Air Rights and How Development Rights Move Between Lots

Air rights and site assemblage, which Michael Stern lists among his five subjects in difficult city building, where geometry, code and the law layered on a site set the constraint, begin with a phrase that misdescribes the thing it names. Nobody in New York buys air. What changes hands is a quantity of floor area that one lot is allowed to build and has not built, and the whole practice turns on three questions: which lots can give that quantity away, which can take it, and what papers prove that it moved. ArchDaily’s explainer puts the common definition as the right to use or sell the space above a property, then notes at once that the definition shifts from one locality to the next, and that each country reads building and transfer rights in its own way.¹

The unit is floor area, not height

New York’s version is a creature of a formula. The Skyscraper Museum explains that every lot in the city carries a limit on its floor area, that the 1961 rewrite of the zoning law introduced the ratio that sets it, and that the same law let an owner buy floor area left unbuilt on adjacent lots.⁶ The ratio, described under floor area ratio, multiplies the lot area by a number fixed for the zoning district, and StreetEasy’s primer lists what moves that number: the district, how wide the fronting street is, the use of the building, and whether it offers a public benefit such as open space or affordable housing.² A six story building on a lot zoned for thirty two stories of bulk has, in StreetEasy’s words, unused potential, and that potential, measured in square feet, is the commodity.²

Height is a consequence, never the thing traded. 6sqft’s report on the Municipal Art Society’s 2017 study makes the point plainly: the city does not limit height, it regulates floor area, and it places no restriction on the shadow a tower may cast.⁴ A builder who collects floor area from neighbors can stack it on a small footprint, which is why the trade produces the tall thin forms the rest of this encyclopedia examines under slenderness.

Figure

One merger, parcel by parcel

1. 01
   Parcel ACarries an existing building of 65,000 square feet, so 35,000 of its permitted floor area sits unused.
2. 02
   Parcel BVacant, allowed 100,000 square feet on its own.
3. 03
   Merged lotTreated as one zoning lot, the pair may build a combined 200,000 square feet.
4. 04
   New buildingParcel B's owner buys the unused 35,000 and builds 135,000 square feet.
5. 05
   AfterwardParcel A stays capped at 65,000 square feet for as long as the merged lot exists.

Which lots can send and which can receive

Eligibility is geometric before it is legal. For the commonest route, the sending lot and the receiving lot must share a boundary, and the Warshaw Burstein client alert gives the rule in the Zoning Resolution’s own terms: lots that are contiguous for at least ten linear feet, inside a single block, may be treated as one zoning lot, whether they belong to one owner or to strangers.⁹ The alert adds the checks that come before any signature: a transfer across a zoning district boundary may be barred, and height limits or setbacks may stop the extra floor area from being used even when the arithmetic allows it.⁹

Two further classes of lot can send without touching their receiver. A building the Landmarks Preservation Commission has designated may pass its unused floor area over the street or along the block, and a lot inside a special purpose district may send to another lot in that district under rules written for the area.² 99% Invisible adds the vertical limit on the whole idea: past a given altitude the sky is treated as a public highway for aircraft, so the space that carries value is the band closer to the ground that a lot could have filled and has not.³ The receiving side has its own ceiling. The amNewYork account of the East Midtown plan records base ratios of 15 near the avenues and 12 at midblock sites, with increases allowed only in exchange for public realm work and the purchase of landmark floor area.⁵

Route one, the merged zoning lot

Most floor area moves by the simplest route, the merger, which the Municipal Art Society’s map describes as the primary way spare development rights travel: adjacent lots assembled and treated as one zoning lot, after which building proceeds as of right, with no hearing and no environmental review.⁷ The Furman Center’s research into the market, summarized in its Buying Sky brief, looked at prices, quantities, the location of sending and receiving parcels and the legal mechanisms used, and found wide variation in price per square foot even within the same neighborhood and program.⁸ The merger has its own entry at zoning lot mergers.

Figure

The merger against the landmark route

	Zoning lot route	Landmark route
Who must approve	Nobody at the city, the transfer is as of right	The city, through its review process
Where the rights may land	Only on an adjacent lot joined into the same zoning lot	Over the street or along the block from the landmark
Where it is common	Manhattan south of Central Park	Wherever the Landmarks Preservation Commission has designated a building
What it does for the sender	Turns an underbuilt lot's spare floor area into a sale	Lets a landmark raise money without selling its land

Route two, the landmark

The second route exists because preservation freezes a building below the bulk its lot would otherwise carry. StreetEasy describes landmark transfers as exchanges between a designated landmark and a receiving site that need not be contiguous, often over the street or along the block, with the stated principle that a landmark can sell floor area it cannot use rather than sell its land.² 99% Invisible frames the whole device as a preservation measure, a way of easing the pressure on an owner to build upward, and notes the Broadway theaters that have sold more than 600,000 square feet under a theater law of 1998.³ The certification steps are set out under landmark transfers.

Route three, the special district

The third route is written one district at a time. Special purpose district transfers, in StreetEasy’s account, let granting and receiving sites that do not touch exchange floor area where the city has a particular planning goal for the area, with the Special West Chelsea District beside the High Line and the Special Hudson Yards District as the examples.² In East Midtown the city went further and let every landmark in a 73 block area send anywhere inside it, with an assessment on each sale proposed at 20 to 40 percent for a fund dedicated to public space and transit.⁵ The two West Side cases have their own entries, the High Line corridor and the Hudson Yards mechanism.

The records that prove a transfer

A transfer is not real until it is written down and filed. For a merger, the Warshaw Burstein alert lists the papers: a certification prepared by a title company naming every party in interest, which includes mortgage holders, easement holders and ground lessees as well as owners; a declaration of zoning lot restrictions signed by the fee owners and describing the merged lot by metes and bounds; and a waiver from every other party in interest, which in practice also subordinates that party’s position to the declaration.⁹ The format of those documents, the alert notes, follows a Department of Buildings memorandum of May 1978.⁹

Figure

The papers of a merger, in the order they are made

1. 01
   CertificationA title company names every party in interest in the tax lots: owners, mortgage holders, easement holders and ground lessees.
2. 02
   DeclarationThe fee owners sign a declaration of zoning lot restrictions carrying a metes and bounds description of the joined lots.
3. 03
   WaiversEvery other party in interest waives its right to sign, usually subordinating its position to the declaration at the same time.
4. 04
   AgreementA zoning lot development agreement, recorded with the rest, moves the floor area and governs the lots for as long as the merger lasts.
5. 05
   FilingAll of it is recorded, and the relationship it creates does not end at closing.

The floor area itself moves in a separate recorded instrument, the zoning lot development agreement, which the alert calls heavily negotiated because the relationship it creates lasts as long as the merged lot does, and which typically covers the floor area moved, any light and air clause, cooperation on building applications, violations, casualty, enlargement of the lot and construction protection.⁹ Where tax lots themselves are divided or combined, the Department of Finance requires approval from its Tax Map Office and from the Department of Buildings, charges a fee for each new lot number, takes about 30 business days for an initial review, and lets a tentative lot expire after one year.¹⁰ The paper trail, and why a survey alone does not prove it, is the subject of development rights and the public record.

How much is out there

The stock is large and unevenly placed. MAS put the unbuilt floor area citywide, in square feet, at 3.7 billion in its 2018 data, 1.8 billion of them in residential zones, and allowed that some of this stock is landlocked or unsuited to redevelopment.⁷ 6sqft reports MAS asking that the Department of City Planning notify elected officials and community boards whenever lots are merged, since the merger itself needs no hearing.⁴ ArchDaily reads the same system as a balance between private gain and public good, and treats the transfer as a way for a dense city to grow upward while sparing land.¹

Figure

The citywide stock, by the MAS count

unbuilt floor area counted citywide, measured in square feet

3.7 billion

Empire State Buildings, the built area that stock equals

1,300

of those square feet sitting in residential zones alone

1.8 billion

homes those residential rights could hold if built to the envelope

1 million

What a transfer leaves behind

The last fact is the one that lasts. Once floor area has gone, the sending lot is short of it for good: the Skyscraper Museum’s model of a Park Avenue tower shows the low buildings whose spare bulk was gathered into it, and concludes that those sites will remain low rise forever.⁶ 99% Invisible records the Brooklyn studio that asked whether outer borough neighborhoods might bank small amounts of floor area and sell it one neighborhood over, an idea presented at MoMA and never enacted.³ Between the lot that gives and the lot that takes sits the city’s record of both, and the whole of this cluster, from transferable development rights to party walls, describes what that record says.