walkable neighborhoods (see rents in walkable neighborhoods of NYC + SF + Boston for proof). This farmland is only desirable and sought out by developers because of zoning restrictions elsewhere.

>How does this position unroll? How does the farm eventually get developed in 50 years? Do they have to buy TDR from someone else? Does an "equivalent" TDR have to be demolished?

These are all great questions which reveal that TDRs are not a very forward-looking policy solution to the housing crisis. Maybe planners believe there will be more appetite for taller buildings in the future, or that land prices will rise enough that the owners' support for zoning reform will overcome opposition. It does seem absurd, and more like a way to bribe property owners so that local politicians can avoid making public decisions in meetings that 90% of NIMBY cranks disagree with.

If you can get a payout for "selling" something without having to actually sell any part of your property that you intend on using, and nothing will change in your neighborhood, why wouldn't you sell it? And if property owners and residents in a neighborhood are crying to anyone who will listen that the world will end if four-story buildings give way to six-story buildings, you now have a big incentive to show up to those same land use meetings and push back.