How Air Rights Work

In the space above your property, you, as a landowner, have exclusive development rights. Building a 'hangover' on a neighbor's property that violates the vertical plane is an intrusion, and the property owner can rightfully remove the offending structure under common law. The government owns the airspace, and it has development rights that can be sold or transferred. Each building can have the right to thirty-five floors of airspace over its property in a densely populated downtown area.

Local building codes, ordinances, and zoning restrictions regularly restrict air rights. Even if you own the air rights to a particular piece of property, if your town only allows construction up to six stories, you won't be able to create an eight-story apartment building. A developer can buy a property that's not taking full advantage of its air rights with the intention to demolish it and erect a taller building or adding more floors on top.

You, as a developer, may buy the air rights to an existing structure to construct a tall building that expands into its airspace. Developers in New York City, for example, often purchase a buildable lot as well as the air rights of nearby, smaller buildings to construct a more significant and more desirable structure. People mainly sell air rights in densely populated areas where buildable land is scarce, and building codes permit tall structures. In reality, New York City was the birthplace of the idea of growth by air rights. In reality, the selling of air rights has resulted in the construction of many structures.

Example of Air Rights

For example, you reside in a state where you can buy a piece of land and build a structure as high as eight stories. In this case, you have air rights of up to eight levels high. This means that if you have built a bungalow and feel the need to convert your property into an eight-story building, you can legally do so. However, if you consider erecting a skyscraper on your land, you would be going beyond your air right limit, and that is a crime.

It is important to note that the air right you get varies depending on where you buy your land. Some states or countries allow you to have more air rights than others. Thus, if you plan to erect a tall building on your land, it is good to know what air rights you have.

If you have built a single-story restaurant on your land, you have not utilized your air rights to the total capacity. You can choose to sell the remaining of your air rights to any developer who needs the space. For example, the Prudential Building in Chicago, constructed above a working train station, was created on purchased air rights from the train station.