City of Yes spurs Manhattan air rights gold rush

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Mayor Eric Adams’ City of Yes plan is transforming how landmarked properties in Manhattan generate revenue. Since its passage in December 2024, interest in air rights—or transferable development rights (TDRs)—has surged, with Bob Knakal, Chairman and CEO of BKREA, currently working on 17 active deals. The plan dramatically expands the geography for TDR transfers, removing key barriers that had previously stalled the market for decades. Now, brokers say, a dormant asset class is finally coming alive in one of the world’s most valuable real estate markets.

Key Takeaways

• Explosion of Deal Volume: Bob Knakal, who rarely handled air rights sales before, now has 17 deals in progress, illustrating the market’s dramatic shift.
  
• Major Zoning Flexibility: The City of Yes allows landmarked buildings to transfer air rights beyond adjacent lots—now including same blocks, across streets, and even nearby intersections.
  
• Manhattan Leads the Market: With over 1,220 landmarked buildings, Manhattan is ground zero for this new wave of air rights transactions, vastly outpacing Brooklyn (294) and other boroughs.
  
• No More Special Permits: Streamlining the process means no need for special permits or LPC-led reviews—cutting delays and boosting deal feasibility.
  
• New Buyer-Seller Dynamics: More eligible receiving sites means landmarked owners may have dozens of potential buyers, rather than just one or two.
  
• Catalyst for Citywide Housing Goals: By enabling taller buildings in strategic locations, these transfers also support NYC’s broader plan to add 500,000 housing units by 2032.
  
  

Frequently Asked Questions

Q: What are air rights or TDRs?‍

A: Transferable Development Rights allow owners of landmarked buildings (who can’t build higher) to sell unused floor area to nearby lots that can use the additional space.

‍Q: How did the City of Yes change things?‍

A: Previously, air rights could only transfer to directly adjacent lots. Now, they can move across the block, street, or to the nearest intersection—dramatically expanding buyer pools.

‍Q: Why is Manhattan seeing the biggest impact?‍

A: Manhattan has the highest number of landmarked buildings and the highest land values, making air rights more valuable and deals more attractive.

Q: Are these deals closing yet?‍

A: Many are in contract or negotiation. Developers often secure air rights during planning stages, so closings may lag but activity is clearly increasing.

‍Q: What do developers gain?‍

A: A path to build higher or larger projects—up to 20% more floor area in many cases—without rezoning, while supporting landmark preservation.

‍Q: Can this help preserve historic buildings?‍

A: Yes. Air rights sales provide capital for landmarked owners to fund repairs, upgrades, or maintenance—turning idle rights into real dollars.

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