The Air Rights Concept in New York


Recent developments in population growth, urbanization, and socio-economic development are changing land use planning, particularly in commercial areas. An increase in urban populations leads to higher demand for land for settlement public utilities such as roads and commercial infrastructure. New York is among the rapidly growing cities in population density and economic activities. However, the city has limited land to accommodate the rising demand leading to finding sustainable options for development. Air rights are among the solutions to effective development that profits existing businesses and creates new projects. This essay discusses the concept of air rights in New York and how it has evolved with changing rules and regulations regarding ownership and land rights.

Air rights

The concept refers to legally owning a vertical air space above a developed real estate area or property. The space comprises any vacant area with potential for development above a private or public property building. Air rights apply primarily in urban areas such as New York due to limited space for commercial development demanding the utilization of vacant space above other property. According to Allam (2019), New York’s demand for development space has increased the demand and value for air spaces since all land is packed with tall buildings. Sky-scrapers are an example of structures occupying air spaces. Purchasing or renting an air space can include or exclude the property on the ground level, depending on ownership and the value of the space.

Although the owner has the right to develop the property to fit their demands and preferences, they must comply with specific rules about developing air spaces. Firstly, the structure’s height must comply with a particular district’s building codes, zoning regulations, and ordinances. Secondly, new developments must adhere to existing boundaries and avoid encroachment into adjacent properties whether the air space is vacant. Nonetheless, a developer can use transferable development rights (TDRs) to purchase the vacant space. Lastly, air rights are not applicable in navigable air spaces under the Federal Aviation Administration (FAA). The restricted area includes vacant space ranging from 1000 feet above the highest obstructions in congested areas such as urban centers.

Development of Air Rights Concept

Air rights developed due to rapid population growth, demanding more space and public utilities. The increased urban population increased land values, high housing rates, and a higher demand for transportation facilities. Due to space, the factors significantly impacted central business districts (CBD). Central business districts are characterized by tall multi-story buildings that accommodate numerous businesses and facilitate various functions. Economic activities demanded a lot of external operations such as transport and communication. Thus, human and business demand for land resources led to land conflicts and competition for land over the years.

Although much demand for automobiles and telecommunication has changed in the transport and communication sector, the rapid population growth in urban centers remained a critical issue on land resources. Urban centers needed more streets, parking lots, and expressways to accommodate the masses. Additionally, high populations demand employment and more business areas for economic sustainability. Thus, the idea of creating more land through constructing air spaces emerged and began by constructing railroad airways. In 1908, New York started constructing the first air rights project, the New York Central Terminal. By 1962, New York had more than four air rights railroads, such as the Pennsylvania railroad station. Air rights development has been slow due to unclear public and private land regulations and owning air rights exclusive of ground surface rights. However, current rules and regulations developments influence real estate and housing programs to embrace air rights.

Fundamentals of Air Rights and Regulatory Authorities in New York City

In New York City, the NYC zoning resolution regulates all laws and protocols concerning air rights. Property owners merge zoning lots to utilize undeveloped potential according to two fundamental zoning resolutions (ZR) principles. The first principle under ZR §12-10 zoning lot allows merging between adjacent properties at a minimum range of 10 linear feet. Secondly, zoning resolution principles only cover the compliance of merging lots separate from taxation, development projects, and other property records. Thus, merged properties must comply with other regulations as a single unit according to the area of the merged lot.

The rights to develop in vertical air spaces depend on formulas and calculations stipulated by zoning resolutions. Determining the available air space for potential development involves basic calculations according to the building’s height and the maximum range recommended for construction. For instance, owning a property that can accommodate 200000 square feet means one has a vertical air right of 200000 square feet. If the property has a structure occupying 150000 square feet, then the unused air right or developmental right is the remaking of 50000 square feet. Thus, the owner has the freedom to develop the space, sell it or lease it out to another developer. Transferring air rights occurs through an ‘air rights deal’ or “developments rights transfer.’ The processes involve three primary approaches: zoning lot merger, special purpose district transfer, and landmark transfer.

Selling and Transferring Air Rights Rules and Regulations

Zoning Lot Merger

Zoning lot merging involves combining adjacent properties with unbalanced development but the same potential for development. The owner has a right to transfer the unutilized air space to the adjacent business so they can develop the unused potential and maximize the area’s potential economically. The approach is common in historically underdeveloped areas. Selling or leasing air rights to adjacent properties do not require the city’s approval since it is private property. However, the seller and buyer fill out forms confirming the lease or sale of zoning lots. The forms are documented in the department of Buildings (DOB) under the series of ‘zoning exhibits. Alternatively, a zoning lot merger can involve the combination of adjacent properties to create a shared zone where both property owners share the development rights. For instance, two owners may have adjacent properties with unused air space for potential development. Thus, the properties merge to create more space that can be leased or utilized as a single unit. Merging adjacent lots is the most common approach to transferring air rights. The approach occurs mainly in Manhattan and New York city-states due to urban congestion and limited land for more developmental projects.

Special Purpose District Transfer

Special purpose air transfers occur in particular areas within the city that are reserved for transferring special purposes. Special districts allow the exchange of air rights between properties that are not adjacent. Unlike zoning lot mergers, the district’s laws permit special transfers, which primarily occur to achieve a specific goal in the area, such as hospitals or commercial development. Some of the special purpose districts are the special Hudson yards district, the special East Harlem corridors district (EHC), and the special 125th street district (125) in Manhattan. Special districts benefit civilians more since the transfers create public utilities such as health facilities.

Landmark Transfers

Landmark transfer is the exchange of air rights in areas that have a cultural or historical significance, according to the Landmarks Preservation Commission (LPC). In this approach, developers can own air rights and make developments in the LPC-designated areas under the approval of the NYC coding zone. The transfer allows the exchange of property in areas not adjacent to each other. Landmark transfers occur in underdeveloped areas with more air spaces that have not been utilized due to LPC restrictions or have old underbuilt landmarks. The areas primarily have sparse buildings that attract more potential. Governments use landmark transfers to generate revenue from leasing and selling air rights to private developers.


The concept of air rights developed from the high demand for limited land due to population growth and urbanization. Since the late 19th century, the United States has considered the concept of reducing congestion and promote developmental projects in urban areas. Air rights ownership includes buying or merging airspaces that have developmental potential. Methods of ownership include zoning lot merger, special purpose district transfer, and landmark transfer, representing different ownership forms. New York City is the first urban center to embrace air rights by constructing railroad projects in vacant air spaces. The city has established various ordinances and principles under the zonal resolutions, which oversee the effective transfer of air rights and merging properties according to the particular districts. Utilizing air spaces by constructing buildings and transport facilities is an excellent approach to accommodating the growing population and demand for commercial establishments.

Reference List

Allam, Z. and Jones, D.S. (2019) ‘The potential of blockchain within air rights development as a prevention measure against urban sprawl’, Urban Science, 3(1), p.38.

Chamberlain, L., 2017. Zoning at 100. Planning, 83(1), pp. 44-48.

Kramer, R. (2018) Buying and selling air rights in New York City: Part 1.

NYC Planning (2022) ‘Special purpose districts: Manhattan’, Zoning: Districts Guide – Special Purpose Districts – Manhattan – DCP. Web.

Palbas, N. (2018) ‘Property law special edition: Air rights: The sky is no the limit, it’s the solution’, Law Institute Journal, 92(8), pp.38-41.

Sclar, E. (2019) The financialization of zoning and the fungibility of air rights. In Zoning (pp. 37-54). Routledge.

Sclar, E. (2021) ‘The infinite elasticity of Air: New York City’s financialization of transferable development rights’, American Journal of Economics and Sociology, 80(2), pp.353-380.

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LawBirdie. "The Air Rights Concept in New York." June 15, 2023.