DETERMINING AIR RIGHTS FOR YOUR DEVELOPMENT
As anyone in New York City real estate knows, space is the ultimate commodity. Not only can you buy and sell existing property, but you can buy and sell potential, even if the land in question is already developed and may even be historically preserved.
As you navigate the confusing waters of New York City zoning law, you’ll likely come across the concept of “transferable development rights” — commonly known as “air rights” — and it’s important to understand how they might impact the value of your property or the potential value of your development.
What Are Air Rights?
Technically “transferable development rights,” your air rights represent the unused potential of your property, given its zoning status.
In simple terms, each piece of land in New York City is allowed a building with a certain footprint and a certain height. This is described by what’s known as floor area ratio, or FAR. For example, if your property is zoned with a FAR of 10, that means you can have 10 times the occupiable square footage as the size of your developable lot.
Essentially, that means you can build a 10-story building. However, this is where accurate measurements can be essential. Because there are carve-outs for mechanical rooms, elevator shafts, cellar space, and stair bulkheads, and special allowances for certain kinds of apartments and community spaces, it may be you can add an 11th or 12th floor.
And everyone knows the higher the floor, the more you can get to rent it.
However, if you only have a five-story building on that lot, that means you aren’t using some of your allotted air rights and you have the ability to either develop further, to use those air rights up, or you can sell those air rights to an adjacent property.
As you can imagine, this can be quite lucrative. If your neighbor would like to build up, but is capped at 10 floors, and you have five floors worth of air rights to sell, your neighbor will likely pay dearly for those five floors worth of air rights.
In the case of some historically preserved buildings, these air rights can even be sold beyond contiguous properties.
NYC Air Rights Calculations
Considering the value of even a square foot of New York City real estate, it’s vital to have an accurate measurement of developed square footage. No one wants air rights to go to waste and the system is designed to help old historic buildings remain standing, rather than be knocked down to build taller structures.
That’s why you need to be deploying the most accurate possible measuring techniques as you determine your square footage to feed into the FAR calculations. And that means 3D laser scanning.
With 3D laser scanning, you can get a highly accurate representation of your property, which allows you to measure precisely which square footage counts toward the FAR and which doesn’t. Even better, you’ll be able to demonstrate that accuracy via a 3D model to any regulator or potential buyer.
With air rights going for as much as $350 to $400 a square foot, you clearly don’t want to miss any opportunity for sale. And if you’re a buyer, you definitely don’t want to pay for a single foot that doesn’t really exist.
What Do You Do With Air Rights?
Once you determine you have available air rights, you have three basic options:
1 – Document them for potential use at another time, augmenting the value of your property should you sell it in the future.
2 – Use them to add to your property, building within the allowable air rights until you reach your zoning area’s FAR.
3 – Sell them to the owner of an adjacent property, who can use them to build higher than they would otherwise be allowed.
Each of these options has the potential to positively impact the net value of your property. Make sure you accurately determine that net impact with 3D laser scanning.
Let us help determine your NYC air rights
Here at Archidata Services, we’ve been working in New York City for decades and have the expertise to help you accurately determine your air rights or evaluate the air rights you’re interested in purchasing.
We know the zoning laws, can speak FAR fluently, and have the professional aptitude and equipment to quickly help you determine what’s real and what’s fair.
Call us today to make sure you maximize your developable space and get every square foot of value out of your property.