| What it is |
Air rights are unused development potential above an existing building, which is controlled by the property owner. |
TDR allows owners to move unused development capacity to different sites. |
| How it works in NYC |
In NYC, Air Rights are incredibly important to developers as they allow them to expand their buildings and build what they wouldn’t have been able to before purchasing air rights. |
In NYC, TDR transfer work is done in two different ways. First, through a zoning lot merger, where separate lots group together so that the unused FAR can be combined into a single zoning lot. The second way is through the Landmarks Preservation Commission (LPC) TDR program. Many buildings in NYC are designated as landmark properties and are not allowed to make any significant changes to them or to build upward on them. To capitalize on the extra allowed unused development rights, landmark buildings are allowed to sell the unused development rights to nearby buildings. |
| When it applies to an owner |
Air rights can be the most valuable asset for some property owners who are not interested in developing their properties anymore. They are allowed to sell the air rights to developers who do. |
For owners, the ability to sell development rights can be a great opportunity if they never planned to develop their buildings or thought they were unable to because they own a landmark property. The typical buyer for development rights could be Condo or Rental developers. |
| How it affects property value or owner decisions |
There are a few scenarios in which owners can sell their air rights, first they can sell to properties that touch their property for 10 feet. Now under City of Yes, owners of landmark properties can sell air rights to any lot located on the same block, any lot located directly across the street from that block, or any lot located at the next intersecting street or intersection. |
Transferable air rights give property owners the ability to capitalize on unused development potential by selling or transferring it to qualifying neighboring properties. This can enhance a property's value by turning otherwise unused zoning capacity into a marketable asset. |
| Common misconception |
Many owners assume that air rights are only important if they decide to build upon their properties more. But they can be a great way for property owners to turn their unused building capacity into money |
Many owners think that TDR can only be between adjacent properties, but this is not true under the Landmark LPC program. |
| Key question an owner should ask |
Have I had an independent appraisal of my air rights, separate from the offer a developer is presenting me? |
Am I in a special transfer district, and if so, where can my air rights legally travel? |
