This paper incorporates a TDR policy into an open community and an open city, respectively. A TDR policy is defined as: set the total permissible development rights (DRs) in terms of floor areas, and then distribute the DRs among landowners in an equitable manner. It is shown that for either an open community or an open city in the absence of externality, the implementation of the TDR policy can achieve a more equitable distribution of development gains among landowners only at the expence of economic efficiency. Furthermore, for an open community or an open city with crowding externality, the implementation of the TDR policy improves both efficiency and equity.