Enter Seattle and King County. During our time in Missoula, Kate and I drove to Seattle for long weekends to get our "city fix" a couple of times. One of the most striking things about driving into Seattle as compared to almost any other city of its size in the US is the overall lack of sprawling suburbs. Driving over Snoqualmie Pass, it's as if you are in the country, then all of a sudden in the city. Why? Seattle has a growth boundary. But what do you tell somebody who has property outside of the boundary? Tough luck?
No. You let them transfer their right to develop to somebody inside the growth boundary, so they can build more, denser, higher, or what have you. The last time Kate and I were in Seattle, we noticed the ongoing construction of the Olive 8, now completed. What I didn't know at the time was that the 8 was built larger than would normally be allowed in exchange for providing for the preservation of land outside of the growth boundary.
Enter this excellent piece by Bill Fulton, explaining how the TDR program works in King County: