"There's a price on everything in New York, and the air is no exception." - Ross F. Moskowitz, Strock & Strock & Lavan
All of us are familiar with the practice of buying and selling property in the form of land, residential and commercial space, but the buying and selling of the air surrounding these spaces is a concept well-understood by few. With the recovery of the condominium market in New York City, residential development is at an all-time high, and this means taller and even more luxurious towers are fighting each other tooth and nail for the best possible views of the city. Because of this, the price of air above and around these potential developments is becoming more and more expensive, since a room with a view is worth a whole lot more than one without. Is it possible that these empty, vertical pockets are now worth more than the ground below them?
Read more about New York City's air rights to find out.
So what exactly are air rights? They can be defined as a building's "unused or excess development rights" measured by square foot and can be transferred from one building to another if zoning in that specific area permits. Air rights in NYC typically sell for 50-60% of what the ground below them is worth; some, however, can be worth much more than that, as in the case of air rights along the High Line.
Air was not inalienable to New Yorkers until 1916, when zoning rules and height restrictions were created to try to ensure the development of a healthier city in terms of air and light. Air rights did not become a salable commodity, however, until the 1960's when density quotas were established for every city block. These restrictions came in the form of a ratio between floor area and lot size (F.A.R.), determining a building's allowable bulk. This ratio depends on the building's zone and position on a block or boulevard, where side streets normally carry more restrictions than corner and boulevard lots, especially in height.
Trump World Tower at 845 United Nations Plaza is a great example of a building that legally accumulated air rights from at least 7 low-rise properties that had F.A.R. to spare, maxing out the block’s allowable density with a single, looming tower. Thanks to acquiring air rights from two adjacent properties, Kenneth S. Horn’s 18-story Isis Condominium at 303 East 77th Street cantilevers 8 feet above both neighbors starting at the 6th floor, the result of which are “360-degree views, more spacious apartments, abundant light and higher resale value.” A third New York City developer spent more than 15 years and umpteen millions buying unused air rights from smaller properties around his tower just to have enhanced Central Park views.
The multi-million dollar annexation of air space above and around these low-rise properties is causing a major vertical transformation of New York City’s skyline. According to air-rights expert Robert Von Ancken, it is the major reason why these “monster buildings” are cropping up all over the city, drastically changing its horizon. He adds that air-rights trading is on the rise because, quite frankly, it can make the difference between a “marginal and a profitable project.”
So will the future landscape of New York City be filled with a collection of 200-story residential towers with stilted buildings in between? How do those who gave up their air rights feel about these high-rise developments? How will they affect our experience of the surrounding streets and plazas we know and enjoy today? The answers to these questions may not be clear, but one thing can be said for sure: skyscraper-free areas will become rare in the city if the so-called “Great Air Race” continues, and it won’t be too long before New York City has an entirely new personality.
Reference: The New York Times
