In real estate, air rights refer to an interest in the space above a property. Owning air rights gives you the right to develop (or not develop) the space as you see fit. Also referred to as "transferable development" rights, air rights essentially give developers the option to expand their buildings or keep other builders from impacting the value of their investment.
When you buy a home, you own the airspace above the surface that could reasonably be used in connection with that land. What constitutes "reasonable use" will vary depending on the local zoning laws, but the government generally considers anything above 500 feet a "public highway." Additionally, local zoning regulations may impact how far into the air you can build.
Air rights typically cost between $100 and $300 per square foot. But, in Manhattan, where purchasing air rights is common due to the scarcity of land, the costs are a bit higher and typically range from about $200 to $400 per square foot.
Similar to any property rights, the cost of purchasing air rights depends on how valuable they are to a potential buyer. Air rights above prime real estate can be as expensive as buying any home or commercial building. However, air rights may not be as valuable in areas where development is more spread out.
- Research the Local Zoning Restrictions
- Buy the Property
- Purchase the Unused Development Rights
- Do a Zoning Lot Merger
- Consider a Special District or Landmark Transfer
1. Research the Local Zoning Restrictions
Buildings must be developed in accordance with the local zoning laws. For example, in NYC, the zoning code will provide the floor-to-area ratio, restricting the number of square feet you can build on a given property. So, determining the FAR and the allowable square footage of the building will let you know what air rights are granted by purchasing the property.
2. Buy the Property
The easiest way to secure air rights is to purchase undeveloped land or knock down an existing structure. Say you bought a 10,000-square-foot plot of land with a FAR of 5.0. That would mean you have 50,000 square feet of air rights to build on that property.
3. Purchase the Unused Development Rights
It gets more complicated if you do not own the property but still want to purchase the unused air rights to a nearby building, either to build horizontally or protect your view of the skyline. You can do so by securing transferable development rights, which can be obtained in several ways.
4. Do a Zoning Lot Merger
A Zoning lot merger usually means the owner of the adjacent building will sell you their air rights at an agreed-upon rate and then merge the two zoning lots. This allows the new owner to acquire unused air rights to enlarge the newly formed zoning lot or prevent further development. However, certain restrictions exist for a zoning lot merger, such as the properties must be neighboring for a minimum of 10 linear feet.
5. Consider a Special District or Landmark Transfer
If you want to do an air rights transfer for lots that aren't contiguous, you have a few options. Certain special zoning districts in Manhattan permit development rights transfers for non-contiguous lots, such as the Theater District in Midtown or the South Street subdistrict of Lower Manhattan. Buildings designated as historic landmarks also have more lenient requirements regarding development rights transfers.
Air rights are automatically granted when you purchase a property and are only limited by local zoning laws. However, in certain areas where land is precious, they are a hot commodity and may be worth a considerable sum to local developers. So, if you have unused air rights in one of these hot markets, you should do some research to find out if they're worth selling.
Do You Own the Airspace Above Your Property?
Yes, when you purchase a property, you are granted enough airspace to reasonably enjoy the land below the air. However, above that, the air space may be controlled by federal agencies like the FAA, plus zoning laws may limit how far you can build above the property.
Are Air Rights Transferred Separately from Land?
Certain air rights are granted when you purchase land based on local zoning laws. However, there are ways to transfer the air rights to another buyer, such as through a zoning lot merger.
How Do I Find My Air Rights in NYC?
The Department of Buildings website has resources available for information on your property and the zoning district. To calculate your Air Rights, just deduct the amount of floor area from your existing building from the allowable FAR in your district. You can also find out if your air rights have been sold through the Department of Finance's online database ACRIS.