Explaining the New York City Air Rights Real Estate

Have you ever wondered how New York City continues to build taller and taller skyscrapers? Air rights is a concept that holds the secret. In this blog post, we will explain what NYC air rights are, how they work, and how they contribute to the famous skyline of the city.

Air Rights in Real Estate

In real estate, air rights refer to a person’s legal rights to the space above a property. Basically, it’s an expansion of your property that lets you use not just the land itself, but also the space above it for development.

Air rights are very valuable in cities where there is not much land available because there are a lot of people living there. For instance, imagine a scenario where there is only one floor on a lot located in a bustling city like NYC. In this case, the owner may have the permission to construct multiple additional floors above it. These rights can then be sold to another person who can then build a skyscraper on the lot.

Alternatively, nearby properties have the option to buy air rights in order to expand their buildings upwards. Air rights can be purchased, sold, or leased, and they can greatly increase the value of a property.

History of Air Rights In New York City

Air rights have been around for a long time, but they have only recently been used in real estate development. The exact origins of air rights in New York City are not very clear, but there were several factors that led to their development in the early 20th century.

One important factor was that there was less and less land available in Manhattan. As the city got more crowded, there was no more space to expand outwards. What’s the solution? Build higher. But, this was difficult. If there were no regulations, buildings could become extremely tall, leading to a crowded and gloomy cityscape.

Another important factor was the introduction of new transportation methods. The railroads were equipped with electricity in the early 1900s, which made it possible to build platforms above the train tracks. The New York Central Terminal air rights development was an early example that showed how airspace could be used for more construction.

It became clear in the 1960’s that there was a need for a zoning law that covered all aspects. The 1961 Zoning Resolution aimed to control housing density and promote balanced urbanization by regulating floor area ratios. This code introduced a rule called FARs (Floor Area Ratios) that limited how much space a building could take up on a piece of land. However, the concept of FARs also allowed for the creation of platforms where development rights could be transferred, effectively establishing a market for air rights.

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How Are NYC Air Rights Determined?

In New York City, air rights are mostly determined by something called the Floor-Area Ratio (FAR). Here is an explanation of how it works:

• Zoning Resolution: In a city like New York, each zoning district has a set of rules called the Zoning Resolution that determines how development can take place. This resolution sets a limit on the maximum floor area ratio (FAR) for each zoning district, location, and type of building use.
• FAR as a Ratio: The FAR is a measure of how much floor space a building can have compared to the size of the lot it is on. For instance, a FAR of 5 means that a building can have a floor area that is five times bigger than the size of the lot.
• Unused Development Rights: If a property owner is not using the maximum allowed floor area ratio (FAR) and has empty air space, it means they have development rights that are not being used. These unused rights refer to the rights to use the airspace above a property, which can be sold or transferred.

How to Purchase Air Rights?

Purchasing air rights involves careful planning and often requires the help of professionals. Here is a simplified plan:

• Verification: Make sure you can prove that you own the air rights you are interested in. Make sure to consult property titles and get help from a real estate lawyer to make sure you understand everything clearly.
• Zoning and Feasibility: Look up the local zoning rules to find out how tall you can build on the property you’re interested in. The air rights offer will not allow for much additional development. Additionally, please think about whether it is technically possible to add more floors to the current structure.
• Valuation and Negotiation: Hire a real estate expert who specializes in air rights to evaluate their worth. This takes into account factors such as the demand in the market and the possibility of adding more floors. After you receive a valuation, you can discuss and agree on a reasonable price with the seller.
• Legal Aspects: It is important to have a lawyer involved in the process to help with contracts, airspace restrictions, and make sure everything goes smoothly.