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 air space above buildings.
In major urban hubs like New York City and London, developers are interested in air rights as they offer buildable space in otherwise crowded neighborhoods. And building skyward has obvious benefits—higher floors offer more light and better views to potential buyers. Conversely, historical landmarks, lower commercial buildings and older condominium buildings have incentive to sell their air rights, effectively making money on their unused height potential.
In New York City—believed by many to be the pioneering city at the forefront of air rights deals—air rights have been available for purchase since 1961 when the city updated its zoning laws. Today, major deals are being brokered to acquire untapped square footage throughout the city. A landmark post office on Eighth Avenue, for instance, 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.
But for other cities around the world, the purchase and sale of air rights is only just becoming popular, as buyers look to the sky for untapped building potential.
Seeing as one U.K.-based development firm estimated that there is “£54 billion worth of roof space in London,” the city is working to acquire and utilize much of that unused square footage. The problem? It’s a relatively new market and city residents likely don’t know what sort of aerial space they have available to sell. But in an environment where land is scarce and residents don’t traditionally flock to mega skyscrapers, adding a few additional floors atop existing buildings is a lucrative proposition for developers.
In Seattle, air rights are often called something else: view rights. Suburban Seattleites 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 major premium, one that developers are willing to pay for. For homeowners, losing their view can impact not only resale value, but overall happiness with the property. One couple even went so far as to purchase the home next door just so they could acquire its air rights (from the roof up to 34 feet). When they later sold the home, their air rights purchase ensured that the new neighbors could never build up, leaving the couple’s view unobstructed.
With over a million daily commuters funneling in and out of Boston’s rail and bus stations, the city is looking to utilize the air rights over some of its busiest transit hubs to create room for the growing number of commuters. 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. At Back Bay Station, the third-busiest station in the city, developers are planning to add 1.26 million square feet which will be used as office, retail and restaurant space, residential units and added space to the station.
28 February 2017 by Daniel Rosen