Unlocking Air Rights: How to Maximise Property Potential in New York

Air rights, also known as development rights, give property owners the legal ability to develop the space above their land. In cities like New York, where land is limited, the ability to build vertically becomes valuable. Property ownership is often described as a “bundle of rights,” and one of these is the right to develop the land. These development rights can be transferred from one property to another.

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The “bundle of rights” includes:

- Surface rights: The right to use the land’s surface.

- Subsurface rights: The right to use what is beneath the surface (e.g., oil, minerals).

- Riparian rights: Water usage rights.

- Development rights (air rights): The right to build on the property according to local zoning laws.

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Although “air rights” aren’t specifically named in New York City’s zoning laws, “development rights” are typically what people refer to when discussing air rights.

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Limitations on Air Rights

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While air rights provide development opportunities, they are restricted by zoning regulations, historic preservation laws, and other legal constraints.

- Zoning regulations: Local rules control how properties can be used and developed, including limits on building height, density, and design. For instance, if a building has a 10-floor limit, air rights can’t be used to add an 11th floor.

- Historic preservation: In historically significant areas, there are often restrictions to protect the character of neighbourhoods, which may limit the use of air rights.

- Landmark designation: Buildings designated as landmarks or located in historic districts may face additional restrictions to preserve their historical value.

- Environmental considerations: Waterfront development or ecosystems may also have rules limiting how air rights can be used to protect natural resources.

- Community concerns: Local opposition to large development projects can influence how air rights are used, particularly when residents are concerned about traffic or changes to the neighbourhood’s character.

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Zoning Regulations and Transfer of Air Rights

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New York City’s Zoning Resolution sets rules for land use, including how air rights can be transferred. The key components include:

- **Land use controls**: What kind of developments are allowed in each zone.

- Building heights and densities: Limits on how big buildings can be.

- Setback requirements: How far buildings need to be from property lines or streets.

- Parking and loading: Rules for parking and loading spaces.

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The Zoning Resolution also allows landowners to transfer unused air rights, enabling taller buildings where otherwise restricted.

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How Are Air Rights Calculated?

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Air rights are often based on the size of the property and the Floor Area Ratio (FAR). The FAR determines how much floor space can be built in relation to the lot size.

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For example:

- If a lot is 100 feet by 100 feet (10,000 square feet) and the zoning allows a FAR of 4.0, the maximum buildable area is 40,000 square feet.

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Using Air Rights

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Air rights can be utilised by expanding existing buildings, constructing new ones, or selling unused air rights to neighbouring properties. This can be done through:

- Zoning lot mergers: Where owners combine their property with an adjacent one to allow for a taller building.

- Transferable development rights (TDRs): Transferring development rights between non-adjacent properties, often to preserve landmarks or for special districts.

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