Real estate developers hoping to expand their construction space in New York City may buy rights to build in a vertical direction. These development rights include the empty air space above an existing building.
Cornell University explains how air rights consist of the unused space between a building’s physical height and the maximum height the law allows for construction. Some developers, for example, may not have erected a building as high as the law permits. With the unused vertical air space, builders may acquire its unused development rights.
Developers and property owners require board approval
The NYC Department of City Planning notes that officials may zone existing property for transferable development rights. If it generates revenue and adds public benefits, the board may approve a proposal. Before considering TDRs, developers may first create a proposal for the planning board. It could illustrate how new floor space could benefit NYC residents.
Property owners may not sell TDRs to a developer without obtaining prior approval from the city’s zoning board. As noted on NY.gov, a property owner must first remove the development potential from the parent parcel. An owner may then sell or transfer the development rights to the developer of a receiving parcel. The original property owner, however, still owns the title and rights to the parent parcel.
A building may offer potential development rights
Millionacres reports that construction opportunities exist in old buildings with unused air rights that developers could demolish. After a demolition, developers could rebuild a taller structure up to the maximum height zoning laws permit for the parcel.
New York City’s building codes and zoning laws may offer developers opportunities for expansion through unused air rights. With careful planning, the involved parties may engage in transactions that unlock increased floor space in the NYC real estate market.