USES OF AIR RIGHTS

TRANSFER

Transferring and selling your air rights is their most intuitive use. As described previously, if you haven’t built up to the maximum square footage zoned for your lot, the zoned-but-unused square footage can be transferred, for either a one-time sale price or ongoing lease payments.

In many cities—such as New York City—air rights can move when transferred. Often this is a sale where the air rights are transferred for use on another lot, so the recipient can build taller than previously allowed there. These transfers can support preservation of the sending site, and the construction of the Steinway Tower is a prominent example.

In other cities—such as Boston—air rights cannot move when transferred. Instead, through a lease or sale, the recipient would build directly above the sender’s property. This form of air rights transfer also appears in New York City. The most common cases are public infrastructure, such as the towers built over covered rail yards at Hudson Yards in Manhattan or the Prudential Center in Boston.

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PASS THROUGH

Pass through is a less obvious, but essential use of air rights.

In some cities where air rights can be transferred and moved—like New York City—the neighbors in between the sender and recipient must allow the air rights to pass through their lots. This is the case for New York City’s as-of-right transfers, which are done by connecting neighboring zoning lots, pooling the air rights, then writing a zoning lot development agreement (ZLDA) to re-allocate the air rights as desired. This allows the sender and recipient to transfer their air rights across the chain, while preserving the air rights of the neighbors in between.

Pass-through neighbors are paid for enabling others’ air rights transfers, even without transferring any of their own air rights. Historically, this has been a negotiated payment from the air rights recipient to those neighbors, encouraging buyers to minimize the number of neighbors necessary to connect a chain.

AREA’s model for paying pass-through neighbors differs. We allow any neighbor to participate in air rights transfers on their block, receiving a pre-agreed portion of the value created by transfers on their block. Rather than minimizing neighbor involvement, this open-door policy reinvests in the neighbors who are closest to air right transfers in their communities. Coordinating pass through also allows air rights to be transferred in smaller amounts, so they can be used for modest infill that preserves community character.