Air Rights in California

The term “air rights” refers to the legal rights associated with the use and control of the space above a piece of property. In California, these rights play a significant role in urban development, especially in densely populated areas. They are governed by statutes, common law, and local zoning ordinances. Property owners have a reasonable expectation to enjoy the airspace above their land. However, these rights are not absolute and may be subject to government regulations and restrictions.

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Local zoning ordinances in California may impose restrictions on height limits and land use to regulate air rights. In areas where land is scarce and urban populations are dense, air rights have gained significant importance. Property owners often seek to maximize the potential of their land by developing vertically rather than horizontally. Understanding air rights allows property owners to determine the height and density of their structures, which can greatly impact the value and profitability of their investments.

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When buying or selling property in California, it is essential to consider the air rights associated with the parcel. Buyers should conduct due diligence to understand the current zoning regulations, existing easements or restrictions on air rights, and any ongoing or future construction projects nearby that could affect the property’s air rights. Sellers should disclose any known limitations or encumbrances on the air rights to potential buyers.

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Changes in Ownership of Air Rights in California

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Air rights, as described by the State Board of Equalization of California, are the rights located directly above the land surface. In utilizing land, multiple parties can claim separate and distinct ownership or control of real property situated in different horizontal planes, yet resting on the same plot of land. This allows each owner to put their particular plane of ownership to separate and legally independent use.

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For a transfer to be eligible as a change in ownership, the Revenue and Taxation Code Section 60 mandates three requirements:

1. A present interest in real property.
2. The right to beneficial use of the property.
3. The value of the property transferred must be substantially equivalent to the fee interest.

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Air rights are recognized as real property by Property Tax Rule 124, which classifies them as land. Transfers of air rights satisfy the above three requirements. Since these rights are real property and part of the land, a transfer of a present fee interest in air rights, separate from the surface rights, is legally possible and, under Section 60, would constitute a change in ownership of “land.” Therefore, there should be a revaluation of that portion of the land that changes ownership.

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