In crowded cities where real estate is at a premium, commercial developers and residential buyers alike are spending millions of dollars on intangible property—they’re purchasing air rights, the usable airspace above buildings.
In New York City, developers have long been interested in air rights as they offer buildable space in otherwise crowded neighborhoods. And building skyward has obvious benefits—higher floors mean more tenants, and more light and better views create a higher value for buyers. Conversely, historical landmarks, lower commercial buildings and older condominium buildings have incentive to sell their air rights, effectively making money on unused potential height.
In New York City—the city at the forefront of air rights deals—air rights have been available for purchase since 1961 when the city updated its zoning laws. Major deals are continually brokered in order to tap into unused square footage throughout the city. For example, the James A. Farley landmark post office on Eighth Avenue has 1.5 million feet of air rights up for grabs. Developers are attempting to turn the space into an updated train hall for Amtrak and Long Island Rail Road commuters.
For the rest of the world, buying and selling air rights has become popular only recently as buyers look for untapped building potential.
Developers in Seattle have recently begun looking to air rights – but refer to them differently than New Yorkers. In Seattle, air rights are often called ‘view rights’. Suburban and downtown developers alike are buying up surrounding air rights in order to protect precious mountain and water views.
For downtown residential buildings, these views come at a high cost, but one that developers are willing to pay for. For building and homeowners, losing a view can impact not only resale value, but overall happiness with the property. One couple purchased the home next door in order to acquire its air rights (from the roof up to 34 feet). While some may see this as drastic, when they later sold the second home their air rights purchase ensured that the new neighbors could never build up, leaving the couple’s view unobstructed.
Boston has over a million daily commuters funneling in and out of rail and bus stations. The increase of commuters is causing the city to find other ways to maximize space. Developers are looking to utilize the air rights over some of its busiest transit hubs to create room. The proposed plan for the space above South Station—one of the city’s busiest stations—will create three new towers and add 106,000 square feet to the bus terminal. Developers are planning to add 1.26 million square feet through airspace to Back Bay Station, the third-busiest station in the city. The additional floors will include office, retail and restaurant space, residential units as well as a larger station.
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