Air Rights in New York City: Definition and History

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Table of Contents

Introduction
Concept and Definition of Air Rights
Air Rights in New York City
Development of Air Rights and their Regulation
Regulatory Authorities
Conclusion
Reference list
Footnotes

Introduction

The general property rights define the ways in which the owner of land or a building can utilize their properties. However, in New York City, there are also the air rights, which relate to the floor space of a building and present requirements regulating the number of floors one can build within a certain area or on a piece of land. The air rights emerged due to the citys lack of free land, and these constraints prompted the real estate developers to build taller buildings. The regulators needed to ensure that these buildings are constructed according to safety standards and that they do not affect the citys overall image negatively. This paper will examine the definition of air rights and analyze the specifics of air rights in New York City.

Concept and Definition of Air Rights

The term air rights, sometimes known as excess development rights, refers to floor area that has been granted by zoning but not built or used. Rosenberg & Estis P.C. (no date) offer the following examplea 10,000 square foot property might be developed with up to 50,000 square feet of floor space in a zoning district that allows for a Floor Area Ratio of 5.0.¹ The property has 10,000 square feet of air rights if it comprises a building with only 40,000 square feet of floor area. Hence, the government of New York City has set clear restrictions on the air rights and the amount of airspace that a construction company can occupy. Each building must be designed and constructed following these regulations.

Air Rights in New York City

The existence of property rights implies that there is a limit on the number of floors one can build. There are restrictions in place, and they vary based on the size and shape of the property, its location, and the zoning district in which it is located.² Buildings with a lot covering less than a set percentage of the zoning lot are designated towers in certain zoning districts and locales, and their height is unrestricted.³ By increasing the zoning lot and lowering the percentage of the buildings lot coverage, zoning lot mergers make it easier for towers to be built. Thus, the basis of the air rights in New York City is the zoning and the assignment of a specific high for buildings based on the area where the construction takes place.

Air rights is an evolving legal domain, and some alterations are already being made by the regulating agencies. In addition to permitting air rights to be transferred to sites around the Subdistrict, the recently established East Midtown Subdistrict dramatically boosted permitted FARs.⁴ Owners of landmarks in the area, who now have a bigger market for their air rights, as well as owners of properties containing older structures that exceeded the prior permissible FARs, will benefit from these changes. Increased FARs and other new laws will enable these properties to be redeveloped with new buildings while retaining the overbuilt floor area. Therefore, the field of air rights in New York City is evolving, and government agencies responsible for these regulations are altering some of the previous policies.

The amount of gap between a buildings physical height and the maximum height permitted by law is known as air rights. Floor Area Ratio (FAR) units are used to express it technically. Moreover, each zone in a city has a maximum FAR; for example, if a construction company has a 10,000-square-foot parcel of land in a zone with a FAR of 2, they can only build a structure with 20,000 square feet of floor space.⁵ Therefore, FAR 2 allows the construction company to build two floors, each equal to the amount of land. Building owners with air rights can sell the vacant space above their buildings to developers, who can then add additional floor space to the existing floor space on their property. Developers can use this method to construct extremely tall structures that would otherwise be impossible to construct due to height and FAR limits. Hence, air rights can be sold or transferred to other companies or individuals.

Development of Air Rights and their Regulation

The development of air rights and their implementation into policies has a complex history. As was mentioned, air rights emerged due to New York Citys land constraints. Despite having a limited amount of areas where one can construct a building, the city has been continuously growing in the number of inhabitants. According to the American Planning Association (no date, para. 7), in principle, air rights go back to early English common law, with its basis in the Latin legal maxim: cujus est solum ejus est usque ad coelum et ad inferos to whomever the soil belongs, he also owns to the sky and to the depths. Hence, the air rights support the idea that the owner of the land also can decide on the airspace above it.

The owner of the property can sell their air rights following a set of regulatory requirements. The primary document that supports the transfer of air rights is the Purchase and Sale Agreement.⁶ In the same way that a PSA for the sale of land establishes the price, the payment process, including down payment, escrow, interest, and other financial operations, the closing conditions, default rights, notice provisions, representations, and warranties, transfer tax obligations, broker provisions.⁷ To buy or sell air rights, one must first make a declaration, which then becomes the zoning lot. The declaration, on the other hand, has no bearing on the allocation or use of development rights or floor area on the zoning lot. If the zoning lot is constructed, but no agreement is reached on how to allocate the floor area on the zoning lot, either party can potentially apply for a construction permit from the New York City Department of Buildings for a structure that includes all unbuilt floor area.⁸

There is no clear case law on if the purchaser of air rights, in the absence of a documented zoning lot development agreement or other instrument specifying that only the developer or purchaser has ownership of the air rights, has ownership of the air rights. In the absence of a recorded zoning lot development agreement or other document stating that only the company has a right to the purchased floor area, the purchaser of air rights is not entitled to compensation, where the seller uses the excess floor area, even if the developer paid for such floor area.⁹ The zoning lot development agreement, also known as a zoning lot development and easement agreement, assigns the floor space, outlines the rights and duties of the lot owners, and limits development on the zoning lot to some extent named ZILDA.

The definitions of exactly what floor area is being transferred to or acquired by a developer and what floor area is being kept by an owner are the most significant definitions in a ZLDA. The floor area transferred to the developer is divided into two categories: excess floor area, which is calculated by multiplying the lot area of the seller or lot owner by the maximum as of right floor area ratio.¹⁰then subtracting the existing floor area, also known as excess development rights, subject floor area, or subject floor area development rights, and all other floor areas that can accrue to a zoning lot, such as from zoning bonuses or from zoning exemptions.

Regulatory Authorities

In New York City, the regulatory authority that is in charge of the air rights is managed by the Department of Buildings.¹¹ This organization is concerned with the planning and working of the approval applications that are needed for the company or individual that wants to obtain air rights. Next, the policies that are linked to air rights are the Declaration of Zoning Lot Restrictions Zoning Lot and Development Agreement (ZLDA). Hence, the obtainment of air rights is a complex process that requires one to obtain specific legal documentation and approval from authorities.

Conclusion

Overall, this paper addresses the topic of air rights in New York City, the definition of this concept, the history of its development, and ways a property owner can sell their air rights. Air rights regulate the amount of floor space that a developer can build. These policies emerged due to the limited amount of land available in New York City. As a result, companies have to refer to the zone in which they are building their project to determine the air rights available to them.

Reference list

American Planning Association (no date) Air rights. Web.

Gosin, S. (2021) How do air rights work in NYC real estate? Web.

Kramer, R. (no date) Buying and selling sir rights in New York City: part 1. Web.

Rosenberg & Estis P.C. (no date.) New York City air rights. Web.

Footnotes

1 Rosenberg & Estis P.C. (no date)
2 Kramer, R. (no date)
3 ibid
4 Gosin (2021)
5 ibid
6 American Planning Association (no date)
7 ibid
8 Kramer (no date)
9 American Planning Association (no date)
10 Kramer (no date)
11 American Planning Association (no date)

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