| What it is |
A zoning lot merger is when two or more adjacent tax lots are combined into one single lot. This allows development rights to be shared among the properties. |
TDR allows owners to move unused development capacity to different sites. |
| How it works in NYC |
In NYC, a zoning lot merger combines two adjacent lots into a single zoning lot to determine development rights. The lots must share 10 feet of frontage to qualify for a zoning lot merger A zoning lot development agreement (ZLDA) is a key part of recording the merger as it outlines how the development rights will be shared. |
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 |
For owners, a zoning lot merger means that they’re able to make some money off of selling the unused FAR sitting above their property without giving up their property or any equity in the building. |
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 |
For the receiving parcel, a lot merger combines the development potential of multiple properties into a single zoning lot. By consolidating allowable floor area and density, developers gain the flexibility to construct larger and more efficient buildings, often resulting in greater revenue potential and a substantial increase in the property's value. |
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 a zoning lot merger gives up full access to the lot that their property is on, but this is not true, the owner would just be giving up further development rights. |
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 |
Are all lots contiguous, or if non-contiguous, do they meet the zoning rules for merger eligibility? |
Am I in a special transfer district, and if so, where can my air rights legally travel? |
