Definition of "Air rights"

Brian Wilson real estate agent
Brian Wilson, Real Estate Agent RE/MAX Capital Realty

Air rights, in general, cover the right to occupy or use empty space. But what are air rights, and why are they important? Two major types of air rights can be explained; however, we’ll detail air rights that directly impact the real estate market.

Air rights can be owned, or public and the difference changes the whole definition of the term. It’s important to know that when it comes to navigable airspace over the United States, we refer to air rights as publicly owned that are under the control of the Federal Aviation Administration. These air rights are managed by air travel to organize air transportation through navigable airspace. There are limitations imposed regarding the height at which navigable airspace starts regarding the structures’ height from ground level. Still, as technological advances continue to be made and aircrafts might not have a minimum flight altitude, all airspace becomes navigable.

We’ll now further explain what are air rights in real estate, and you’ll see how the two concepts are different. There are few instances in the real estate industry when we’ll come across public air rights, as already discussed.

So what are Air Rights in Real Estate?

When we talk about air rights in real estate, we are talking about a type of development right. The following circumstances give property owners rights to manage and occupy a particular amount of unused air space atop their property: if it doesn’t trespass on another property and if the state and local law permits allow the improvement.

As the owner of a parcel of land owns the air rights above their land, so does a property owner. Through air rights, airspace becomes property of the land or property it is on top of and retains development rights. In high-density urban areas, buildings retain air rights for the equivalent of thirty-five stories above them. 

Taking these facts into account, we will further mention that development rights can be sold or transferred. Now imagine a two-story building located in the downtown of a large metropolitan area. The owner of that building can sell at any time. Still, if the buildings around it are high-rise apartments or skyscrapers and the owner is aware of their air rights, they can sell the two-story building for the potential development rights of up to thirty-five stories in height. As Christ Church exemplified in New York, this could generate an incredible profit when selling their vertical development rights for the astronomical sum of $30 million. 

Knowing the rights that any real estate owner has can make a big difference, especially if zoning ordinances permit these types of structures. Real estate agents can provide the information necessary for real estate investors to increase the sale price based on the market demands.

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